Published by Inside Health Policy
Ohio Attorney General Dave Yost (R) on Monday (April 22) called for the Ohio legislature to enact four policies targeting spread pricing practices by pharmacy benefit managers that would route all state drug purchases through a single PBM contract, give the state auditor unrestricted authority to review all PBM drug contracts, make PBMs fiduciaries and ban nondisclosure agreements regarding drug pricing with the state. A day before, Ohio pharmacist researchers published research that suggests spread pricing practices in that state might have benefited both PBMs and specialty pharmacies.
Ohio is at the forefront of the fight over spread pricing on generic drugs in Medicaid. Ohio’s investigation of PBM spread pricing practices inspired a federal investigation, and several states have followed Ohio’s lead.
Yost’s proposal to make PBMs fiduciaries is similar to the Trump administration’s suggestion last year that Congress make PBMs legally responsible for putting the interests of their clients over their own interests. That fiduciary responsibility would forbid PBMs from accepting payments from drug makers.
“PBMs have taken advantage of the lack of transparency and lack of centralization to the detriment of Ohio taxpayers,” Yost said in a statement. “This must stop. Centralization will allow for the comprehensive review of prices across the entire drug purchase portfolio to eliminate this problem.”
In March, Yost sued OptumRx over its contract with the state Bureau of Workers’ Compensation. His administration accuses the PBM of overcharging the state nearly $16 million. Yost said Monday that his office is investigating seven other PBM contracts with the Department of Medicaid, the Department of Administrative Services, the Ohio Public Employees Retirement System, the Ohio State Highway Patrol, the School Employees Retirement System of Ohio, the State Teachers Retirement System of Ohio and the Ohio Police and Fire Pension Fund.
State investigations of spread pricing inspired Senate Finance Chair Chuck Grassley (R-IA) and ranking Democrat Ron Wyden (OR) to ask an HHS watchdog to investigate the practice on a national level. The senators specifically mentioned audits conducted in Ohio, Pennsylvania and Kentucky.