BREAKING: Pharmacy middlemen could lose billions in Ohio Medicaid contracts
Catching up? Read our latest pharmacy reporting here:
The companies, called pharmacy benefit managers, negotiate deals on drugs and process pharmacy claims.
But Ohio Medicaid announced Tuesday afternoon that the insurance companies will have to cancel their contracts with pharmacy benefit managers and enter new contracts with vendors using a different business model.
The new contracts will have to be in place by
"Ohio Medicaid's focus is to ensure that Medicaid enrollees have access to quality health care, including pharmacy benefits, and taxpayers get a fair price. Therefore, we are now taking aggressive action to ensure full transparency for the greater good of the public interest," the department said in a statement.
CVS Caremark, which contracts with four of the five Medicaid plans in
The pharmacy middlemen that are under scrutiny -- CVS Caremark and
A report in June revealed CVS Caremark kept 8.7 percent or the payments it received, or
Medicaid saved
However, critics have said those cost savings to the state have come at the expense of community pharmacies and transparency.
Under the current business deal that has been criticized, the pricing structure has not been transparent. Until the June report came out, the state government and the public did not know how much money the companies were keeping for their services.
In a letter to the insurance companies, Ohio Medicaid said under the new plan, the pharmacy benefit manager would charge the insurance companies exactly what it pays the pharmacy for prescription drugs and dispensing fees.
The pharmacy benefit manager would charge an explicit fee for its administrative services.
The Ohio Auditor is planning to reveal a report on Thursday that will have more details about how much the pharmacy benefit managers have been keeping for different drug types and in different parts of the state.
"We shared a draft of our report with (Ohio Medicaid) yesterday. We had hoped our report would have a significant impact on state policy. We just didn't expect it to happen this quickly," the auditor's office said in a statement.
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