Ohio prescription drug middlemen made more money from generic medications, report says

Cleveland.com | Jackie Borchardt

COLUMBUS, Ohio — Ohio’s prescription drug middlemen kept 31 percent of the money they were paid to manage generic medications for Medicaid patients, reducing the amount pharmacies were paid to dispense the drugs, according to a new state auditor’s analysis of drug transactions.

But the analysis left many more questions unanswered about whether Ohio is getting the most for its money.

The “price spread” on generics collected by pharmacy benefit managers, or PBMs, totaled $208 million from April 2017 through March 2018, according to a report of the analysis issued Thursday morning. The average spread across all drugs was 8.9 percent, which was about the same as an analysis commissioned by the Ohio Department of Medicaid earlier this year. The agency-initiated report found PBMs saved taxpayers at least $145 million annually by negotiating drug prices.

Legislators asked Auditor Dave Yost to examine transparency among PBMs serving Ohio’s Medicaid program, spread pricing and whether CVS Caremark was giving better prices to CVS pharmacies earlier this year.

Yost told lawmakers Thursday the PBM issue highlights what can happen when government privatizes public services. He said jumping to a “pass through pricing model,” as the Medicaid Department proposed this week, might not lead to lower costs or greater transparency.

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