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Ohio, other states attempting to reign in drug costs

In an effort to reign in drug costs, more states are are trying to regulate middlemen who play a crucial role by managing drug benefits for employers and insurers, while taking payments from drug companies in return for giving preferential treatment to their drugs (Source: “States Rush to Rein In Prescription Costs, and Drug Companies Fight Back,” New York Times, Aug. 18, 2018).

The bipartisan efforts by states come as President Trump and his administration put pressure on drug companies to freeze prices and reduce out-of-pocket costs for consumers struggling to pay for drugs that often cost thousands of dollars a month.

Twenty-four states have passed 37 bills this year to curb rising prescription drug costs, according to Trish Riley, the executive director of the National Academy for State Health Policy, a nonpartisan forum of policymakers, and several state legislatures are still in session.

In Ohio, Medicaid officials announced this past week that they had a new way to pay for prescription drugs. Pharmacy benefit managers will no longer be allowed to keep any of the payments they receive from drug manufacturers. The money must be passed on to Medicaid health plans and used for the benefit of Medicaid recipients, starting Jan. 1.

Ohio officials said they wanted to know whether the benefit managers had been overcharging the state, but were frustrated in trying to obtain drug pricing information.