Ohio Medicaid Will Require PBMs to Use Transparent ‘Pass-Through’ Pricing

Ohio will require pharmacy benefit managers (PBM) contracting with its Medicaid program to end their current “spread pricing” arrangements and shift to a more transparent pricing model on Jan. 1.

In an Aug. 14 letter to the plan managers, Ohio Medicaid Director Barbara Sears said a pass-through model would allow regulators and all market participants to “see exactly what is paid out for all pharmacy transactions.”

Administrative fees paid by plans to PBMs aren’t currently separated out but the pass-through model requires them to be transparent. Ohio Medicaid contracted with HealthPlan Data Solutions to study the PBM pricing models and HDS estimated the additional costs of administrative fees can be offset in other areas.

“Ohio Medicaid’s intent is to ensure that the change to a pass-through model is cost-neutral to Ohio taxpayers,” Sears said.