Ohio Selects New Single Medicaid PBM, Sues One of Current Vendors

Ohio recently cleared a key hurdle in its plan to revamp how Medicaid enrollees’ pharmacy benefits are managed, choosing Gainwell Technologies as the single PBM that will replace big-name firms including Cigna Corp.’s Express Scripts, CVS Heath Corp.’s Caremark, UnitedHealth Group’s OptumRx and Centene Corp.’s Envolve Pharmacy Solutions.

Although PBMs and insurers generally oppose state moves to carve out pharmacy benefits from their Medicaid managed care contracts, Ohio says it expects the new single-PBM approach will “drive transparency, reduce pharmacy costs and simplify provider administration.”

“The main idea was to make sure that any PBMs that were serving the Ohio Medicaid managed care plans didn’t have conflicts of interest [and] weren’t steering business toward their sister companies — and also to save money for the state,” says Margaret Scott, an associate principal at Avalere Health who oversaw the Ohio Dept. of Medicaid’s pharmacy program until 2017.

Gainwell fits the bill in that it “doesn’t own any retail or specialty pharmacies; they don’t have any incentives to encourage members to use one drug or another. They’re free of any conflicts in that way,” Scott explains.

Ohio’s transition from multiple MCO-contracted PBMs to a single vendor is the culmination of a series of events in which the state publicly took PBMs to task for their business practices. In the most recent salvo, Ohio Attorney General Dave Yost (R) revealed on March 11 that the state is suing Centene Corp. “for an elaborate scheme to maximize company profits at the expense of the Ohio Department of Medicaid (ODM).” Centene, however, said the state’s claims are unfounded, and that Envolve Pharmacy Solutions “will aggressively defend the integrity of the pharmacy services provided to the State of Ohio.”

Ohio is not the only state to rethink how its Medicaid program interacts with PBMs. California and New York will effectively carve out pharmacy benefits from their managed care programs starting in April.

Such moves, Scott adds, are “part of a larger trend where states are taking more control of their pharmacy benefits — whether it’s doing it with a single PDL [prescription drug list] so that they’re maximizing their rebates and getting the lowest net cost on drugs, or it’s carving out pharmacy, or in other ways ensuring transparency in PBM contracts.”