Report Finds Ohio Paid $224 Million More For Medicaid Drugs Than Middlemen

Jul 18, 2018

It’ll be at least a week before the state will release a full report it commissioned on how much it’s paying its pharmacy benefit managers compared with how much those pharmacy benefit managers are paying out to pharmacies for drugs for Medicaid recipients.

An executive summary of the report shows the state paid CVS Caremark and its other pharmacy benefit manager, Optum, nearly 9 percent more for drugs for Medicaid recipients than those middlemen paid out to pharmacies.

That adds up to almost $224 million. The summary shows those fees are three times what is industry standard for CVS Caremark and even higher for Optum.

Just hours before the report was to be released, CVS Caremark sued, saying the report contains proprietary information that would be devastating to its entire business model. But after initially holding back the full report, Medicaid said it’s in the best interest of the public that it’s released.

A Franklin County judge told Medicaid and CVS Caremark to agree on what should be blacked out in the report and come back to court next week.

In June, Ohio's Office of Health Transformation said it was too soon the say whether the $224 million differential is too high a price to pay for the pharmacy benefit managers.