Editorial: Stop soaking taxpayers for Medicaid drugs

Did you know that for every 60-mg caplet of duloxetine dispensed in Ohio through a Medicaid-contracted managed-care company, taxpayers pay a middleman $1.54, but the middleman passes only about 18 cents of that to the pharmacy that supplies the drug and pockets the $1.36 difference?

Sen. Bill Coley, R-West Chester, didn’t know, and he’s on the Senate Medicaid Oversight Committee. “We thought there was some nominal fee to PBMs but had no idea (the fees were so large),” Coley said. “It’s ridiculous.”

He’s talking about pharmacy benefit managers — private companies that contract with managed-care companies to handle prescriptions — deciding which drugs to cover and how much to reimburse pharmacies for them. Most of Ohio’s Medicaid members are served by one of five managed-care companies that contract with the state. For four of those companies, CVS is the subcontracted pharmacy benefit manager, or PBM.

What’s equally ridiculous is that state officials have tolerated contracts under which CVS and other PBMs get to decide how much they’ll charge taxpayers for a drug and how much they’ll pay the pharmacy for it without having to disclose any of that information.

Lawmakers say they’re taking steps to bring transparency to such contracts, and that’s important. But while they’re at it, they should set some reasonable guidelines for how much of a pharmacy transaction the PBMs are allowed to pocket.

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