COLUMBUS (AP) — Ohio’s Department of Medicaid is ending the state’s contracts with pharmacy benefit managers which bill taxpayers more than they reimburse pharmacists for filling Medicaid patients’ prescriptions.
The Columbus Dispatch reports the department on Tuesday directed Ohio’s managed care plans to terminate contracts with pharmacy benefit managers, or PBMs, based on the “spread pricing” practice. The state says it’s moving to a more transparent pass-through pricing model Jan. 1.
“The Ohio Department of Medicaid has taken a very positive step to increase the transparency of these contracts today. “We need to hold people’s feet to the fire when they try to rip off taxpayers, and under the current contracts, Ohioans have no way of knowing if we are getting a good deal or not. This is the right move to bring more transparency to the system.” -statement from Ohio Attorney General Mike DeWine
Under that model, PBMs would receive administrative fees and must bill the state the same amount they pay pharmacists.
A state-commissioned report showed PBMs billed taxpayers $223.7 million more for prescription drugs in a year than they reimbursed pharmacies to fill those prescriptions.
CVS Caremark, the PBM for four of Medicaid’s five managed-care plans, is working to update its contracts moving forward.