- 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, including the failure to honor pricing discounts, classifying generic drugs as brand name to charge higher rates and 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.
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.
A June 2018 commissioned audit made waves when auditors found that the PBMs managing Ohio's Medicaid prescriptions, including CVS Caremark and Optum, charged the state nearly 9% more than what they paid pharmacies for the actual drug. The audit urged the state to switch to a different pricing model, or what's known as a "pass-through" pricing option. The state listened, ending the contracts and instituting new terms that did not include spread pricing.
Yost, then state auditor, conducted his own audit of the program, finding the overall average spread price charged was $5.71. PBMs, which process millions of prescriptions, could earn more by keeping a portion of the amount paid by the health plan instead of passing it along to pharmacies.
PBM are under the microscope outside of Ohio, too. The U.S. Supreme Court is set to soon hear a case on whether states can regulate certain aspects of a PBMs' business, including spread pricing.
Spread pricing is also the target of federal regulators. CMS last year proposed to limit spread pricing on a plan's medical loss ratio. Essentially, CMS wants Medicaid managed care plans to exclude any excess money retained by a PBM using spread pricing from the actual cost of claims used to calculate a plan's medical loss ratio.
The rule was designed to force PBMs to disclose spread pricing to managed care plans, ensuring better accounting of spread pricing and accurate reporting of a plan's medical loss ratio. The rule is still under review.
This isn't the first time Yost has taken on a large PBM as attorney general. The first lawsuit was filed last year alleging UnitedHealth Group's PBM OptumRx overcharged the Bureau of Workers' Compensation by $16 million. The case is waiting on rulings from a judge on several motions, Yost's office said in a statement.