Since at least 2016, Ohio pharmacists have accused large companies acting as pharmacy middlemen of abuse, which they deny. And since 2019, the state has also accused them, in the form of lawsuits.
Now, after years of arguing in court, some of those lawsuits may go to trial.
The middlemen, known as pharmacy benefit managers, operate behind the scenes, but they are part of some of the largest companies in the United States. And the big three, which handle prescription transactions for more than 70% of covered Americans, are part of companies that also own major insurers.
Pharmacy benefit managers, or PBMs, negotiate discounts from drug manufacturers, in part by checking which drugs are covered by insurance and at what level. They contract with networks of pharmacies and decide how much they pay for the prescriptions they deliver.
In 2016, two of the three major PBMs — CVS Caremark and OptumRx — worked for the five Medicaid managed-care companies in Ohio. By the end of that year, many Ohio pharmacists complained, the companies lowered their fees, and then CVS — which was also their biggest competitor in retail — offered to buy them out.
CVS and OptumRx maintain that their fees have been fair and that their actions have saved money for consumers and taxpayers. But amid a newspaper investigation and one by then-accountant Dave Yost, the Ohio Department of Medicaid ordered an investigation in 2018 that found CVS and OptumRx were charging taxpayers in 2017. $244 million more for Medicaid drugs than they paid the pharmacies that delivered them.
Although that was a bomb, large parts of the analysis were redacted. Spurred on by lawmakers and the press, then-Director of Medicaid Barbara Sears decided to release an unedited version. CVS and Optum filed a lawsuit on July 16, 2018 to block the release.
That lawsuit continues even though The Columbus Dispatch was able to get behind the newsrooms, showing CVS reimbursed major competitors like Kroger and Walmart in 2017. much worse than it did its own pharmacies.
The case has been dragging on for nearly four years, with Franklin County Common Pleas Judge Andy D. Miller granting another stay last month.
But another, perhaps more substantive matter seems to be moving forward.
After becoming attorney general, Yost sued OptumRx in 2019 over his contacts with the Ohio Bureau of Workers’ Compensation. That lawsuit alleges that Optum defrauded the $16 million agency by failing to offer guaranteed discounts and through other practices.
It is scheduled to go to trial before Franklin County Common Pleas Judge Michael Holbrook on October 24, and the parties appear to be getting ready for the trial.
“We are in the discovery process and are planning accordingly for our October trial date,” Yost’s spokesman, Steven Irwin, said in an email on Tuesday.
An OptumRx spokesperson again denied that the company had done anything wrong.
“We are honored to have given the Ohio Bureau of Workers’ Compensation and Ohio taxpayers access to more affordable prescription drugs,” said spokesman Andrew Krejci in an email. “We continue to believe that these allegations are unfounded and will defend ourselves vigorously.”
Yost also has another of the three major PBMs indicted, Express Scripts, on behalf of the Ohio Highway Patrol System. The lawsuit is seeking an unspecified dollar amount after Express Scripts was “outrageously charged for services it failed to provide,” Yost said.
Express Scripts also denied wrongdoing. The case is now scheduled to go to trial before Franklin County Common Pleas Judge Colleen O’Donnell in June 2023.
When he announced the charges against the workers, Yost said it was the start of a series of lawsuits against the pharmacy’s intermediaries, and that his office would file other claims.
He took a big win last year after suing Medicaid healthcare provider Centene for dealings with his in-house PPE. Centene did not admit wrongdoing, but agreed Pay Ohio $88.3 million and set aside another $1 billion to settle similar claims in states that hadn’t even filed a lawsuit.
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