For the first time in our existence, CMS has released drug pricing data that overlaps with the date of our launch. As we ripped open the data and examined CMS’ gift, we found some major changes in the way that the state of Ohio reported their data – and it has revealed some eye-opening information about PBM and pharmacy margins on prescription drugs. Given all the drug pricing noise out of Ohio, and the federal heat on PBM “spread pricing,” we decided to do a deep dive into what’s happening in Ohio, and how its new data provides incredible clues to determine where the money flows within the drug supply chain.
It is well-known that competition in the generic manufacturer marketplace drives drug prices down considerably. Plaquenil, a brand-name drug that has been on the market since 1955, eventually saw generics enter the market almost a quarter of a century ago. By all accounts, generic Plaquenil – known as hydroxychloroquine – had become a very affordable drug at approximately 10 cents per pill. But FDA actions quickly dried up the supply of the drug, causing prices to balloon more than 2,500%. This report examines how state Medicaid programs were impacted by this price spike, and how some states continued paying elevated rates even after the price came crashing back down.