SIDE EFFECTS

An ongoing investigation on the rising costs of prescription drugs

The Dispatch has spent the past 8 months uncovering how PBMs operate in Ohio. Here's what you need to know from our investigation.

  1. Pharmacy benefit managers (PBMs) - little-known middlemen in the supply chain that gets prescription drugs from manufacturers to consumers - receive hundreds of millions from Ohio taxpayers via the state’s Medicaid program.

  2. A state-sponsored study conducted after several weeks of Dispatch stories found the PBMs are charging Ohioans 3 to 6 times the normal rate - costing taxpayers an extra $150 million to $186 million a year.

  3. The PBMs use “spread pricing,” meaning they get about $225 million more a year from the state than they reimburse pharmacies for drugs used by Ohio’s poor and disabled.

  4. At the same time the payments to pharmacies were being cut by the PBMs, the parent company of one of them, CVS, sent out letters to pharmacy owners sympathizing with their financial woes and offering to buy them out. This occurred in several states.

  5. PBMs cut the reimbursement rate so much for Suboxone that many pharmacies were forced to stop stocking the drug used by numerous Ohio addicts in recovery.

  6. The Medicaid official who was in charge of dealing with pharmacists who complained about low reimbursements from CVS’s PBM was at the same time, she was a part-time pharmacist with CVS Pharmacy. While still on the job at Medicaid, she negotiated a new job with CVS Caremark, the company whose reimbursements Ohio pharmacists were complaining about.

  7. Ohio Medicaid officials don’t want to follow the example of West Virginia, which eliminated PBMs and saved $38 million, saying it would actually cost the Buckeye State more. Medicaid also is not following the example of the Ohio Bureau of Workers’ Compensation revamp of its prescription drug setup, with one BWC official saying “we were being hosed” under the previous deal.

  8. The city of Columbus wound up doling out $8,000 a prescription for a pain cream that drug salespeople marketed as “free” to individual members of safety forces.

  9. People diagnosed with cancer sometimes must wait weeks to get medication because PBMs required it to be provided by their company’s own mail-order facility, instead of having the patient get it down the hall in the same facility where they were diagnosed.

  10. Rebates drive up the cost of prescription drugs, although their exact impact is cloaked.

  11. A state proposal to provide HIV drugs seems to have been written so that only CVS could get it

  12. The proposed merger between CVS and health-insurance giant Aetna would further consolidate the health-care market and, analysts say, drive up prices for consumers.

Read our previous coverage

latest story
TOP STORIES

Dispatch analysis shows "cost cutting" middlemen reap millions

Ohio experience raises questions about CVS-Aetna merger

Ohio firing pharmacy middlemen that cost taxpayers millions

Amid PBM inquiry, officials' ties to CVS questioned

Pharmacy middlemen come between cancer patients and their drugs

CVS accused of using Medicaid business to drive out retail competition

latest story
LATEST STORY

Ohio Medicaid orders drug price changes after abuse reported; CVS agrees

These revelations come after a year-long project by the Dispatch called Side Effects, which has focused on PBMs and their impact on drug prices. They have significant impact on the prices all of us pay for drugs.

Pharmacy benefit managers have surged in power in the marketplace over the past 15 years. They now earn $400 billion annually by being the middleman in the drug-supply chain.

They make significant money by negotiating one price with drug manufactures and then another price they pay to pharmacists to dispense those drugs. The difference in those numbers is called the spread.

The PBMs also charge pharmacists fees to process prescriptions, usually under 50 cents a prescription.

The Dispatch earlier this year analyzed data from 40 pharmacies across Ohio that found CVS Caremark charged Medicaid 12 percent more for drugs in 2017 than it paid pharmacies. An audit commissioned by Medicaid determined the spread to be 8 percent. It found PBMs took $224 million in spread to manage prescriptions for Medicaid in one year, three to six times the standard rate.

Medicaid plans to have a more transparent pass-through model in January 1. Betti said the pass-through model will allow Medicaid to review the reimbursements to pharmacists and question PBMs if auditors see swings in prices.

“This reinforces the importance of transparency and is why we took aggressive action to ensure full transparency by implementing a new drug pricing model to ensure that Medicaid enrollees have access to quality health care, including pharmacy benefits, at the best possible price for Ohio taxpayers,” Betti said.

Ohio Attorney General Mike DeWine has threatened a lawsuit to recoup taxpayer dollars from CVS Caremark but has yet to follow through on that threat.

Antonio Ciaccia, the lobbyist for the Ohio Pharmacists Association, said CVS Caremark’s actions are causing more pharmacies to close or forcing them to sell to bigger companies like CVS.

