Rein in Medicaid Rx managers
9/2/2018
Pharmacy benefits managers were taking advantage of pharmacies across the state, but particularly in northwest Ohio.
The evolving scandal of Ohio’s overpaid pharmacy benefits managers (PBMs) has revealed that the Ohio counties most victimized were in northwest Ohio — Van Wert, Fulton, Henry, Seneca, and Hancock.
These were the counties where the spread — the difference between what pharmacists were paid for Medicaid drugs they dispensed and what the PBMs claimed for themselves — was the greatest, according to an audit by state Auditor David Yost.
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As an example, the average price spread in Fulton County was $8.12 per prescription, while the average statewide was about $5.71.
In Lucas County, the average spread was $6.67 — $1.13 for brand names, $7.48 for generics, and $32.79 for specialty drugs.
Auditors found that the price spread was $6.14 for generic drugs which comprised more than 86 percent of all prescriptions.
Mr. Yost audited the pharmacy benefits manager program at the request of the Ohio General Assembly. At the same time, the state of Ohio has finally announced it will overhaul how the state pays for Medicaid prescription drugs.
These high spreads, to the detriment of pharmacists, coincided with a high level of independent pharmacies in northwest Ohio going out of business.
Pharmacy benefits managers perform a middleman function in Ohio designed to control health care costs in Medicaid spending. They’re supposed to control costs, but it seems they have controlled costs excessively at the expense of pharmacies and for the benefit of their own bottom lines. A factor allowing them to profit off the spread was a lack of transparency available to state overseers.
One of the PBMs, CVS Caremark, responded that the pharmacy benefit managers saved Ohio taxpayers $145 million a year, even as drug prices were rising, and that Ohio’s rates for prescriptions are 13 percent lower, on average, than other states.
PBMs need to be managed so they save the state money without gouging the pharmacists and without excessively rewarding themselves. The way to do this is for the state to oversee the PBMs’ records with more transparency, rather than taking their word for it.