Ohio Attorney General Dave Yost has called for immediate legislative action to contain the amount that Ohio taxpayers are billed for prescription drugs purchased for state employees.
In a statement, Attorney General Yost said that pharmacy benefit managers (“PBMs”) “have taken advantage of the lack of transparency and lack of centralization to the detriment of Ohio taxpayers. This must stop. Centralization will allow for the comprehensive review of prices across the entire drug purchase portfolio to eliminate this problem.”
He added that, in their “middleman” role, “PBMs have used secrecy and subterfuge to pad their own profits instead of passing savings along to customers.
“When state agencies entered into these nebulous deals with PBMs, they unknowingly hired a fox to guard the henhouse,” Attorney General Yost declared. “But he was a smart fox. He didn't kill the chickens; he helped himself to the eggs.”
The attorney general recommended “a solution based on market principles, not the creation of another government bureaucracy,” identifying four objectives that he said should be met:
- State drug purchases should go through a master PBM contract that is administered through a single point of contact.
- The Ohio Auditor of State should have unrestricted authority to review all PBM drug contracts, purchases, and payments.
- PBMs must be fiduciaries.
- Nondisclosure agreements (“NDAs”) on drug pricing with the state must be prohibited.
On March 15, Attorney General Yost filed suit against OptumRx on behalf of the Ohio Bureau of Workers' Compensation seeking to recover nearly $16 million in what he contended were “overcharges” to the fund intended to protect injured workers.
The attorney general's office also is examining seven other PBM contracts with state agencies. Those state agencies are the Department of Medicaid; the Department of Administrative Services; the Ohio Public Employees Retirement System; the Ohio State Highway Patrol; the School Employees Retirement System of Ohio; the State Teachers Retirement System of Ohio; and the Ohio Police and Fire Pension Fund.
Victoria Spears
Victoria Prussen Spears is senior vice president of Meyerowitz Communications Inc., a law firm marketing communications consulting company. A graduate of Sarah Lawrence College and Brooklyn Law School, Ms. Spears was an attorney at a leading New York City law firm before joining Meyerowitz Communications. She may be contacted at [email protected].