“Enough is enough,” he said. “Right now (pharmacists) are cancelling plans for staff Christmas bonuses and raises. They’re forgoing their own paychecks and laying off employees.”


Are you paying too much for your prescription? Search our database to compare your cost with what pharmacies are paying


On one prescription alone, Mesalamine, a generic anti-inflammatory drug thah treats ulcerative colitis, Kratzer said he was paid $412 below the cost of the medication. He attributed the loss to a $200 increase in the cost of the drug at the same time Medicaid reimbursements were slashed by roughly the same amount.

“How do you make that up when every Medicaid prescription is a loss?” Kratzer asked. “When I noticed the big drops in reimbursements this month it was like an anniversary. The same thing happened last October.”

Kratzer said the losses are taking a toll and he may have to sell his store, Kratzer’s Hometown Pharmacy.

“I’ve been asked by my son why do you not fill Medicaid prescriptions? I do it because the more volume I have, the higher the value my pharmacy if I have to sell. I don’t want to, but I’m considering selling. What alternative do I have?”

One Cleveland pharmacist, who spoke only on the condition he note be named for fear of business repercussions, said it's past time for state officials to cut ties with CVS Caremark.

“We’re getting hammered,” he said.

So far in October, he said he was paid 17 cents over cost per prescription by CVS Caremark. For one drug, Enoxaparin, a generic medication to treat pulmonary embolism, he was reimbursed $332 — down from $628 in September.

“They are out to eliminate the competition. They can change prices whenever they want,” he said of CVS Caremark, whose parent company owns the CVS retail drug store chain.

“Everyone knows what’s happening but no one does anything. When they are the last man standing, we’re all going to pay more.”

The numbers provided by pharmacists show the drastic cuts to pharmacists in the past two weeks by CVS Caremark mirror nearly to the penny what the pharmacy benefit manager did at this time last year.

Those actions last year were one catalyst to a year-long Dispatch investigation of the drug-supply chain that help prompt numerous reforms by lawmakers and an order from Medicaid to the managed-care companies that operate the program to terminate its contracts with pharmacy benefit managers and implement new, more transparent ones by January 1.

State Rep. Scott Lipps, R-Franklin, called CVS Caremark’s actions “a travesty” and said the company has betrayed taxpayers. Lipps, vice chair of the House Finance Committee, said he will draft a bill carving out pharmacy benefit managers altogether if the five companies that oversee the care for Medicaid patients don’t take action.

“We are no longer going to accept the tail wagging the dog,” he said. “I am holding the managed care companies responsible for doing something and if they don’t I will put forward a bill to carve out (pharmacy benefit managers) and I will get a bill passed.”

There are five companies that manage the care for the more than 3 million poor Ohioans on Medicaid. CVS Caremark is the pharmacy benefit manager hired by four of the five managed care plans to keep drug costs in check.

These revelations come after a year-long project by the Dispatch called Side Effects, which has focused on PBMs and their impact on drug prices. They have significant impact on the prices all of us pay for drugs.

Pharmacy benefit managers have surged in power in the marketplace over the past 15 years. They now earn $400 billion annually by being the middleman in the drug-supply chain.

They make significant money by negotiating one price with drug manufactures and then another price they pay to pharmacists to dispense those drugs. The difference in those numbers is called the spread.

The PBMs also charge pharmacists fees to process prescriptions, usually under 50 cents a prescription.

The Dispatch earlier this year analyzed data from 40 pharmacies across Ohio that found CVS Caremark charged Medicaid 12 percent more for drugs in 2017 than it paid pharmacies. An audit commissioned by Medicaid determined the spread to be 8 percent. It found PBMs took $224 million in spread to manage prescriptions for Medicaid in one year, three to six times the standard rate.

Medicaid plans to have a more transparent pass-through model in January 1. Betti said the pass-through model will allow Medicaid to review the reimbursements to pharmacists and question PBMs if auditors see swings in prices.

“This reinforces the importance of transparency and is why we took aggressive action to ensure full transparency by implementing a new drug pricing model to ensure that Medicaid enrollees have access to quality health care, including pharmacy benefits, at the best possible price for Ohio taxpayers,” Betti said.

Ohio Attorney General Mike DeWine has threatened a lawsuit to recoup taxpayer dollars from CVS Caremark but has yet to follow through on that threat.

Antonio Ciaccia, the lobbyist for the Ohio Pharmacists Association, said CVS Caremark’s actions are causing more pharmacies to close or forcing them to sell to bigger companies like CVS.

