Ohio’s attorney general is seeking to claw back nearly $16 million in funds he says Optum overcharged a state agency for drugs.
In a letter (PDF) to OptumRx last week, AG Dave Yost says OptumRx, the company’s pharmacy benefit manager arm, failed to pass on discounts to the state’s Bureau of Workers’ Compensation on multiple occasions between 2015 and 2018, totaling $15.8 million in pharmacy overcharges.
Yost said in a statement that the PBMs deal with the bureau requires formal mediation before the state can sue—an option that he signaled is on the table.
“I hope that OptumRx will refund these overcharges,” Yost said. “I am investigating PBM practices on behalf of a number of state clients and will not hesitate to pursue overcharges and fraudulent conduct. This is an important first step in this process.”
Ohio officials, Yost in particular, have paid a close eye to PBMs operating in the state. As state auditor, Yost last summer issued a report that showed PBMs earned more than $223 million in revenues between April 2017 and March 2018 through spread pricing, or by charging Medicaid more than they were reimbursing to pharmacies.
Alongside the report, the state canceled its Medicaid contracts with Optum and CVS Caremark over the spread pricing concerns.
Other states, such as New York and Pennsylvania, have also investigated spread pricing.
In a statement to FierceHealthcare, an Optum spokesman said Yost’s claims are groundless but that it will work toward a resolution.
“We are honored to have delivered access to more affordable prescription medications for the Ohio Bureau of Workers’ Compensation and Ohio taxpayers,” he said. “We believe these allegations are without merit and are working with the state to resolve the Bureau’s concerns in accordance with the terms of our contract.”
PBMs have been under the microscope of late as policymakers and industry stakeholders work toward solutions to bring down rising drug prices. Their system for negotiating drug discounts has come under fire for being too opaque and as a main factor ratcheting up these costs.
To that end, the Trump administration has called for an end to the rebate system altogether, a move that could entirely upend the pharmaceutical supply chain.