The Columbus Dispatch | Jack Torry
Questionable actions by pharmacy benefit managers in Ohio provided impetus for two key senators to ask the federal government to investigate pricing practices by the drug middlemen nationwide.
Senate Finance Committee Chairman Charles Grassley of Iowa and ranking committee Democrat Ron Wyden of Oregon cited a state audit of Ohio’s setup and a pair of Dispatch articles as a basis for why they want the U.S. Department of Health and Human Services inspector general to examine what is known as “spread pricing” — where pharmacy benefit managers buy prescription drugs from a pharmacy and charge a higher price to Medicaid, a joint state and federal program that pays health-care costs for the poor and disabled.
In a letter to HHS this week, Grassley and Wyden said the Ohio audit found “that the PBMs’ spread pricing practices resulted in the program being billed $224 million more than the total price paid to pharmacies for actual claims over the course of the year.
“On average, this spread — the difference between what the PBMs paid the Ohio pharmacy providers and what they billed the Medicaid managed care plans for — reflected more than 8% markup for prescription drugs paid for by Medicaid,” Grassley and Wyden wrote.
The study by state Auditor Dave Yost — now Ohio’s attorney general — confirmed an earlier consultant’s report to the state Medicaid department. The consultant noted the Ohio PBMs’ rate was three to six times the standard amount.
Yost has pledged to pursue PBMs that overcharged the state.
The billions made by PBMs has been the topic of a year-long investigation by The Dispatch, which has helped spur sweeping changes in Ohio.
The bipartisan senators cited a Dispatch story showing how CVS’ PBM paid some of its biggest retail competitors far less than it pays its own stores, according to a critical section of the state consultant’s report that CVS is fighting in court to keep secret.