Ohio AG Yost Calls for PBM State Legislation

Employee Benefits & Executive Compensation
April 25, 2019
 

On Monday, April 22, 2019, Ohio Attorney General Dave Yost announced a four-step plan requesting immediate legislative action to address concerns regarding the state’s arrangements with its Pharmacy Benefit Managers (PBMs). PBMs are private companies that contract with health plans to negotiate prescription drug costs on behalf of the plans, with the goal of managing drug costs for the plans and the plan members.

Recently, Ohio began scrutinizing its arrangements with PBMs, starting with a state-wide audit of its Medicaid plans when Dave Yost was the Ohio Auditor of State, which found that the state was paying PBMs more than four times what had been previously reported. In early March of 2019, Attorney General Yost filed a lawsuit on behalf of the Ohio Bureau of Workers’ Compensation seeking a recovery of $16 million for alleged overcharges by its PBM. Then Ohio’s largest Medicaid insurer, Caresource, announced earlier this month that it was switching its PBM relationship from CVS to Express Scripts following the Auditor of State’s report.

Attorney General Yost’s four-step plan includes requests for legislation that will require:

  1. All of the state’s various PBM contracts be aggregated under one single contract and therefore administered through one point of contact;
  2. The Ohio Auditor of State have unlimited access to review all PBM drug contracts, purchases and payments;
  3. All PBMs working with state plans act as fiduciaries (requiring them to act in the best interest of the plans’ participants); and
  4. Any non-disclosure agreements, or gag orders aimed at concealing the costs of prescription drugs, be prohibited.

A link to Attorney General Yost’s press release regarding the four-step plan can be found here.


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