CVS accused of using Medicaid roles in Ohio to push out competition

Pharmacy giant CVS stands accused of overcharging Ohio taxpayers millions in an attempt to drive out retail competition — a charge that CVS flatly denies.

Bottom line: The company allegedly boosts its profits by overcharging insurers for medications while often reimbursing pharmacists less than the cost of the drug, critics say.

As a result, retail pharmacies in the Buckeye State have been dropping like flies, and state regulators are looking at ways to bring more transparency to a Medicaid benefits-management system that CVS dominates.

“Where I’m losing pharmacies right now is in high-Medicaid areas,” said Antonio Ciaccia of the Ohio Pharmacists Association. He noted that 165 Ohio pharmacies have shuttered in the past two years.

Medicaid, the federal-state health program for the poor and disabled, will spend about $3.2 billion on prescription drugs in Ohio this year. CVS Caremark, an arm of the company that manages pharmacy benefits, handles most of that money by billing insurers that contract with the state and then reimbursing pharmacies that fill patients’ prescriptions.

Ohio Medicaid Director Barbara Sears stressed, “This is not an Ohio Medicaid problem. This is impacting all 50 states. It’s a CVS Caremark issue, and it’s not just impacting independent pharmacies.” Sears said “larger chains” also have complained about reimbursement rates.

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By Catherine Candisky and Marty Schladen
The Columbus Dispatch