Ohio's attorney general, Dave Yost, has taken the first step in an effort to recover what Ohio characterized as “overcharges” to the state for the cost of prescription drugs negotiated by pharmacy benefit managers (“PBMs”).
PBMs are private companies that contract with state agencies such as the Bureau of Workers' Compensation (“BWC”) and Medicaid to manage drug prescriptions for clients of the agencies.
Attorney General Yost advised OptumRx that the BWC and the State of Ohio are seeking mediation with the American Arbitration Association to address $15,843,112 in so-called “overcharges” to the fund intended to protect injured workers. The attorney general alleged that the overcharges occurred because OptumRx failed to provide contractually agreed discounts on drugs.
“BWC's contract with OptumRx requires us to mediate any disputes before bringing litigation,” Attorney General Yost said. “I hope that OptumRx will refund these overcharges. I am investigating PBM practices on behalf of a number of state clients and will not hesitate to pursue overcharges and fraudulent conduct. This is an important first step in this process.”
The action came as Attorney General Yost and Governor Mike DeWine continued to review PBM practices to determine if Ohio was overcharged for drugs purchased on behalf of state agencies. Attorney General Yost has hired outside counsel and experts to evaluate PBM data and pursue litigation if necessary.
In a letter seeking mediation, Attorney General Yost asserted that OptumRx overcharged BWC for generic drugs purchased between January 1, 2015 and October 27, 2018.
The BWC's contract with OptumRx expired in October, and the BWC has contracted with a different PBM.
Steven A. Meyerowitz
Steven A. Meyerowitz, a Harvard Law School graduate, is the founder and president of Meyerowitz Communications Inc., a law firm marketing communications consulting company. He may be contacted at [email protected].