“Enough is enough,” he said. “Right now (pharmacists) are cancelling plans for staff Christmas bonuses and raises. They’re forgoing their own paychecks and laying off employees.”

latest story
PREVIOUS COVERAGE

Audit shows company failed to keep drug costs low for taxpayer-funded Medicaid

Oct. 21, 2018

The health insurance group that billed Ohio twice the amount of its competitors to deliver medicine to Medicaid patients also fell significantly short of its goal to keep drug costs low.

The revelation is yet another from an audit by HealthPlan Data Solutions that was commissioned by the Ohio Department of Medicaid to determine whether the state is getting fair prices on drugs.

>> Continue reading the story

Richard Cordray, Mike DeWine back state Medicaid reform on prescription-drug middlemen

Oct. 22, 2018

A major reform to the way the Ohio Department of Medicaid buys billions of dollars worth of prescription drugs seems likely to continue regardless of who wins the governor's race Nov. 6.

The department, under term-limited GOP Gov. John Kasich, announced in August that it would tell the state's five Medicaid managed-care plans to update their contracts with pharmacy middlemen that allowed the middlemen to charge taxpayers $224 million a year more than they were paying pharmacies for prescription drugs. The Medicaid department conducted its investigation after The Dispatch used confidential pharmacy data to conduct its own analysis that showed somewhat higher markups.

>> Continue reading the story

New ‘gag rule’ ban is expected to lead to saving on prescriptions

Oct. 17, 2018

Every day, pharmacist Aaron Clark of Equitas Pharmacy in the Short North must bite his tongue and disregard what’s best for his customers.

That’s because so-called gag rules imposed by pharmacy middlemen prohibit him from telling customers how they could save money on many prescriptions by paying out of pocket instead of using their health insurance.

>> Continue reading the story

Ohio taxpayers may be paying twice for the same Medicaid drug services

Oct. 7, 2018

The team that discovered that Ohio taxpayers were overcharged up to $186 million for Medicaid prescription drugs last year has uncovered an additional $20 million that might have been wasted to fund services for which taxpayers already were paying.

And state Medicaid officials initially did not want that information made public.

>> Continue reading the story

Censored analysis confirms complaints about pharmacy benefit managers

Sept. 18, 2018

The Ohio Department of Medicaid on Tuesday released a heavily redacted report analyzing the costly practices of pharmacy middlemen in the $24 billion tax-funded Medicaid program.

The move comes as a Franklin County judge continues to mull over whether to order disclosure of the full, or unredacted, analysis of drug pricing, pharmaceutical rebates and other cost data.

>> Continue reading the story

State warned against pharmacy middlemen's loopholes in contract

Sept. 16, 2018

As Ohio seeks to reduce costs and bring more transparency to Medicaid’s $3 billion-plus prescription drug program, experts warn: Don’t solve one problem by creating others.

Pharmacy benefits managers, who are the middlemen in the process of pricing and paying for prescription drugs through insurance programs, are the focus of the state's attention.

>> Continue reading the story

Medicaid prescription transparency lauded, but Yost still has questions

August 26, 2018

The Ohio Department of Medicaid says a new plan will bring the greatest transparency in the country to its managed-care programs.

But Ohio Auditor Dave Yost — also a staunch advocate of government transparency, especially involving Medicaid — is opposed to its immediate implementation.

>> Continue reading the story

Ohio experience raises questions about CVS-Aetna merger

August 19, 2018

Health-care giant CVS and insurer Aetna are poised to merge into a conglomerate that would dominate three important links in the health-care chain.

It would combine the nation’s largest retail pharmacy group with the third-largest health insurer. It also would include the country’s second-largest pharmacy benefit manager — the middleman between insurers and pharmacies that extracts discounts from drug manufacturers, bills health plans and determines how much pharmacies are paid. Already the seventh-largest corporation in the United States, CVS estimates that, post-merger, it would move up a few notches on that list.

CVS says the $70 billion deal would lead to better health care for consumers by simplifying the system, increasing access, promoting better primary care and lowering costs.

>> Continue reading the story

Ohio Medicaid drug audit calls for transparency, highlights pharmacy closures

AUGUST 16, 2018

A state audit of Ohio's Medicaid prescription drug business says there's not nearly enough transparency for state officials to know whether taxpayers are getting their money's worth from the $2.5 billion annual expenditure.

It also raises questions about whether a reimbursement setup dominated by pharmacy giant CVS is driving smaller competitors out of business and reducing Medicaid recipients' access to medicine.

>> Continue reading the story

Stark pharmacies struggle amid PBM issues; CVS offered to buy stores

AUGUST 16, 2018

CANTON Ohio Auditor Dave Yost is expected to release a report this morning that should shed light on whether pharmacy benefit managers or PBMs have been overcharging the state's Medicaid program at taxpayer expense.

