Ohio has changed the way it deals with pharmacy benefit managers in its new two-year budget.

According to the Columbus Dispatch, legislators were determined to cut the authority of privately managed care companies and the PBMs they hire and at the same time add transparency to the state's Medicaid drug supply chain. They approved a measure that gives the state new authority over prescription drugs intended for the poor, blind and disabled by cutting out managed care plans.

Instead, the Department of Medicaid will limit its contracts to a single pharmacy benefit manager for drug benefit administration. The PBM would have to report directly to the state on financial details including the cost of drugs, what pharmacies are paid to dispense them and more.

“The goal here is to ensure we don't have hundreds of millions of dollars in overspending,” said Travis Butchello, deputy policy director on health issues.

In addition, pharmacies stand to gain some $100 million to stem the tide of low reimbursements that has caused numerous pharmacies to close over the past several years.

PBMs have come under scrutiny not just in Ohio but nationally for their lack of price transparency. The Distpatch points to a state study last year that found that “PBMs billed Medicaid $244 million more in a single year than they paid pharmacies, resulting in a profit three to six times the standard industry amount.”

Pharmacists are happier than PBMs about the plan, as might be expected, although they're still not happy about having to deal with a single PBM “with monopolistic power,” according to Antonio Ciaccia of the Ohio Pharmacists Association, said. “We still strongly believe that PBMs with conflicts of interest in the pharmacy marketplace should not have price-setting capabilities, and until that is resolved, both the state and its providers will be vulnerable to be taken advantage of.”

Still, PBMs didn't come in for some of the harsher measures that were originally proposed by the Ohio House but did not end up in the final agreement: requiring the chosen PBM to act as a fiduciary for the state or “bans on PBMs demanding money back from pharmacists after a transaction and on gag rules that prevent pharmacists from telling customers that they'd save money by paying out of pocket for a drug rather than using their insurance.”

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PBMs lose out to pharmacists in Ohio budget deal

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