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Contact your senator! The time for Medicaid pharmacy payment reform is now!

It has now been over a year and a half since OPA really started making headway in exposing the hidden exploitation of pharmacies and taxpayers at the hands of pharmacy benefit managers (PBMs) within the Ohio Medicaid system, and now that the truth has been exposed and PBM reform is underway, we need your help to fix Ohio's broken pharmacy payment model. And we need that help right now.

As we speak, Senator Dave Burke, with the support of other state senators, has put a proposal on the table that would not only rein in PBM pricing manipulation in the Ohio Medicaid managed care program, but it would stop the bleeding of destructively low Medicaid reimbursements and put pharmacists on the path to be better integrated onto the health care team as a value-added provider, rather than a volume-driven commodity. The holistic proposal is "the fix" that pharmacists, policymakers, and media have been waiting for, and while we believe we are close to putting the issue to bed, we need your help right now to get this fix across the goal line!

We need you to call your state senator or use the web form on this page to tell your elected officials about the need to reset and repair the Medicaid pharmacy program through the state budget bill (HB 166) to return some of the value that was taken out of the system by PBMs and to repair a pharmacy marketplace that was exploited and compromised by industry middlemen.

Budget amendments are due by this Friday at 5:00 pm, which means you need to make sure you make your voice heard before the close of the week! Tell your state senator to support Senator Burke's proposal to fix Ohio Medicaid's broken PBM system and pharmacy payment model!

Pharmacies cannot continue filling prescriptions for Medicaid patients at rates that are as low as 20% of a pharmacy's average cost to dispense, and lawmakers need to take action now to ensure that more pharmacies don't have to shred their staffing levels and to ensure that more communities don't lose access to their only local health care providers.

The proposal that has been submitted and recommended by Senator Dave Burke achieves the necessary balance of establishing a more predictable and sustainable pharmacy payment model, curtailing PBM pricing manipulation, being responsible with state budget dollars, and positioning pharmacists to yield even greater value to the state moving forward through incentive-based payments.

Specifically, here's what the proposal would do:

  • Strip PBMs of unchecked price-setting capabilities in the Medicaid program, in exchange for surveyed reference-based prices for the drug (through a benchmark like NADAC), and transparent, set dispensing fees averaging no less than $5 per prescription, plus the ability to make an additional 50 cents per prescription through incentive-based payments.
    • Rather than allowing middlemen to set drug prices at their own whims, by using reference-based pricing benchmarks like National Average Drug Acquisition Cost, NADAC, (which is conducted through CMS and surveys pharmacies monthly on their invoice acquisition costs for prescription drugs, making it an actual reflection of market-based rates), the state can insulate themselves from PBM overcharges like the ones that cost the state $244 million in just one year.
    • This will provide pricing accountability not just for PBMs, but for wholesalers as well. Inserting reference-based prices better equips pharmacies with the data they need to push back on out-of-line reimbursements and purchases, which creates the supply chain accountability that the current system is lacking. Under a NADAC-based system, if a pharmacy is being underpaid, now the pharmacy knows that the wholesaler price is out of whack and can pressure them accordingly.
    • The current model, which allows PBMs to overpay on some drugs and underpay on others, begins to even out the margins and insulate the market from revenue-shifting that seems to be driving margins to drugs predominantly dispensed by PBM-owned pharmacies. Additionally, this helps prevent medication access issues like the one that dried up generic Suboxone access in 2017.
    • While $5.50 is still well below the cost to dispense, this is a reasonable middle ground to provide predictability and better sustainability than the current model, and more importantly, reestablishes a foundation to build new, innovative payment models into pharmacy.
  • Create new incentive-based payments - to be developed by the Ohio Department of Medicaid - to begin paying for more than filling prescriptions.
    • The current incentive system in pharmacy rewards pharmacies that fill more prescriptions at faster paces. By moving the focus to the overall quality of the service and outcomes of the patient, we can begin to quantify and reflect the value proposition of the pharmacist. This incentive shift should alleviate the pressures of high-speed environments in many practice settings and instead, emphasize the need for pharmacists to take time with their patients in order help them achieve positive outcomes. By pivoting the incentives, we can make pharmacy more of a true profession.
  • Puts the state in greater control of their economic fate, and minimizes risks for anti-competitive behavior in the marketplace.

This week, the Ohio Senate released their sub-bill of HB 166, and while there are PBM reforms in the works, the bill is still lacking the necessary fixes to the pharmacy marketplace. Senator Burke's proposal will address both sides of the Ohio's Medicaid pharmacy benefits problem: it will get PBM pricing practices under control, and it will fix Ohio's broken Medicaid pharmacy payment system.

All Ohio pharmacists should contact their state senators by phone or the web form on this page now to ask for their support of adding Senator Burke's budget proposal to fix Ohio's broken pharmacy payment system and end state overspending on prescription drugs, secure local pharmacy access in Ohio's communities, and to transition pharmacy from volume-based care into value-based care.

We are close to fixing this mess, but we need your help. Budget amendments are due this Friday, so the time to act is now!

If you need more background, talking points, or information on Ohio's road to PBM reform, click here, review the state auditor's report, or check out the Columbus Dispatch Side Effects series.

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