“The report did not include any data showing overall savings to the state as a result of eliminating spread pricing as a contracting option for the program.”
The following article was originally published in the Ohio Capital Journal and published on News5Cleveland.com under a content-sharing agreement.
The companies serve as health insurers’ middlemen in pharmacy transactions. They created lists of drugs that are covered and they negotiate huge rebates and discounts from drugmakers for putting their products on them. As critics have accused PBMs of taking excessive profits and raising drug costs, the state and federal government have taken steps to regulate them. And PCMA, the industry group, has worked to stop those controls.
In 2019, the legislature and the incoming DeWine administration were eager to get a handle on the dealings between the big PBMs and the Ohio Department of Medicaid. A year earlier, the department commissioned a study after The Columbus Dispatch obtained a partial set of confidential data and determined that CVS Caremark and OptumRx were charging taxpayers a lot more for drugs than they were paying the pharmacies that dispensed them.
At the same time, independent and small-chain pharmacists were complaining that low reimbursements by the PBMs were making it hard for them to stay in business. Indeed, CVS has bought many of them out, closed many of its own stores and shifted their prescriptions to still-open stores, where employees have said understaffing has endangered patient safety.
The analysis found that pharmacists were getting $38 million more in reimbursements in the second quarter when compared to the first, but it made no calculations about whether the overall system was costing taxpayers more. Considering that the PBMs took a quarter-billion dollars over a year-long period that the new law was supposed to eliminate, additional overall costs seem unlikely.
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