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Ohio lawmakers going after pharmacy benefit managers

(January 24, 2018) — When Ohioans go to pharmacists for their prescriptions, they generally assume they’ll be told the truth about the costs of their medicines. Some lawmakers, however, say that little-known organizations are keeping pharmacists from being honest with their clients.

Reps. Scott Lipps, R-Franklin, and Thomas West, D-Canton, say pharmacy benefit management companies (PBMs) are issuing “gag orders” to keep pharmacists quiet about what could be cheaper medicines for their clients, and keeping the extra money for themselves — something the lawmakers hope to ban with new legislation, House Bill 479.

According to the lawmakers, as well as Antonio Ciaccia, the director of government and public affairs for the Ohio Pharmacists Association, PBMs sometimes charge consumers for an entire copay despite a cheaper cash option being available, and keep the cash for themselves. Some PBMS, like OptumRX, have said that money goes back into the customer’s health plan.

“When I first started hearing about these clawbacks, I was shocked,” Ciacca said.

PBMs operate as a middleman between insurance and drug companies, negotiating the price of drugs and communicating that price to pharmacists. “Clawbacks” occur when PBMs require customers to pay a full copay even when the cost of a drug is below that amount, according to the lawmakers. Those PBMs then require pharmacies to return the difference to them.

Holly Pendell, the director of advocacy and activist engagement for the National Multiple Sclerosis (MS) society, spoke in support of the bill. Pendell said MS patients sometimes stop treatment because they cannot afford it, and that clawbacks only increase drug costs.

“While people living with MS typically do not pay the full amount, there are many cases of people who stop treatment because of high out of pocket costs and even more cases of non-adherence,” Pendell said.

The legislation would prohibit PBMs from directing pharmacies to require a higher payment than the cash value of the medicine. It would also prohibit PBMs from issuing gag orders to pharmacists.

Some PBMs have already stopped clawbacks altogether, such as Express Scripts, the largest PBM in the United States.

“Some pharmacy plans require their patients to pay a full copayment for a prescription drug even though a retail pharmacy’s price for the drug may be less costly than their copayment under their pharmacy benefit,” a statement on the company’s website reads. “And then they require the pharmacy to return the difference between the copay amount and the price for the drug back to them. We do not engage in or support this anti-patient practice.”

West said clawbacks are common in Ohio and price differences vary greatly, from a few cents to over $20.

“A recent analysis by a midsize pharmacy chain in Ohio found hundreds of clawbacks in the last three months,” West said.

Curbing drug prices has been a hot topic in Ohio recently. In November, voters rejected state Issue 2, a measure that would’ve required the state of Ohio to pay the same amount as the Department of Veterans Affairs for drugs.

While proponents said the lowered drug prices would benefit all Ohioans, opponents argued it would drive up prices for Ohioans who were not enrolled in government insurance programs.

“Issue 2 may have failed … but proponents, opponents and everyone in-between agree something needs to be done about Ohio’s drug pricing,” Lipps said.

Ciaccia said Issue 2 was unworkable, but the newly introduced legislation was a “key component” in helping Ohio’s drug cost situations.

In August of 2017, CVS and OptumRx as well as Express Scripts were sued for similar price gouging, Bloomberg reported. A spokesman for Express Scripts called the allegations “meritless” at the time.

The legislation would not impact federal programs such as Medicare Part D.