The report, requested by state legislators, may also provide more information on whether PBMs are inadequately reimbursing pharmacists across the state, including in Stark County, for dispensing drugs to Medicaid patients. And it could reveal the spread — the difference between what it charges Medicaid and what it pays the pharmacists for the drugs — PBMs are pocketing.

>> Continue reading the story

Ohio firing pharmacy middlemen that cost taxpayers millions

AUGUST 14, 2018

The Ohio Department of Medicaid is changing the way it pays for prescription drugs, giving the boot to all pharmacy middlemen because they are using "spread pricing," a practice that has cost taxpayers hundreds of millions.

Medicaid officials directed the state's five managed care plans Tuesday to terminate contracts with pharmacy benefit managers using the secretive pricing method and move to a more transparent pass-through pricing model effective Jan. 1.

>> Continue reading the story

How so-called rebates drive up the cost of prescription drugs

AUGUST 12, 2018

Rebates demanded by pharmacy middleman from drug manufacturers are driving up Americans' prescription-drug costs by billions of dollars.

A Dispatch analysis of financial records from the country’s largest drug manufacturers found that practices of the pharmacy benefit managers, also known as PBMs, push the list price of their drugs well beyond actual costs.

>> Continue reading the story

Judge rules that part of CVS/Medicaid report can be released

AUGUST 7, 2018

A Franklin County judge has blocked release of a full state report detailing the costly practices of pharmacy middlemen in the tax-funded Medicaid program - at least for now - but will allow some parts to be disclosed.

Common Pleas Judge Jenifer French Tuesday granted a temporary restraining order at the request of CVS Caremark, which argued the 51-page analysis contains trade secrets including drug pricing, rebate and cost information.

>> Continue reading the story

State accuses pharmacy middlemen of 'driving up costs'

July 31, 2018

For the first time, state officials flatly accused pharmacy middlemen of "driving up costs" in the tax-funded Medicaid program and hiding their activities behind a veil of secrecy.

The new accusation comes in a Franklin County court filing that fight CVS Caremark’s attempt to keep secret a $50,000 report detailing how pharmacy benefit managers charged higher-than-industry-standard costs on prescription drugs for Medicaid patients.

>> Continue reading the story

Was CVS favored by state in multimillion-dollar deal to provide HIV drugs?

July 29, 2018

State officials awarded a contract to CVS last year that allowed the national pharmacy company not only to control federal money for HIV drugs in Ohio, but also to require patients to buy their medicine only at CVS pharmacies

>> Continue reading the story

DeWine tells Ohio’s pharmacy middlemen he’s ready to sue them

July 23, 2018

Ohio Attorney General Mike DeWine is ramping up his investigation into the costly practices of pharmacy middlemen, hiring outside counsel to assist with a probe he expects to lead to litigation against companies managing drug benefits for Medicaid and other tax-funded health insurance programs.

>> Continue reading the story

Report on pharmacy middleman pricing to stay secret -- for now

July 17, 2018

Plans to release a report documenting the costly practices of pharmacy middlemen were shelved by Ohio Medicaid officials on Tuesday at the request of a judge reviewing claims by CVS Caremark that the analysis contains confidential information and trade secrets.

Franklin County Common Pleas Judge Jenifer French asked for the delay to allow CVS Caremark time to identify information in the 51-page report it considers proprietary and it believes should be redacted before being released to the public, lawmakers and news media.

>> Continue reading the story

CVS sues state to block release of report on its drug pricing

July 16, 2018

CVS Caremark is suing the Ohio Department of Medicaid to block it from releasing the full report detailing how the pharmacy middleman charged taxpayers three to six times as much to process prescription drugs for the poor and disabled as the industry standard.

"The disclosure of proprietary information in the Caremark agreements would be devastating to Caremark's entire nationwide business model," CVS attorneys argued in an 18-page request for a temporary restraining order filed Monday in Franklin County Common Pleas Court.

>> Continue reading the story

Local pharmacies and their personal care in danger of disappearing

July 15, 2018

Mark Kratzer's pharmacy business seems to be as much a calling as a profession.

“I’ve always told people I’ll probably die at the counter, but I don’t know if I’ll have a counter to die at,” he said at his Wilmington store, Kratzer's Hometown Pharmacy.

He's far from alone. As with other health professions, part of the attraction of pharmacy is the chance to help others, but many independent and small-chain pharmacists say that's increasingly difficult to do.

