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PBMs’ Medicaid role under attack in some states

By Ivan Zhykhariev, The Capitol Forum

Republished with permission from The Capitol Forum, Vol. 6 No. 48; February 6, 2018. For the full story, click here.

The Medicaid role of Express Scripts, CVS/Caremark and other pharmacy benefit managers is under siege by Appalachian state legislators proposing bills that would curb or stop entirely a reliable revenue stream for the companies.

In Ohio and Kentucky, legislators proposed bills last month to replace PBMs with state agencies in performing the most important duties in managing the Medicaid recipients’ prescription benefits. West Virginia’s state Medicaid agency didn’t wait for legislation and last year unilaterally ended PBMs’ role in the program.

PBMs in many parts of the U.S. reimburse pharmacies for prescription sales to Medicaid recipients, process claims, and negotiate drug prices with manufacturers and distributors on behalf of the U.S. government health insurance program for the poor. But lawmakers in the three states, which have large Medicaid populations, told The Capitol Forum that PBMs have failed to substantially check drug price increases while pushing many independent pharmacies to the brink of bankruptcy with lower reimbursements.

“The question is whether we need PBMs in the first place,” said state Senator Reggie Thomas, a Democratic cosponsor of the Kentucky legislation and candidate for a U.S. congressional seat. “They failed to bring down the cost for drugs; prices have been rising.”

The move against PBMs comes on the heels of other recent state efforts to assert more authority over the companies. A Florida lawmaker recently introduced a bill requiring PBMs to disclose drug costs and permit pharmacists to tell consumers about drugs bought more cheaply without insurance. Under the legislation, PBMs would need to register with the state insurance regulator. Washington, New York and Nebraska are considering similar measures.

Other state legislatures such as New Hampshire’s are debating bills that ban the “gag clause” PBMs put in their drugstore contracts preventing pharmacists from telling customers about cheaper prescription drug options.

Push to limit PBM role. The push to limit PBMs’ role in Medicaid could affect the companies in some states more than others. If the Ohio bill passes, PBMs will stop providing any Medicaid-related services. Under the Kentucky bill, the PBMs would stop providing reimbursements to pharmacies but would still have a role in processing claims...

To read the rest of this in-depth investigative piece, click here.




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