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AG Yost Calls for Immediate Legislative Action on PBMs

4/22/2019

(COLUMBUS, Ohio) — Ohio Attorney General Dave Yost today outlined a four-step plan to contain the amount that Ohio taxpayers are billed for prescription drugs purchased for state employees, calling for immediate legislative action on the recommendations.
 
The announcement reinforces the attorney general’s previous comments calling for greater transparency for pharmacy benefit managers (PBMs), private companies that contract with state agencies to manage drug prescriptions for clients of the agencies.
 
“PBMs have taken advantage of the lack of transparency and lack of centralization to the detriment of Ohio taxpayers,” Yost said. “This must stop. Centralization will allow for the comprehensive review of prices across the entire drug purchase portfolio to eliminate this problem.”
 
In their middleman role, PBMs have used secrecy and subterfuge to pad their own profits instead of passing savings along to customers.
 
“When state agencies entered into these nebulous deals with PBMs, they unknowingly hired a fox to guard the henhouse,” Yost said. “But he was a smart fox. He didn’t kill the chickens; he helped himself to the eggs.”
 
The attorney general recommended “a solution based on market principles, not the creation of another government bureaucracy,” identifying four objectives that should be met:

  • State drug purchases should go through a master PBM contract that is administered through a single point of contact.
  • The Ohio Auditor of State should have unrestricted authority to review all PBM drug contracts, purchases and payments.
  • PBMs must be fiduciaries.
  • Nondisclosure agreements (NDAs) on drug pricing with the state must be prohibited.
On March 15, Yost filed suit against OptumRx on behalf of the Ohio Bureau of Workers’ Compensation seeking to recover nearly $16 million in overcharges to the fund intended to protect injured workers.
The attorney general’s office is also examining seven other PBM contracts with state agencies. Those state agencies are 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.
 
Yost acknowledged that Ohio has already taken steps to improve the way PBMs are paid, but he said the state can do more. “Ohio needs to aggregate its purchasing power to become a better negotiator and a smarter consumer.”
 
NOTE: The Ohio Attorney General’s Office can provide video/still images for news download and use. Please email jonathan.quilter@ohioattorneygeneral.gov to receive a download link.

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