>> Continue reading the story

Amid pharmacy benefit manager inquiry, officials' ties to CVS questioned

Possible conflicts of interest between the Kasich administration and CVS are fueling skepticism over whether Ohioans will see changes in a Medicaid setup that gives the national pharmacy company up to six times its actual cost of providing prescription drugs to Ohio's poor and disabled.

The relationships are shrouded in secrecy — in part because of confidentiality laws and in part because the administration of Gov. John Kasich has been less than forthcoming about critical aspects of CVS’s business with the state.

The concerns are heightened because Medicaid officials withheld key information from state legislators about CVS costs and displayed a reluctance to make substantive changes to a system that many lawmakers and pharmacists say is a ripoff of taxpayers.

>> Continue reading the story

Lawmakers tear into Ohio Medicaid officials: Are you incompetent?

June 28, 2018

Enraged by pharmacy middlemen making millions on Ohio’s health insurance program for the poor and disabled, lawmakers tore into Medicaid officials Thursday, accusing them of withholding data, failing to recognize the scope of the problem, and ignoring recommendations for reducing costs.

"Your attitude is callous and insensitive to the poor people we all serve," said Sen. Vernon Sykes, D-Akron, as he scolded Medicaid officials before the Joint Medicaid Oversight Committee.

>> Continue reading the story

HIV patient sues Ohio over drug-aid program requiring use of CVS

July 5, 2018

An HIV patient is using an anti-Obamacare provision in the Ohio Constitution to sue the state for forcing him to use CVS pharmacies if he is to receive benefits under a government program that helps with drug costs.

Edward J. Hamilton of Columbus filed suit this week in the Ohio Court of Claims against the state Department of Health in connection with the department’s HIVDrug Assistance Program, which requires participants to get their medicine through the national CVS pharmacy chain.

>> Continue reading the story

State health department, CVS sued over HIV mailing

July 1, 2018

The Ohio Department of Health has been sued in connection with a mailing that might have publicly disclosed the identities of 6,000 HIV patients. The suit follows one in another venue against CVS Caremark, the entity that actually sent the letters.

The suit against the state says that in allowing CVS to undertake the mailing, the state was sharing patients’ private medical information without authorization.

>> Continue reading the story

Editorial: Ohio must demand drug-pricing transparency

July 1, 2018

The more we learn about the operations of pharmacy benefit managers, the worse their greedy scheming is revealed to be.

PBMs, as they are known, were once hailed as an answer to provide needed cost controls through claims management for insurers and payers including Medicaid. But as their middleman role between prescription-drug manufacturers and payers has grown, they have been revealed as lining their pockets on both ends of the equation.

>> Continue reading the story

Drug middlemen charging Ohioans triple the going rate — or more

June 27, 2018

Pharmacy middlemen are charging Ohio taxpayers three to six times as much to process prescription drugs for the poor and disabled as the industry standard.

Figures in a study commissioned by Medicaid officials indicate that pharmacy benefit manager CVS Caremark billed the state about $5.60 per script, while Optum Rx charged $6.50 per script.

>> Continue reading the story

CVS Caremark cut payments to pharmacies amid $70 billion deal to buy Aetna

June 24, 2018

It happened in Ohio, Arkansas, Iowa, New Jersey, New York and possibly other states. Pharmacy middleman CVS Caremark suddenly cut the reimbursements it paid community pharmacies for drugs, some of them far below pharmacists’ costs for potentially lifesaving medications.

Each of the cuts happened late last year or early this year — all within a few months of when CVS Health announced it was acquiring health insurer Aetna.

In a Dispatch review of data collected from 40 pharmacies, the numbers back up what lawmakers and critics said happened in the fourth quarter of 2017: CVS Caremark sharply reduced payments to pharmacies.

>> Continue reading the story

CVS Caremark hitting pharmacists with fee increase

June 22, 2018

Under increased scrutiny about millions in tax dollars it receives to manage Medicaid drug benefits, CVS Caremark announced this week it will increase the fees it charges pharmacists, including to fill prescriptions for the poor and disabled.

The transaction fee increase effective Friday came the day after a state report showed pharmacy middlemen billed taxpayer-funded Medicaid 8.8 percent more than the amount they reimbursed pharmacists.

The practice known as "spread pricing" allowed the middlemen to take a cut of $223.7 million during the year ending March 31, according to an analysis commissioned by the Ohio Department of Medicaid.

>> Continue reading the story

State report: Pharmacy middlemen reap millions from tax-funded Medicaid

June 21, 2018

Pharmacy middlemen managing Ohio Medicaid’s prescription drug program billed taxpayers 8.8 percent more for medications than they paid pharmacies, according to an audit commissioned by the health insurance program for the poor and disabled.

