Ohio Ends Pharmacy Middlemen Contracts Over ‘Spread Pricing’

Posted on:

< < Back to

COLUMBUS, Ohio (AP) – Ohio’s Department of Medicaid is ending the state’s contracts with pharmacy benefit managers which bill taxpayers more than they reimburse pharmacists for filling Medicaid patients’ prescriptions.

The Columbus Dispatch reports the department on Tuesday directed Ohio’s managed care plans to terminate contracts with pharmacy benefit managers, or PBMs, based on the “spread pricing” practice. The state says it’s moving to a more transparent pass-through pricing model Jan. 1.

Under that model, PBMs would receive administrative fees and must bill the state the same amount they pay pharmacists.

A state-commissioned report showed PBMs billed taxpayers $223.7 million more for prescription drugs in a year than they reimbursed pharmacies to fill those prescriptions.

CVS Caremark, the PBM for four of Medicaid’s five managed-care plans, is working to update its contracts moving forward.