Ohio leads nation in pharmacy benefit transparency
Source: Governor's Office of Health Transformation
Ohio Medicaid released the first report of its kind in the nation that shows the price the state’s Medicaid managed care plans pay for prescription drugs, the amount pharmacy benefit managers (PBMs) retain to administer the program, and the amount paid to pharmacies. The report was prepared by HealthPlan Data Solutions (HDS) based on one year of actual pharmacy claims data.
Now that the total amount paid per prescription is known for pharmacies ($59.90) and PBMs ($5.77), Ohio’s taxpayers, legislators, managed care plans and others are in a better position to assess whether or not the products and services provided for that price is fair. In addition, HDS identified the following:
- the spread between what was billed to plans and paid to pharmacies is 8.8 percent,
- independent pharmacies were paid more than CVS pharmacies for the same drugs, and
- Medicaid health plan PBM pricing saves Ohio taxpayers at least $145 million annually compared to fee-for-service pricing (savings increase to at least $245 million annually when revenue generated from managed care pharmacy benefit fees is included).
Ohio Medicaid will use this information to drive further innovation in pharmacy benefit administration. Specifically, Ohio Medicaid will require managed care plans to notify the state of any changes they plan to make as a result of the report, and Medicaid will use the HDS report to inform the state’s process of managed care rate setting in November for calendar year 2019. Ohio Medicaid also will monitor PBM pricing quarterly and publicly report if at any point the quarterly review raises a concern.