That difference — $223.7 million — was kept by CVS Caremark and Optum RX, pharmacy benefit managers for Medicaid’s five managed care plans.

The analysis of more than 39 million drug transactions for the year ending March 30 appears to be the first comprehensive review of “price spread” on behalf of a government agency, state officials said. They hope other states follow suit.

>> Continue reading the story

'Cost-cutting' middlemen reap millions via drug pricing, data show

June 17, 2018

A middleman company hired to keep the state's prescription-drug prices in check for Ohioans on Medicaid is receiving millions in taxpayer money meant to provide medications for the poor and disabled.

Records of transactions provided to The Dispatch from 40 pharmacies across Ohio show that CVS Caremark routinely billed the state for drugs at a far higher amount than it paid pharmacies to fill the prescriptions. The state-sanctioned practice, known as "spread pricing," allows the middlemen, called pharmacy benefit managers, to keep the difference on medications used to treat health concerns ranging from mental illness to osteoporosis.

>> Continue reading the story

Wary Ohio officials want deeper look at how CVS sets drug prices

June 19, 2018

Ohio’s auditor and the attorney general said Tuesday that a Dispatch investigation into a middleman that collects millions in taxpayer dollars meant for Medicaid patients has raised significant concerns and they are launching concurrent inspections.

The response is to the latest investigation by The Dispatch that found CVS Caremark billed the state roughly 12 percent more for drugs than what it paid pharmacies for medications dispensed to Ohioans on Medicaid.

>> Continue reading the story

'Free' pain cream costs city more than $8,000 a prescription

June 10, 2018

Armed with prescription forms and a deceptive pitch, the pharmacy reps walked into a handful of Columbus police and fire stations.

The sales line went something like this: Here is a new topical cream that will ease your aches and pains. It also will improve your skin and even help eliminate stretch marks.

The cops and firefighters were told to try it, and handed a prescription form they could give to their doctor.

"It’s of no cost to you," was how the pitch ended.

>> Continue reading the story

Mail-order pharmacy system delays meds for some patients

June 3, 2018

Imagine the terror of being diagnosed with cancer.

Your doctor writes a prescription that you pray will save your life. You go to the hospital or oncology clinic’s in-house pharmacy. The medicine is right there on the shelf, but you’re told the only way your insurance will cover your medication, which might cost $10,000 or more per month, is if you get it through the mail.

So, you go home empty-handed and wait. If you’re lucky, the medicine will arrive in just a couple of days. But it could be up to a month before delivery of the drugs.

>> Continue reading the story

Pharmacist says CVS strong-arms cancer-drug business

June 3, 2018

Josh Cox says that CVS will go pretty far in trying to wrest the lucrative business of filling cancer-drug prescriptions away from oncology clinics.

The company, which operates a retail pharmacy chain and manages prescription-drug payments for millions of Americans, has long sent unsolicited faxes to cancer doctors, using confidential patient information, in an attempt to steer business to its own pharmacies, said Cox, pharmacy director for the Dayton Physicians Network.

>> Continue reading the story

CVS backs away from dark-money group it contributed to

June 1, 2018

Pharmacy giant CVS Health distanced itself Friday from a pro-Trump dark-money group that it contributed to. CVS said it only learned after it made its $500,000 contribution that the group’s leaders and members have a history of racist and other kinds of hate speech.

CVS, the country’s seventh-largest corporation, said its goal in making the contribution was to advance last year’s Republican tax cut. 

>> Continue reading the story

House committee OKs crackdown on pharmacy-benefit managers

May 22, 2018

A House committee on Tuesday recommended passage of bipartisan legislation aimed at lowering drug prices by targeting little-known middlemen in the pharmaceutical price chain.

House Bill 479, by Reps. Scott Lipps, R-Franklin, and Thomas E. West, D-Canton, would put into state law regulations on pharmacy-benefit managers, or PBMs, recently imposed by the Ohio Department of Insurance.

>> Continue reading the story

When pharmacy-benefit manager cuts put lives in jeopardy

May 21, 2018

Jo Anna Krohn is used to emergency calls. As director of Port 45 Recovery in Portsmouth, Krohn works with addicts in an area that is seen by some as ground zero for the nation’s opioid epidemic.

But last fall, she received a call that left her panicked.

It was from a local pharmacist warning that he could no longer stock a generic version of Suboxone because the state was reimbursing him so little for it that he was losing money. 

>> Continue reading the story

Powerful, secretive middlemen affect drug prices

May 20, 2018

The East Side pharmacist is ready to shout out the names of his customers before they walk through the door of his spotless and brightly lit pharmacy. Typically, the medication is on the counter before the customers make their way to the register.

