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Fears ease on new pharmacy deserts in Ohio: 'The state is going to save a lot of money'

The Columbus Dispatch


The heart emojis drifting upward during – of all places – an Ohio Medicaid webinar provided the first clue.


After a month of harsh questioning from state lawmakers and pharmacists over whether Gov. Mike DeWine's administration was botching a drug-pricing revamp affecting nearly a quarter of the state's population, the critique turned to praise as key details finally were unveiled.


"In my 33 years of doing this, this is the most transparency I have ever seen from Medicaid," said Ernest Boyd, executive director of the Ohio Pharmacists Association.


"This appears to be the most fair process we’ve ever encountered. ... I think we’re on the road to very successful October implementation."


The turnabout greatly alleviates the chances that initially disgruntled pharmacists will abandon Medicaid, creating pharmacy deserts in which the most vulnerable Ohio residents can't fill potentially life-saving prescriptions.


Boyd's comments after the hour-plus webinar Friday laying out how the state would launch a single pharmacy benefit manager (PBM) this fall for the huge state-federal Medicaid program, which finances health care for more than 3 million poor and disabled. Ohio is dumping five private-sector PBMs, accused of undercutting local pharmacies, price gouging, and engaging in other questionable practices to maximize their profits.


“The state is going to save a lot of money,” Boyd said.


Ohio's Appalachian poor will still have access to prescription drugs

"I was very pleasantly surprised. We’ve been beating (Medicaid) over the head for years," said Andy Becker, vice president of pharmacy for Fruth Pharmacy, which has 10 stores spread across southern Ohio as well as stores in West Virginia and Kentucky.


"From my perspective they genuinely appear to have addressed this PBM issue appropriately and are trying to have a fair process in doing this whole thing,” he said.


Becker was one of the pharmacists who raised the prospect of having to close pharmacies; Fruth serves mostly Appalachian areas, several with high numbers of Medicaid recipients.

But after getting the additional information from the state, Becker said, “At first glance it appears to put us in a position where we don’t have to close them.”


Like Becker, Antonio Ciaccia, former lobbyist for the pharmacists group who now runs a pair of drug-price analytic firms, said a few tweaks still are needed to make the plan even better.


“What I see is a great improvement," Ciaccia said. "The question is, how does it work out?”


That's why the promised transparency is so important, he said, because it will show where and how to make improvements.


Best of all, Ciaccia added, is that the consultants hired by the state to run the new single PBM setup “have no skin in the game on pharmacies.” The current PBMs – such as CVS Health's Caremark or UnitedHealth Group's Optum RX – are part of some of the biggest corporations in the U.S., which also operate health insurers and pharmacies that can benefit financially from the PBMs' decisions.


If the state's new setup works as planned, Ohio taxpayers will save millions and Medicaid participants will no longer have to worry about the impact of a PBM funneling more state business to its own pharmacies, getting reimbursed one price by the state but paying pharmacies a lower price,or using take-it-or-leave-it contracts that force pharmacy payments weeks or months after a prescription is filled.


Not only that, but officials from across the country will rush to Ohio so they can mimic the savings for their state, Ciaccia said.


Pharmacies will get at least a 10-fold increase in fees to dispense drugs

"We tried to be fair and reasonable with all the pharmacies, including the independent pharmacies," said Ohio Medicaid Director Maureen Corcoran.


Because pharmacies in underserved areas of rural or inner-city Ohio often struggle financially, Corcoran said the state wants to "take special care of those with a high Medicaid caseload."


Pharmacies make money on Medicaid prescriptions mostly from two sources: Reimbursement for buying drugs, and a fee they collect to dispense that medication.


The dispensing fees currently average a paltry 73 cents per prescription, Medicaid staffers calculated. The new plan will pay fees ranging from $7.64 to $10.50. Smaller pharmacies and those with higher Medicaid caseloads will get the higher rate.


The amounts to reimburse pharmacies for Medicaid drug purchases will use both national and Ohio-specific data, which will get weekly updates. That factor quelled pharmacists' fears they would be stuck with the same reimbursement for months even if drugmakers increased their prices.