Attorney General Dave Yost seeks reforms to rein in PBM abuses

The Columbus Dispatch | Darrel Rowland, Marty Schladen

Ohio Attorney General Dave Yost picked up the spray bottle and squirted the dirty “window” in his office. Then he grabbed a towel and scrubbed away at the grime for several seconds to reveal several human faces.

The news conference visual aid likely won’t make the highlight reel for any Ted Talks.

But this was Dave Talk for saying that Ohio needs more transparency and better oversight of the drug middlemen that each year spend billions of taxpayer dollars on prescriptions for the poorest Ohioans.

“I still, after all the work we did, cannot tell you what the profit is. So how can we possibly know whether we got a good deal?” Yost said during the half-hour gathering about the middlemen, known as pharmacy benefit managers (PBMs).

“Customers feel the effect of PBMs because PBMs essentially are controlling prices and essentially control what drugs are covered.”

The PBMs negotiate rebates from drug manufacturers and decide how much to pay pharmacies on behalf of managed-care plans that work with the state. As a third party that contracts with a private company, the PBMs’ contracts are hidden not only from the public but often kept secret from the state officials responsible for programs such as Medicaid, the federal-state health-care program for the poor and disabled.

Investigations showed that the PBMs serving Ohio Medicaid — CVS Caremark and OptumRx — in 2017 charged $224 million more for drugs than they reimbursed pharmacies. The total was generated by a rate three to six times the industry norm, a state consultant said.

“PBMs have taken advantage of the lack of transparency and lack of centralization to the detriment of Ohio taxpayers,” Yost said. “This must stop. Centralization will allow for the comprehensive review of prices across the entire drug-purchase portfolio to eliminate this problem.”

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