For an independent pharmacist, those close relationships are vital to staying in business.

But what the pharmacist can’t share with customers is the rationale behind the prices they pay for their prescription drugs.

>> Continue reading the story

Aetna whistleblower, who says CVS gouged Medicare and Medicaid customers, is put on leave

May 17, 2018

A whistleblower with Aetna who accused CVS Caremark of gouging Medicaid and Medicare customers with high prescription-drug costs has been placed on paid administrative leave by the insurance company.

The move comes after the whistleblower’s lawsuit was unsealed in federal court in early April. It also comes as CVS Caremark, one of the country’s largest pharmacy benefit managers, pursues the acquisition of Aetna for a reported $69 billion.

>> Continue reading the story

Trump targets pharmacy benefit managers, but offers few details

May 11, 2018

President Donald Trump put a big target on the backs of pharmacy middlemen that negotiate drug prices with manufacturers and set payments to pharmacies Friday as he unveiled his plan to lower prescription prices for consumers.

Trump wants to reduce the spread between the price the pharmacy benefit managers, known as PBMs, pay for drugs and rate they pay pharmacies, an opaque system critics say allows PBMs to boost their profits. The system of secret rebates and gag orders on retailers encourages manufacturers to increase prices and undermines efforts to control costs.

>> Continue reading the story

Medicaid pharmacy management called ‘a public embarrassment’

May 10, 2018

As an Ohio lawmaker called the state’s method of managing Medicaid pharmacy benefits “a public embarrassment,” officials at one health-care plan agreed to rework its contracts to ensure taxpayers are getting the best deal for their dollar.

It’s the first time that a plan — CareSource Ohio — publicly agreed to make changes. The system that the Ohio Department of Medicaid uses to pay most of the $3 billion it spends each year on prescription drugs has come under intense scrutiny this year.

>> Continue reading the story

Trump going after pharmacy-benefit managers to cut drug costs

May 9, 2018

President Donald Trump will announce sweeping new restrictions Friday on pharmacy-benefit managers — middlemen who negotiate drug prices with manufacturers and reimbursements to pharmacies — as part of a sweeping plan designed to lower Americans’ prescription drug costs.

Critics point to three companies they say are using their dominance in the $300 billion marketplace to pad their pockets and drive out competition. 

>> Continue reading the story

Ohio workers’ comp exec on pharmacy setup: ‘We were being hosed’

May 4, 2018

As Medicaid officials investigate whether pharmacy middlemen are ripping off taxpayers by manipulating drug prices in the insurance program covering 3 million poor Ohioans, another state agency recently found it overpaid millions under a similar arrangement.

“We thought we had a solid contract that kept us from being taken advantage of (but) discovered we were being hosed,” said John Hanna, former pharmacy program manager for the Ohio Bureau of Workers’ Compensation

>> Continue reading the story

Ohio shies away from drug plan that saved West Virginia $38 million

May 4, 2018

West Virginia saved $38 million the first year it dumped managed care and handled pharmacy benefits for state workers and Medicaid recipients through a state university.

But Ohio refuses to even consider such a model for its multibillion-dollar Medicaid system, claiming such a change actually would cost the state money.

How can that be?

>> Continue reading the story

Iowa lawmaker/pharmacist literally calls ‘BS’ on CVS rationale for high drug prices

April 19, 2018

Pharmacy giant CVS has for months ignored questions in Ohio about a controversial pricing practice, but an Iowa legislative committee on Wednesday got the executive in charge to describe it.

He came after a lawmaker threatened a subpoena.

Rich Ponesse, senior director of trade finance for CVS Caremark, appeared before the Iowa House Government Oversight Committee to explain the difference between what his company pays retail pharmacies and what it charges health plans, a practice known as “spread pricing.”

>> Continue reading the story

Three CVS actions raise concerns for some pharmacies, consumers

April 15, 2018

First, CVS set up a website for consumers to compare drug prices.

But the site gave clear preference to CVS pharmacies, automatically putting them at the top of the comparison list. That occurred despite a “firewall” that’s legally required between the drugstore chain and CVS Caremark, the drug giant’s pharmacy benefit manager that runs the site.

Second, CVS’s benefit manager cut Medicaid reimbursements to local Ohio pharmacies this past fall, which some say put them in financial jeopardy. 

>> Continue reading the story

CVS says it will allow state to see closely guarded drug-price list

April 7, 2018

Ohio apparently is going to get a rare look inside the “black box.”

