Calls intensified Tuesday for the General Assembly to force more transparency from pharmacy middlemen accused of billing Ohio's Medicaid managed-care plans for much more than they reimburse pharmacists.
Ten witnesses — cancer patients, national consumer groups and others — appeared before the House Government Accountability and Oversight Committee to testify in favor of House Bill 479, which would require that pharmacy customers are told about and receive the cash price for medicine whenever it's cheaper than an insurance copayment. Ohio pharmacists have said their contracts with pharmacy benefit managers in some cases have gag clauses prohibiting them from telling customers that the cash price for drugs is cheaper than their copayments.
"Pharmacy-benefit managers (PBMs) are supposed to make drugs more affordable. Instead, PBMs retain a large share of the discounts and rebates they receive from drug manufacturers and reap profits by not passing them on to patients," said David Mitchell, a cancer patient and founder of Patients for Affordable Drugs NOW, a group based in Washington, D.C.
Mitchell told legislators that House Bill 479 could help thousands of Ohioans struggling to afford the high cost of needed medications.
The clamor for the bill is part of a much broader push for transparency for pharmacy-benefit managers in Ohio and elsewhere.
Pharmacy-benefit managers serve as middlemen between managed-care plans and pharmacies, determining formularies on available drugs, reimbursing pharmacies and billing the plans. The market has become dominated by three such companies, including CVS Caremark, which is part of the same company that owns the massive chain of CVS retail pharmacies.
CVS Caremark contends that it never prohibited the pharmacies with which it contracts from informing customers when they'd pay less by not using their insurance.?But a confidential copy of the company's provider manual prohibits pharmacists from disclosing "confidential Caremark information" including "business practices ... trade secrets ... maximum allowable (drug) cost lists ... reimbursement rates and terms."?
The Ohio Department of Insurance ordered the PBMs last week to stop enforcing any gag rules. But Heather Free, pharmacy director for nonprofit Equitas Health, told the committee on Tuesday that the legislation it's considering remains essential.
"It's still necessary in order to ensure that PBMs do not engage in the harmful clawback practice," she said.
Pharmacy-benefit managers say they negotiate better prices from drugmakers and pharmacies than customers would otherwise receive.
Mitchell said that by banning gag clauses, House Bill 479 "ensures that health plans and PBMs are not able to make unearned profits on the backs of patients."
"We hear from patients every day who must make heartbreaking decisions in order to afford their medications," Mitchell said. "They are cutting doses in half and skipping meals due to high drug prices. Drugs don’t work if patients can’t afford them."
For Robert Fowler, that's a scary prospect, indeed. The professor at Baldwin Wallace University outside Cleveland skipped two religion classes Tuesday to come to Columbus and tell the committee that his medication hasn't changed in the nine years he has been taking it, but its cost has jumped from $9,000 every 28 days to almost $14,000.
Asked after the hearing whether he knows why the cost has gone up, he said: "I don't know for sure because it's all so secretive. I do know the price of my super drug has gone up, up, up for nine years."
Dr. Robert Levin, president of the Alliance for Transparent and Affordable Prescriptions, based in Illinois, told lawmakers that PBMs inflate drug costs and that those higher costs reduce patient access to affordable medications. House Bill 479, he said, protects consumers.
"PBMs claim to pass a portion of the rebates and discounts they get from manufacturers back to the insurers to help drive down costs for patients, but due to the opaque nature of their contracts, most of these funds appear to go to their bottom line," Levin testified.
"Unfortunately, there is very little transparency surrounding PBMs and their role within the delivery system, nor are there any requirements to pass negotiated savings on to payers or patients. By imposing restrictions on PBMs regarding cost, HB 479 will help ensure Ohio patients do not pay any more than they must for the medications they need."