May 16, 2022

Since at least 2016, Ohio pharmacists have been accusing large companies acting as pharmacy middlemen of abusive practices, which they deny. And since 2019, the state has been accusing them as well, in the form of lawsuits.

Now, after years of wrangling in court, some of that litigation might be headed to trial.

The middlemen, known as pharmacy benefit managers, operate behind the scenes, but they’re part of some of the largest corporations 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 rebates from drugmakers, in part by controlling which drugs are covered by insurance and at what level. They contract with networks of pharmacies and decide how much to pay them for the prescriptions they dispense.

In 2016, two of the big-three PBMs — CVS Caremark and OptumRx — were working for Ohio’s five Medicaid managed-care companies. Late that year, many Ohio pharmacists complained, the companies slashed their reimbursements and then CVS — which was also their biggest retail competitor — offered to buy them out.

CVS and OptumRx insist their reimbursements have been fair and that their actions have saved money for consumers and taxpayers. But amid a newspaper investigation and one by then-Auditor Dave Yost, the Ohio Department of Medicaid in 2018 commissioned an investigation that showed that in 2017, CVS and OptumRx charged taxpayers $244 million more for Medicaid drugs than they paid the pharmacies that dispensed them.

 Click through to read: “After Years, Pharmacy-Middleman Suit Might Finally Come to Trial,” Ohio Capital Journal

Cohen Milstein is Special Counsel to the State of Ohio in these cases.