Ohio Auditor Dave Yost

Ohio AG recommends pharmacy benefit overhaul

Ohio Attorney General Dave Yost said Monday that he wants the state to make major changes to how its pharmacy benefits are managed.

Yost has been a frequent critic of several large companies that manage prescription drug benefits for state agencies, and this morning’s announcement comes while Yost’s office has a pending lawsuit against one of the companies, OptumRx.

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Pharmacy benefit managers are private companies that typically contract with insurance companies and they say they negotiate discounts on drugs to keep prescriptions accessible to consumers and save their members money.

Pharmaceutical Care Management Association, a trade group representing pharmacy benefit managers, said the companies “serve as the only check against drug makers’ sole power to set and raise prices.”

The association said “we applaud the Ohio Attorney General for examining prescription drug prices” and it is reviewing Yost’s proposal.

The companies were once an obscure part of the pharmacy supply chain but are now facing backlash as they are accused of keeping too much of the money they manage and not passing along savings from drug rebates.

“When state agencies entered into these nebulous deals with PBMs, they unknowingly hired a fox to guard the henhouse,” Yost said in a statement. “But he was a smart fox. He didn’t kill the chickens; he helped himself to the eggs.”

Yost said he recommends the legislature approve several recommendations to make changes to the way pharmacy benefit managers work with the state.

MORE: Local pharmacy benefit manager growing with Kettering Health contract

He outlined a four-step plan which includes:

  • State drug purchases should go through a master pharmacy benefit manager contract that is administered through a single point of contact.
  • The Ohio Auditor of State should have unrestricted authority to review all pharmacy benefit manager drug contracts, purchases and payments.
  • Pharmacy benefit manager must be fiduciaries.
  • Nondisclosure agreements on drug pricing with the state must be prohibited.

Yost filed a lawsuit March 15 against OptumRx in which he accused the company of overcharging the Ohio Bureau of Workers’ Compensation $15.8 million. He alleged that the overcharges occurred because OptumRx “failed to provide contractually agreed discounts on drugs.”

OptumRx said the allegations were without merit.

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