CVS Health Statement on Ohio Auditor of the State’s Report on Pharmacy Benefit Managers

Thursday, August 16, 2018

CVS Caremark works hard every day to help its Ohio Medicaid clients manage their drug costs and make it possible for Medicaid recipients to have access to the vital medications that they need.  Overall, PBMs have saved Ohio taxpayers $145 million annually by servicing the state’s Managed Medicaid plans, even as drug manufacturers’ prices have continued to rise.

Ohio’s Medicaid expenditure per prescription is more than 13% below the collective average costs of states that manage their own program versus using a PBM.

We remain committed to continuing to work together with the state and the managed-care plans to improve the system, lower drug costs and serve the health care needs of Ohioans. 

When reviewing the Ohio State Auditor’s report on PBMs released this morning, it is important to keep the following facts in mind:

  • Government-mandated rebates in the Medicaid program are shared by the states and the Medicaid program. PBMs do not receive and, therefore, do not keep any of those mandated rebates. CVS Caremark also passes 100% of any supplemental rebates to our Ohio Managed Medicaid clients. In other words, we do not keep any amount of a drug manufacturer’s rebate for Medicaid prescriptions in Ohio. 

  • Counting the number of pharmacy closures does not paint the full picture, because it does not take new pharmacy openings into account, nor the growth of independent pharmacies within our PBM network. Independent pharmacies make up about 40% of all of the pharmacies in our national network. And we’ve added 63 independent pharmacies in Ohio to our network in just the last three years.

  • CVS Health maintains stringent firewall protections between our CVS Pharmacy retail business and our CVS Caremark PBM business to prevent any anti-competitive activity by either side of our enterprise.

  • Under the pricing model chosen by our Ohio Managed Medicaid clients, the “spread” paid to CVS Caremark is in lieu of our clients paying a separate administrative fee, and it funds vitally important benefit management services we provide to clients, such as clinical and customer support, programs to improve medication adherence, management of the drug formulary, and other services.  However, we are actively working with our Ohio Managed Medicaid clients to restructure our contracts to implement the new “pass-through” pricing model requirement, effective January 1, 2019.

Related Articles