Pharmacy Benefits Managers

What's A Pharmacy Benefit Manager, Anyway?

Aug 28, 2018
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The Trump administration says pharmacy benefit managers (PBMs) perpetuate high drug prices. In Ohio, the state's Medicaid program tore up its contracts with PBMs, saying the companies need to change their business models if they want back in.

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The state auditor is urging lawmakers to tell Ohio Medicaid to halt its plan to change its contracts with two pharmacy benefits managers over the way those prescription drug middlemen price their services.

pharmacy technician counts pills
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Ohio Medicaid is telling its five managed care plans to sever their contracts with two pharmacy benefits managers and to work up new deals by the beginning of the year. It’s a sudden change for the agency.

Several states are questioning the cost of using pharmacy middlemen to manage their prescription drug programs in a movement that could shake up the complex system that manages how pharmaceuticals are priced and paid for.

Richard Cordray
Steve Helber / Associated Press

Richard Cordray, the Democrat running for Ohio governor, laid out his health care plan in Cleveland on Tuesday.

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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.

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A new audit commissioned by Ohio’s Medicaid program shows that there’s a nearly 9 percent differential between what the state pays the two companies managing Medicaid pharmacy benefits and what those companies pay pharmacies for those drugs.

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State lawmakers want more information about the billing practices of companies that handle prescription drug benefits for millions of Medicaid recipients in Ohio. That's because they’re being accused of using the pharmacies they operate to drive smaller pharmacies out of business.