The Employer's Guide Blog for Overseeing PBMs

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Ohio Cancels Bad PBM Contracts and Quickly Gets a Better Deal

Medicaid managed-care provider CareSource last week announced that it had inked a new contract with pharmacy-benefit giant Express Scripts that CareSource said would bring groundbreaking transparency to Ohio’s billion dollar Medicaid drug marketplace. But the contract itself is secret.

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That has some experts questioning whether there still will be room for the kinds of non-transparent behavior blamed for costing taxpayers billions nationwide. The price of prescription drugs is the fastest-growing part of the health-care sector, and critics have blamed pharmacy middlemen such as Express Scripts, CVS Caremark and OptumRx for part of that rapid rise.

Tyrone’s Commentary:

Personally, I don’t mind so much that the contracts are being kept secret even though it is Medicaid. The most important point is that the contracts are now radically transparent – hopefully. Let’s not play “move the goalpost” once all the hidden cash flows have been eliminated. If radical transparency is the goal and you win continue monitoring the PBMs performance but move some of that focus to improving patient outcomes. For those of you who said it [radical transparency with the big 3] can’t be done here’s mud in your eye. Radical transparency can be won with PBMs. Purchasers of PBM services need only to be relentless in their pursuit of it. Part of that pursuit requires stakeholders to get more sophisticated in how they deal with non-fiduciary PBMs. Ohio did and it appears they are winning.

The critics say the pharmacy benefit managers used secrecy to raise prices and boost profits while the PBMs say they’re saving consumers money. Duh!

Tyrone Squires, MBA, CPBS

I am the proud founder and managing director of TransparentRx, a fiduciary-model PBM based in Las Vegas, Nevada. We help health plan sponsors reduce pharmacy spend, by as much as 50%, without cutting benefits or shifting costs to employees.

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