That’s the moniker used for the closely guarded drug-price lists used by pharmacy benefit managers, which are coming under fire in the Buckeye State and elsewhere for possibly increasing taxpayers’ cost to cover Medicaid prescriptions while lowballing reimbursements to independent pharmacies.

>> Continue reading the story

Lawsuit: CVS pricing actions same as accused of in Ohio

April 6, 2018

Pharmacy giant CVS has billed the government far more for seniors’ drugs than it paid to retail pharmacies, an executive with insurer Aetna alleges in an ongoing federal whistleblower suit that was unsealed this week.

The executive, Aetna’s chief Medicare actuary, said CVS admitted to a practice known as “spread pricing.”

>> Continue reading the story

State probing whether pharmacy benefit managers are overcharging taxpayers

April 6, 2018

Ohio Medicaid officials pledged Wednesday to investigate claims that pharmacy benefit managers are paying pharmacists far less to fill prescriptions than they charge the state, allowing them to pocket the difference.

Critics say the practice, known as spread pricing, is increasing costs in the tax-funded Medicaid program and driving many pharmacies out of business because some drug reimbursements are less than the cost to pharmacies of acquiring the medication.

>> Continue reading the story

Millions of Ohio taxpayer dollars at stake in debate over drug prices

March 25, 2018

Pharmacy benefit managers are receiving $1.54 per pill from Ohio’s Medicaid program for a drug commonly used to treat depression.

The state pharmacy association and operators of nearly two dozen pharmacies across the state say those same pharmacy benefit managers, or PBMs, are paying them only about 18 cents for each of those pills.

>> Continue reading the story

Ohio Medicaid official got job with CVS while still working for state

March 22, 2018

A pharmacologist with the Ohio Department of Medicaid last year negotiated a new job with pharmacy giant CVS while she was still employed by the state. She also worked a side job for CVS for almost the entire time she worked for the state.

Ohio ethics rules require state employees involved in job talks with a business affected by their work to inform their supervisors and step back from any work that might affect the business. But on Wednesday, the employee, Margaret Scott, told The Dispatch she never made such a disclosure.

>> Continue reading the story

Bill targeting pharmacy benefit managers gets first hearing in Ohio House

March 20, 2018

A House committee opened hearings Tuesday on a bipartisan bill designed to lower the cost of prescription drugs.

House Bill 479 — sponsored by Reps. Scott Lipps, R-Franklin, and Thomas E. West, D-Canton — takes aim at pharmacy benefit managers, known as PBMs, and other third-party administrators that operate as a middleman between insurance and drug companies.

>> Continue reading the story

State lawmaker on prescription drug middlemen: ‘We’re getting hosed’

March 15, 2018

State lawmakers criticized Ohio Medicaid officials Thursday, saying they’re slow to act on complaints that private pharmacy benefit managers appear to be profiting excessively by slashing reimbursement rates paid to retail pharmacies.

“We’re getting hosed,” Rep. Mark J. Romanchuk, R-Ontario, said after he and other members of the Joint Medicaid Oversight Committee were briefed by Medicaid officials.

>> Continue reading the story

One month she’s supervising state drug program, next month she’s with CVS

March 16, 2018

Margaret Scott had responsibility over the Ohio Department of Medicaid’s pharmacy program until she departed last fall. Within a month, she was working for a company that is receiving billions of pharmacy dollars from Ohio’s Medicaid managed care programs.

Scott and the contractor, pharmacy giant CVS, aren’t answering questions about what happened. But the state’s ethics watchdog — while not speaking specifically about Scott’s situation — said it’s illegal for a state employee to continue to be involved in decisions that might affect an outside business while negotiating a new job with that business.

>> Continue reading the story

Ohio legislature will look into CVS Caremark billing practices

March 13, 2018

State officials on Wednesday are expected to announce “efforts to update” the industry that handles prescription-drug benefits for millions of Ohioans.

The news comes a day after The Dispatch reported concerns by some pharmacists that a significant player in the industry, CVS Caremark, is charging Medicaid high prices and paying pharmacies low prices for the same drugs, which they say drives out retail competition. The company denies the accusations.

>> Continue reading the story

CVS accused of using Medicaid rolls in Ohio to push out competition

March 123, 2018

Pharmacy giant CVS stands accused of overcharging Ohio taxpayers millions in an attempt to drive out retail competition — a charge that CVS flatly denies.

Bottom line: The company allegedly boosts its profits by overcharging insurers for medications while often reimbursing pharmacists less than the cost of the drug, critics say.

>> Continue reading the story

Ohio lawmakers going after pharmacy benefit managers

Jan. 25, 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.

>>Continue reading the story