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Reimbursing Independent Pharmacies Fairly in Ohio

December 21, 2018 | Pharmacy

Recent reporting in Ohio has presented a skewed view of reimbursement rates to independent pharmacies in the state. At CVS Caremark, there has been no intent to “price gouge” or “take advantage of the spread model,” as was suggested in recently published articles in the Columbus Dispatch. Despite multiple appeals to the newspaper for balanced reporting, there has been a lack of pertinent information or context related to PBMs in their stories. Their characterization of our business as “shenanigans,” could not be further from the truth.


Important facts about pharmacy reimbursement rates in our CVS Caremark pharmacy network:

  • As part of our efforts to help keep costs down, CVS Caremark regularly monitors independent pricing sources available in the marketplace to help determine any changes to a drug’s acquisition cost, and adjust our pharmacy reimbursement rates accordingly. As drug prices fluctuate this becomes increasingly important to ensure pharmacies are buying at the most competitive price.
  • When we make reimbursement rate adjustments, we consider the overall impact on pharmacies by market. We do recognize that an individual pharmacy may be impacted disproportionately depending on their drug mix and client base. And, we have an appeals process that is always available to pharmacies during which they can bring these cases to our attention.
  • It is also part of our responsibility as a PBM to balance the need to fairly compensate the pharmacies in our network while providing a cost-effective benefit to our clients – in this case Ohio Medicaid managed care organizations.
  • CVS Caremark reimburses independent pharmacies at a higher rate than chains, including CVS Pharmacy, and pharmacy reimbursements have actually gone up on more than 1,800 drugs this year alone.

After a recent routine reimbursement adjustment in Ohio, concerns were brought to our attention about a disproportionate impact on some pharmacies in the state. As a result, we reviewed pharmacy level data and determined that because of the mix of drugs being dispensed at certain pharmacies in Ohio, there was in fact a disproportionate impact on their generic reimbursement.

To address this, CVS Caremark increased the reimbursement rate in Ohio within the generic basket of drugs, effective November 8, 2018. Despite making these reimbursement changes as promised for all independents in the CVS Caremark network that provide pharmacy services to Ohio Medicaid members, the Columbus Dispatch, in its November 14th coverage, erroneously reported on our response to the pricing concerns.

Despite the inflammatory rhetoric you are hearing, CVS Health remains committed to providing value to the taxpayers of Ohio and ensuring that our pharmacy network partners are reimbursed fairly and adequately based on market conditions. We will continue to monitor cost changes in the marketplace, and make appropriate adjustments to pharmacy reimbursements when warranted in order to continue providing a cost-effective pharmacy benefit to our clients, which includes Ohio’s Medicaid MCOs.