Association Perspective

Scott J. Knoer, MS, PharmD, FASHP, APhA executive vice president and CEO

Three years ago, Ohio sneezed, and states across the country caught a cold—but this cold is red-hot.

After months of pressure from the Ohio Pharmacists Association, state lawmakers, and Columbus Dispatch investigative journalists, the Ohio Department of Medicaid released a blockbuster report: Pharmacy benefit managers (PBMs) working on behalf of Medicaid managed care plans charged the state $224 million in hidden spread pricing. Spread pricing is when PBMs pay a pharmacy a low rate for dispensing a drug, bill a health plan a higher rate for the same transaction, and pocket the difference.

Ohio Attorney General Dave Yost subsequently filed a lawsuit against health care giant Centene; the state of Mississippi also signed on. Among other misdeeds, the lawsuit alleged that Centene’s Buckeye Health Plan charged Ohio’s Medicaid program nearly $2 in dispensing fees per prescription, but instead of paying the pharmacies that dispensed the medications, Centene pocketed $1.45 per prescription for themselves.

The good guys won. On June 14, 2021, Centene agreed to repay taxpayers $88 million in Ohio and $55 million in Mississippi. Though it did not admit fault, Centene also set aside an additional $1.1 billion should it decide to settle similar lawsuits filed in Arkansas, Georgia, Kansas, New Mexico, and several others.

Mounting scrutiny on PBMs is a welcome sight for pharmacists. PBMs were supposed to streamline straightforward, simple transactions and fairly compensate dispensing pharmacies. Instead, they added pointless complications, layers of secrecy, and massive amounts of waste.

APhA is relentlessly fighting for PBM reform on several fronts. We’ve already won in Ohio and Mississippi, and last year the U.S. Supreme Court dealt PBMs a major blow when it sided with Arkansas in Rutledge v PCMA.

Now bipartisan legislation called The Pharmacy DIR Reform to Reduce Senior Drug Costs Act has been introduced in the House and Senate. The bill would require that PBMs treat direct and indirect remuneration (DIR) fees the same way they do other pharmacy price concessions and move them to the point of sale. We are working with congressional leaders and vigorously recruiting more cosponsors to get the bill in front of the appropriate committees.

You’ll also recall that we’ve joined forces with the National Community Pharmacy Association in litigation against the federal government. HHS has failed to close a loophole allowing PBMs to increase DIR fees by 91,500% between 2010 and 2019. This cannot stand.

Stay tuned to hear about APhA’s latest salvos. Until then, visit apha.us/NoMore to support our efforts.