DAVID GREENE, HOST:
All right. We've been reporting on how state Medicaid programs are struggling to keep up with rising prescription drug costs. States spend more than $30 billion a year on medications for the poor and disabled. Now, some states are taking aim at the companies that manage prescription drug plans and who claim to keep prices low. NPR's Alison Kodjak reports that some states, like Ohio, are finding these companies may be doing just the opposite.
ALISON KODJAK, BYLINE: So Ohio Medicaid paid two companies $2.5 billion for prescription drugs. Those companies - CVS Health and Optum - paid pharmacies just $2.3 billion for the same medications. And they pocketed the remaining 224 million, which was about 8.8 percent of Medicaid's total prescription drug spending. So the question Ohio officials are asking - is that too much to pay a middleman to manage the state's prescription drug plan? I asked Antonio Ciaccia, who's a lobbyist for the Ohio Pharmacists Association.
ANTONIO CIACCIA: I would love to tell you that 8.8 percent is too high, too low or normal, but I'm really unqualified to say that because our state Medicaid program is the first state in the country to really get this level of transparency into how this works.
KODJAK: But he does have an opinion...
CIACCIA: I think 8.8 percent is insane.
KODJAK: ...And so do several officials in Ohio. The attorney general and the state auditor are both investigating. Ohio Medicaid wants to release a detailed report on the program, but CVS Health and Optum went to court to block the release, saying the report contains trade secrets. If the analysis is released, it'll offer an unprecedented window into the opaque world of drug pricing.
STACIE DUSETZINA: I think that Ohio's going to have an uphill battle when it comes to releasing this information. It's going to be fought very hard by CVS because I think it would set a standard for transparency and providing the public with this information.
KODJAK: That's Stacie Dusetzina, a professor of health policy at Vanderbilt University School of Medicine. She says efforts in other states to reveal drug pricing secrets have failed. CVS declined to speak on tape for this story. In a written statement, the company pointed out that the summary of the state's report that was made public concluded that using companies like CVS Health saved $145 million overall.
Still, Ohio isn't alone in questioning the value of the middleman. West Virginia last year stopped using pharmacy benefit managers altogether, and Kentucky is also doing an analysis of its costs. In Iowa, State Representative John Forbes, who's also a pharmacist, launched his own investigation a few months ago after hearing complaints.
JOHN FORBES: We went through the records for this county over about a three-month period and found that, in many cases, pharmacies were being paid $5 to $10 for prescriptions, but the county entity was being billed over a hundred dollars for those same prescription medications.
KODJAK: Forbes says the oversight committee in Iowa's legislature now plans to investigate as well. Alison Kodjak, NPR News.
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