State suit against drug middlemen delayed

Ohio’s first lawsuit against middlemen accused of overcharging state agencies for prescription drugs has again been delayed. 

Originally slated for trial last March, the Bureau of Workers’ Compensation case against OptumRx now is scheduled to be heard on Nov. 1, 2021.

In it, the state says Optum overcharged the agency between 2015 and 2019 by $16 million — a relatively paltry sum by prescription drug standards. But it could have much larger implications for taxpayers and for the middlemen, known as pharmacy benefit managers.

Speaking about the suit in 2019, Ohio Attorney General Dave Yost said it would be far from the last shoe to drop against the companies, which do billions of dollars of business with the state each year.

“I get the question from time to time, ‘Are there any other shoes to drop?’ Baby, we’re in DSW,” Yost said, making a reference to the Designer Shoe Warehouse.

Three pharmacy benefit managers — OptumRx, CVS Caremark and Express Scripts — are estimated to control more than 70% of the PBM marketplace in the United States, which is worth hundreds of billions of dollars a year. Among their services, the companies reconcile claims, negotiate manufacturer rebates and reimburse pharmacies.

The PBMs say they use their heft and efficiency to save money for their customers. But their critics say they operate in a non-transparent, uncompetitive marketplace to extract outsized profits. 

A state-commissioned analysis determined that in 2017, CVS Caremark charged the Ohio Department of Medicaid almost a quarter-billion dollars more for drugs than they reimbursed pharmacists.

Officials across the country have watched subsequent developments in Ohio as officials have tried to address the issue.

Now the U.S. Supreme Court is deliberating in a PBM case out of Arkansas that Ohio signed onto. That case will determine whether states can regulate PBMs representing large-employer health plans or if that right is pre-empted by federal law.