MEDICAID

“In July of 2016, we find out we don’t know (how much the PBMs are paying pharmacies) and we’re not going to start getting this information until July of 2018?” he asked Medicaid director Barbara Sears. “This is shocking.” Sears said that beginning in July, the five managedcare companies that Ohio contracts with to coordinate health services for 89 percent of Medicaid patients will be required to report to the state exactly how much the PBMs they hire are paying pharmacies.

Under their current contracts with the state, the managed-care companies report only how much they pay PBMs. Information on what PBMs pay pharmacies has to come from individual pharmacies.

CVS Caremark is the PBM for four of Ohio’s five managed-care plans. The company has denied accusations that it is paying pharmacies especially low prices that is driving out its retail competition. During the past two years, 165 pharmacies have closed in Ohio.

Sears said she shares lawmakers’ concerns about the practice, known as “spread pricing,” but needs more information to understand the scope of the problem.

“I think it is appropriate, as we look at how we are strategically going to deal with this, that we clearly identify the problem before we find a solution — and I can’t identify a problem before I have data,” Sears said.

“I need to make sure the PBMs are working in the best interest of the member, of the plans and therefore the state.”

Sears also told lawmakers that two managed-care companies have taken steps to address pricespreading. CareSource is rebidding its contract for pharmacy benefit manager to make sure it’s getting the best value. The Buckeye Health Plan also is exploring its PBM program. Both now employ CVS Caremark.

Coley said Medicaid’s “timeline is not prudent for the scale of what we’re trying to find out ... we need to aggressively try and get this data sooner.”

Coley said he heard of one instance in which a pharmacy paid more than $300 for a particular drug, was reimbursed $200 by the PBM for filling the prescription, and “we paid the PBM $700 ... they didn’t provide that much benefit.”

Coley said he’s skeptical the PBMs will cooperate. “They have all this data right there and they are not sharing it.”

Earlier this week, lawmakers announced they would introduce legislation to give state Auditor Dave Yost access to now-confidential information that he would need to audit PBM contracts with Medicaid managedcare companies. Sears and CVS have said they would cooperate with lawmakers.

Ohio spends $3.2 billion a year for Medicaid prescriptions, which is up nearly 20 percent over the past two years.

Pharmacists say PBMs are using multiple cost lists to pay pharmacies a low price and charge insurers that contract with the state a high one.