Important information in a report that the Ohio Department of Medicaid commissioned this year now will remain secret well into next year.
It will remain secret past the time when the legislature will consider a budget, billions of dollars of which might go to CVS, and possibly past the time when a federal judge in Washington, D.C., will decide whether to approve CVS’s $70 billion merger with insurance giant Aetna.
The Medicaid department in July released a blockbuster report showing that CVS Caremark and another pharmacy benefit manager, OptumRx, were billing the state a quarter of a billion dollars more per year for Medicaid drugs than they were paying the pharmacists who dispensed them. However, the report was heavily redacted — including large blacked-out areas in which reimbursement rates to chain pharmacies that compete with CVS are listed.
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Whether CVS was playing fair with those competitors could have an impact on many multibillion-dollar decisions now in the works.
Pharmacy benefit managers act as middlemen, billing insurance companies, paying pharmacies and negotiating rebates with drug manufacturers. Ohio lawmakers, including Sen. Bill Coley, R-Cincinnati, have questioned whether CVS has used its business as PBM to four of Ohio’s five Medicaid managed-care plans to unfairly advantage its retail pharmacies over competitors.
Coley noted last week that the latest delay in the court fight over releasing the redacted information will push the matter past when Ohio’s next budget is approved in June. At the same time, U.S. District Judge Richard Leon has paused the CVS/Aetna merger while he considers whether antitrust concerns raised by the American Medical Association and other groups have been sufficiently weighed.
The Medicaid department and its legal representative, the Ohio attorney general, have been arguing since summer that the entire report, produced for the Medicaid department by HealthPlan Data Solutions, should be made public. But in July, CVS and OptumRX sued, arguing that the document contained proprietary information.
The case dragged into December, but Franklin County Common Pleas Judge Jenifer French postponed the hearing until April 29 — 10 months after the redacted report was released.
It took lawyers in the case until Dec. 7 to agree to a method of protecting the confidentiality of the redacted information in the report, and now witnesses must be interviewed, said Dan Tierney, spokesman for Attorney General Mike DeWine.
Asked about the delay, Ohio Medicaid spokesman Tom Betti said, “Our position has not changed. We want this information to be released.”
Perhaps undercutting the trade-secrets argument is that CVS and OptumRx asked to hide some — but not all — pharmacy reimbursement rates. Not blacked out were rows showing that CVS and OptumRx paid independent pharmacies more than they paid CVS pharmacies — a fact that CVS has made much of this year as independent pharmacies complained that CVS practices are putting them out of business.
CVS spokesman Michael DeAngelis was asked why only reimbursement rates to independent pharmacists were released. Does that mean CVS was paying competing chains less than it was its own pharmacies? He responded that reimbursements to independents already had been released when Ohio Medicaid released an initial summary of the report.
“We asked for the other information to be redacted, because the disclosure of our proprietary rates, formulas and negotiation strategy to lower the drug prices charged by pharmaceutical manufacturers would significantly impact our ability to negotiate the lowest rates and fees for our clients in a highly competitive market, which would ultimately cost the state and the taxpayers more,” DeAngelis said in an email.
Critics are skeptical.
“It’s an interesting juxtaposition to see CVS rushing at breakneck speed past judges and regulators to clear a $70 billion merger, but on the other end dragging their feet on releasing 30 pages worth of redactions,” said Antonio Ciaccia, spokesman for the Ohio Pharmacists Association. “Call me old-fashioned, but I think the public deserves to know how $2.6 billion (annual Ohio spending on Medicaid managed-care drugs) of their hard-earned taxpayer dollars are being spent.”