Ohio aims to protect clinics from PBM bite
Lawmakers in the House and Senate introduced bipartisan legislation Tuesday to protect healthcare providers serving low-income Ohioans from “predatory practices” of pharmacy middlemen.
The companion bills, House Bill 482 by Reps. Randi Clites, D-ravenna, and Susan Manchester, R-lakeview, and Senate Bill 263 by Sen. Bob Hackett, R-london, would prohibit pharmacy benefit managers and insurers from imposing additional charges or reducing reimbursements for prescription drugs to clinics and other safety-net providers.
“We cannot let PBMS or insurance companies divert money meant to help underserved patients access health services,” Clites said. “Many 340B providers use the program to fund services like dental, substance abuse treatment or extended weekend hours. It is unacceptable to target the programs that the poorest Ohioans rely on.”
Under the 340B Drug Pricing Program, created by Congress in 1992, drugmakers participating in Medicaid and Medicare must sell certain outpatient drugs at a discount to federally funded health clinics, hospitals and others serving uninsured or underinsured patients. In exchange, the qualifying health-care providers must use the savings on patient care.
But in Ohio and elsewhere, the lawmakers say, PBMS are targeting 340B providers with “discriminatory contracts that absorb all or part of the 340B savings by reducing reimbursements or adding fees,” essentially diverting the savings to their own pockets.
“Our legislation protects providers like community health centers who rely on their 340B savings to provide access to affordable and comprehensive care,” Manchester said.
The savings for clinics can be significant. Rocking Horse Community Health Center has four clinics in Clark and Madison counties with a $12 million annual budget, with $1 million coming from 340B savings.
Hackett said that in one instance, a pharmacy in the 340B program was reimbursed $4 for a medication, compared to $100 for the same prescription filled outside the program.
“When you lose revenues, of course, you lose services,” Hackett said. The clinics have increased patient visits by more than 100% in the past three years, added a dental clinic and expanded substance-abuse treatment, he noted, all in large part with 340B savings.
Julie Derossi King, chief operating officer for the Ohio Association of Community Health Centers, said health clinics often feel they have little choice but to sign discriminatory contracts with PBMS because they are small with limited bargaining power and the areas they serve offer few options.
“Health centers are often forced into a take-it-or-leave it situation to accept these predatory contracts, reducing their ability to retain savings on these drugs,” Derossi said. “With these predatory practices and without the savings, health centers have no other option than to reconsider the programming services that 340B savings support today, or if they don’t sign the contracts, their patients lose access.”
Legislators and state officials for years have sought to place stricter controls on the little-known middlemen in the drug supply chain. PBMS are hired by insurers to negotiate discounts and rebates with drugmakers and to contract with pharmacies and reimburse them for filling patients’ prescriptions.
Much of the scrutiny followed a 2018 study that found that the two PBMS in the Ohio Medicaid program billed the state three to six times the standard rate, taking in $244 million more in a year than they paid pharmacies and pocketing the difference.
Logan Yoho, pharmacy director of Hopewell Health Centers, which has 25 clinics in southeast Ohio, said “many are in areas where they are the only health care option for miles.”
“If this trend continues, it could force clinics to close their doors and leave some communities without a single health care option to consider,” he said. “The intent (of the 340B program) was to extend patient care to the most vulnerable among us, not to increase the profits of large corporations.”