Tuesday, October 13, 2020

Tuesday Tip of the Week: Institute new contract terms that do not permit spread pricing

Ohio Attorney General Dave Yost is going after another pharmacy benefit manager in court, alleging Express Scripts overcharged the Ohio Highway Patrol Retirement System, a public pension fund, and "pocketed millions."

The lawsuit alleges multiple contract breaches by Express Scripts:

1) Failure to honor pricing discounts
2) Classifying generic drugs as brand name to charge higher rates 
3) Overcharging for generic drugs 

Express Scripts, now owned by Cigna, declined to comment. Yost said Express Scripts "egregiously charged for services it didn't deliver," costing Ohioans millions, according to a statement released Monday. "We want our money back," he added.
How spread pricing works - Click to eliminate

Ohio has put PBM business practices under scrutiny, leading the state to end the practice of spread pricing, a tactic that has become increasingly controversial. State lawmakers also mandated that the state move to one single PBM as an attempt to better safeguard state dollars, but it has yet to happen.

The lawsuit is another step in pushing for more PBM transparency in Ohio. "It's no secret that PBMs have been keeping secret their prescription pricing in order to evade public scrutiny and rake in revenue," Yost said in a statement.

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