Complete Story

Contact your legislators! The time for pharmacy payment reform is now!

We are pleased to report that the Ohio Senate heard your voices, and last week they added new funds into HB 166 that would help keep local pharmacies alive after years of underpayments from pharmacy benefit managers (PBMs) within the Ohio Medicaid managed care program.

Specifically, the Ohio Senate appropriated $100 million over the biennium to supplement pharmacy dispensing fees as a means to stop the bleeding of low Medicaid PBM reimbursements. This appropriation is a great first step of turning the Ohio pharmacy marketplace around, after the state saw more than 370 pharmacies close their doors since 2013.

While the appropriation is not enough to restore the value that PBMs took out of Ohio's pharmacies, we are concerned that as long as PBMs can continue to arbitrarily set prices in the system, the same conflicts of interest that have shifted margins and market share in the direction of PBM-owned pharmacies could also compromise the intended destination of the newly-proposed pharmacy funds.

We need your help to ensure the Senate's proposed pharmacy dispensing fee funds stay in the final version of the budget, and we need to ensure that these funds intended to cover pharmacy services do not get swooped up in the PBM drug pricing shell game.

Just this weekend, the Columbus Dispatch reported that as pharmacies are teetering on the edge of financial disaster, meanwhile CVS/Caremark has reacted to Ohio's recent ban on spread pricing by spiking margins on specialty drugs that they tend to steer to their own specialty pharmacies. We have seen enough. The state can no longer allow PBMs to set the prices and reimbursements for themselves and their competitors. The state's taxpayer-funded Medicaid program can no longer be an all-you-can-eat buffet for the PBM industry.

Please contact your legislator now, and tell them to:

  • Retain the Senate's proposed investment in HB 166 to maintain local pharmacy access.
  • Add language to HB 166 to strip PBMs of their price-setting capabilities in the Ohio Medicaid managed care program, and instead use un-conflicted, objective reference-based prices to determine the cost of prescription drugs.

It has now been over a year and a half since OPA really started making headway in exposing the hidden exploitation of pharmacies and taxpayers at the hands of pharmacy benefit managers (PBMs) within the Ohio Medicaid system, and now that the truth has been exposed and PBM reform is underway, we need your help to fix Ohio's broken pharmacy payment model.

We need you to call your state representative and state senator or use the web form on this page to tell your elected officials about the need to reset and repair the Medicaid pharmacy program through the state budget bill (HB 166) to return some of the value that was taken out of the system by PBMs and to fix a pharmacy marketplace that was exploited and compromised by industry middlemen.

This month, several OPA members came to the Statehouse to make their case for reform to the Ohio Senate Finance Committee. To listen to Sangita Patel and Lynne Fruth, click here. To listen to Antonio Ciaccia, Max Peoples, and Denise Conway, click here. To listen to Jeff Neidig, click here.

Budget deliberations will conclude this weekend, so this is our final push. We need you to contact your lawmakers now!

Pharmacies cannot continue filling prescriptions for Medicaid patients at rates that are as low as 20% of a pharmacy's average cost to dispense, and lawmakers need to take action now to ensure that more pharmacies don't have to shred their staffing levels and to ensure that more communities don't lose access to their only local health care providers.

Both the House and the Senate have passed their own versions of HB 166, and the bill now sits in Conference Committee, where key lawmakers from both parties will hash out differences and push a final version to Governor DeWine. Your calls and messages are necessary to ensure pharmacists' voices are heard in these final budget negotiations between the House and the Senate.

OPA believes that in order to fix Ohio's PBM problem and pharmacy access crisis, the state must strip PBMs of unchecked price-setting capabilities in the Medicaid program, in exchange for surveyed reference-based prices for the drug (through a benchmark like NADAC), and transparent, set increased dispensing fees that begin to cover a pharmacy's cost to dispense.

  • Rather than allowing middlemen to set drug prices at their own whims, by using reference-based pricing benchmarks like National Average Drug Acquisition Cost, NADAC, (which is conducted through CMS and surveys pharmacies monthly on their invoice acquisition costs for prescription drugs, making it an actual reflection of market-based rates), the state can insulate themselves from PBM overcharges like the ones that cost the state $244 million in just one year.
  • This will provide pricing accountability not just for PBMs, but for wholesalers as well. Inserting reference-based prices better equips pharmacies with the data they need to push back on out-of-line reimbursements and purchases, which creates the supply chain accountability that the current system is lacking. Under a NADAC-based system, if a pharmacy is being underpaid, now the pharmacy knows that the wholesaler price is out of whack and can pressure them accordingly.
  • The current model, which allows PBMs to overpay on some drugs and underpay on others, needs to change to even out the margins and insulate the market from revenue-shifting that seems to be driving margins to drugs predominantly dispensed by PBM-owned pharmacies. Additionally, this helps prevent medication access issues like the one that dried up generic Suboxone access in 2017.
  • While the $100 million will not cover the full cost to dispense, this is a necessary start to provide predictability and better sustainability than the current model, and more importantly, reestablishes a foundation to build new, innovative payment models into pharmacy in the future.
  • Now, rather than allowing the vendor who profits off the price to also set the price, the state now has a better grasp on what true drug costs should be. This would provide complete visibility into drug costs and reduce the chance of profiteering.
  • Furthermore, acknowledging the inherent conflict of interests that arise when PBMs get to set reimbursement rates for their own pharmacies as well as their competitors, moving to reference-based pricing removes the risk that PBMs could be leveraging their role to unfairly drive out competitors.

HB 166 makes some great attempts at reform, but we need to protect those reforms and ensure newly-proposed end up helping to sustain local pharmacy access rather than lining the pockets of middlemen. These proposals will address both sides of the Ohio's Medicaid pharmacy benefits problem: it will get PBM pricing practices under control, and it will fix Ohio's broken Medicaid pharmacy payment system.

Please contact your legislator now, and tell them to:

  • Retain the Senate's proposed investment in HB 166 to maintain local pharmacy access.
  • Add language to HB 166 to strip PBMs of their price-setting capabilities in the Ohio Medicaid managed care program, and instead use un-conflicted, objective reference-based prices to determine the cost of prescription drugs.

All Ohio pharmacists, students, and pharmacy team members should contact their state representative and state senator or use the web form on this page now to ask for their support to fix Ohio's broken pharmacy payment system, end state overspending on prescription drugs, and secure local pharmacy access in Ohio's communities.

We are close to fixing this mess, but we need your help. Budget deliberations end this weekend, so the time to act is now!

Contact your legislators! The time for Medicaid pharmacy payment reform is now!

If you need more background, talking points, or information on Ohio's road to PBM reform, click here, review the state auditor's report, or check out the Columbus Dispatch Side Effects series.

Printer-Friendly Version