Attorney General Dave Yost seeks transparency rules for drug price middlemen

Ohio Attorney General Dave Yost

Ohio Attorney General Dave Yost talks to reporters Monday about proposed new transparency rules for pharmacy benefit managers.

COLUMBUS, Ohio—Attorney General Dave Yost isn’t sure whether pharmacy benefit managers are bilking taxpayer money from the state. But he wants lawmakers to pass reforms so he and other state officials can find out.

On Thursday, Yost laid out four recommendations for state lawmakers to improve transparency for “PBMs” -- middlemen who negotiate drug prices on behalf of state employees, public retirees, injured workers, and Medicaid recipients. The companies, which have made hundreds of millions from state contracts, have come under scrutiny over whether they have saved or cost the state money.

Yost’s recommendations include:

  • Giving Ohio’s state auditor unrestricted authority to review all PBM drug contracts, purchases and payments made on behalf of the state;
  • Banning PBMs from imposing "gag orders" that prevent pharmacists from telling customers about cheaper drug options;
  • Consolidating all the various contracts that different state agencies and pension plans have with PBMs into a single, overarching contract;
  • Requiring PBMs to sign fiduciary agreements, which would legally require PBMs to always act in the interests of the state, rather than themselves.

At a news conference, Yost said he suspects that PBMs are costing the state tens of millions of dollars.

“But the bottom line is there is no transparency, so we still don’t really know,” Yost said.

The attorney general said that lawmakers have already shown “a lot of interest” in increasing accountability rules for PBMs. But he added that at least one of his proposals – to create a single PBM contract for state agencies and retirement plans – may end up being only an “aspirational goal,” because of the different goals that various state agencies and pensions have when they hire PBMs.

Lawmakers have introduced some of Yost’s proposals before – such as a ban on pharmacist “gag orders” -- but they haven’t passed the Ohio General Assembly.

Spokespeople for Ohio House and Senate leaders didn’t immediately respond to requests for comment on Yost’s proposals.

The Pharmaceutical Care Management Association, a national PBM industry group, said in a Monday statement that it is reviewing Yost’s proposals. However, the group applauded the AG for examining prescription drug prices.

“PBMs support transparency that lowers prescription drug costs for consumers, and offers providers and health plans the information necessary to improve patients’ health outcomes,” the PCMA stated.

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