The way Ohio delivers prescription drugs to Medicaid recipients underwent a major change Tuesday.
CareSource, by far Ohio's largest Medicaid managed-care provider, announced that it was firing CVS Caremark as its pharmacy benefit manager. Starting Jan. 1, the 1.2 million Medicaid clients served by Dayton-based CareSource will have their prescriptions handled by Express Scripts, another of the nation's three dominant pharmacy benefit managers, or PBMs.
The move comes after more than a year of scrutiny by government officials and The Dispatch of CVS' pricing practices. A study found that in 2017, CVS charged taxpayer-funded companies such as CareSource as much as almost $200 million more for prescription drugs than it reimbursed pharmacists. CareSource paid CVS' PBM $1.4 billion a year, with CVS keeping $114 million.
Top executives with CareSource said the change is the result of a year's worth of work trying to bring transparency to drug pricing.
“As we looked through the contract, rebates, fees, administrative stuff, we want to make sure that it's all there — so there's nothing hiding, nothing leaking, it's all there,” CareSource President & CEO Erhardt Preitauer said in a phone interview. “We're so serious about it we're working with our state partners right now to find a third party that is going to come in and actually verify that indeed, not only do we have it contracted, indeed everything's there.”
CVS didn't comment for this story, and CareSource officials didn't answer directly when asked if CVS balked at the new arrangement.
CareSource clients make up more than half of all Ohioans enrolled in Medicaid managed care. Three of the other four managed care plans also use CVS as a PBM, and it's unclear whether that will change.
“The goal of the Ohio Department of Medicaid is complete transparency. The ‘pass through’ model was implemented Jan. 1 to begin to address transparency concerns with the PBMs,” department spokesman Kevin Walter said.