Will PBMs pay for past tactics, misdeeds?

After overcoming a communications snafu, the agency that provides health coverage for Ohio's poor and disabled seems on a glide path to throwing out controversial pharmacy benefit managers accused of gouging Ohio taxpayers and pharmacists.

But a key question remains: Will those PBMs ever pay a price for possible illegalities over the past several years?

After six months of investigating, state Medicaid Director Maureen Corcoran says she's still not sure the agency will ever get to the bottom of complex machinations by PBMs on the price and access of prescription drugs for some 3 million of Ohio's most vulnerable.

"Our work is not done," she said. "I knew it would be extraordinarily complex."

But Corcoran said she is neither clear about the investigation's next step, nor whether the problem can be resolved.

Ohio Attorney General Dave Yost also is probing the issue in what appears to many as a rival effort.

"We can't comment on an ongoing investigation," said Bethany McCorkle, Yost's communications director. "With that being said, AG Yost has been a national leader in holding PBMs accountable. It has been a top priority, and he has not abandoned his work in that warehouse."

'Clawbacks' saturate Medicaid

A key focus of the twin probes is the practice of "clawbacks." That's when PBMs "claw back" money from a pharmacy on a prescription that was filled weeks or even months earlier.

The PBMs say they merely are carrying out provisions of "effective rate" contracts to which pharmacies or their representatives had agreed. Pharmacists say that the near monopoly of PBMs – the three biggest control 80% of the business – result in take-it-or-leave-it contracts that heavily favor the middlemen in the drug chain.

Corcoran said her agency has discovered that controversial contracts allowing clawbacks "are pervasive through the Ohio Department of Medicaid's system."

Because those clawbacks take place after Medicaid has closed the books on a drug transaction,millions of dollars that went to PBMs are left unaccounted for by the agency, she told the legislature's Joint Medicaid Oversight Committee last fall.

That shortcoming means that Medicaid drug spending data that Ohio – and likely most, if not all other states – report to the federal government is falsely inflated. Since those totals typically are used to calculate how much taxpayers must pay for the program, funded by the state and federal governments, Americans across the country are likely being overcharged because of the PBM tactic, Corcoran acknowledged.

Questionable PBM tactics

Medicaid's discovery of widespread clawbacks comes despite the fact that the practice supposedly is illegal in Ohio.

The PBMs also may be violating an Ohio law mandating "pass-through pricing," which requires them to charge the state the same price they pay pharmacists to fill a prescription for a Medicaid recipient.

The question: What exactly violates the law, and what slips through a loophole in the law discovered by the Fortune 15 companies that run the PBMs?

Last July, The Dispatch detailed how the little-known tactic of clawbacks was taking place from coast to coast, helping to drive up prices and hurting pharmacies. At the time, Corcoran said Ohio was using a method that prevented the clawbacks from affecting state taxpayers.

Corcoran also said she wasn't sure the state had authority to probe the practice, which, in theory, is illegal in Ohio.

Corcoran announced the investigation in late December, followed by a sweeping information request of the privately owned managed care companies hired by the state to run Medicaid on a daily basis.

However, a few weeks later she cautioned that the Medicaid probe might not be able to get to the bottom of the impact of clawbacks because of their complexity.

"As we understand right now, the effective rate contracts tend to be executed at national levels across multiple lines of business. So what we're not sure is how that impacts the specific Medicaid line of business," she said in early February.

Now, the director says her department will attempt to obtain non-Medicaid contracts in an attempt to unravel the PBMs' dealings.

"We're going to keep pursuing it, and if the day comes when we put up the white flag, we'll tell you."

Trump: 'Such courage'

Last week the Texas Republican Party approved a platform that rejects President Joe Biden as the winner of the 2020 election — condemning the acceptance of even legitimate absentee ballots after Election Day in Ohio and many other states — and calls for a vote by the Texas legislature on seceding from the United States.

Former President Donald Trump hailed the move: "Such courage. But that's why Texas is Texas!"

He also said: "They know that a country cannot survive without free and fair elections (and strong borders!)."

Kasich: Letting 'crazies' take control

Former Ohio Gov. John Kasich offered his opinion of the new Texas GOP platform during his gig on CNN: "What happened in Texas was a clown show. I think even clowns were embarrassed by what they saw down there.

"You know, it brings up one important thing for all people who are interested in common sense and politics. If you leave the field and you let the crazies, you let the people who are really extreme take control, then these are the kind of things you get.

"And it works on both sides, both the Democratic and Republican Party in these primaries. If you let the extremes dictate who the nominees are, what the policies are, then you're going to end up in extremes and things that don't make sense and further polarize the country."

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@darreldrowland

Capitol Insider

Darrel Rowland

Columbus Dispatch

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