Gov. DeWine vetoes measure that would have been ‘suicide' for Ohio pharmacies
Ohio pharmacists were worried that a measure inserted into the state budget would cause mass closures. Gov. Mike DeWine on Monday vetoed it, saying that lawmakers in the Ohio House and Senate asked him to.
In his veto message, DeWine acknowledged that Ohio pharmacies are closing rapidly, and said he and Lt. Gov. Jim Tressel will keep working on the problem.
Last year, Ohio lost 215 pharmacies and the total number dropped below 2,000 for the first time in memory, according to an online tracker launched by the Ohio Board of Pharmacy. Pharmacy owners have long complained that huge pharmacy middlemen with conflicted interests have used a non-transparent system to underpay them and drive them out of business.
In response, legislation was introduced in the Ohio House earlier this year that would require the middlemen to reimburse pharmacies for drugs based on a public database compiled by the federal government.
That would only allow pharmacies to break even on drugs. So the legislation also required the middlemen to pay a $10 per-prescription dispensing fee to cover pharmacies' overhead such as payroll, rent, taxes, and insurance. It's based on a statewide survey regularly conducted among pharmacies.
Then the Ohio Chamber of Commerce got involved, telling state senators that the dispensing fees were a tax and that they should oppose them. The chamber made that claim even though the Ohio Department of Medicaid in 2022 adopted a similar system and saved $140 million in the process.
Despite requests, the Ohio Chamber hasn't disclosed how much money it gets from the middlemen, known as pharmacy benefit managers, or PBMs. The company that owns the biggest PBM, CVS Health, was a 'presenting sponsor' of the Chamber's 2024 Healthcare Summit, and an executive with the company delivered a keynote speech.
The Ohio Senate attempted a compromise between the House legislation and the Ohio Chamber's demand for no dispensing fees. It would have required PBMs to reimburse pharmacies in a transparent system, but it would have eliminated minimum dispensing fees.
The Ohio Pharmacists Association said that would be much worse for pharmacies than the current, inadequate setup. Pharmacies could only break even on their drugs, and they couldn't recoup their overhead, they said.
'It's any pharmacist's suicide bill,' Dave Burke, the organization's executive director, said last week.
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In vetoing it, DeWine agreed.
'This item was intended to strike a compromise between interested parties on how to best regulate the practice of pharmacy benefit managers in Ohio and the requirements for fair and transparent reimbursement for Ohio pharmacies,' the governor's veto message said. 'However, due to drafting errors, the language will not achieve the legislative intent of providing the needed oversight of pharmacy benefit manager practices. Subsequently, the language as written, may result in further detriment to Ohio pharmacies, especially those in small, rural communities, and could result in a reduction in health care access for many Ohioans.'
The message explained that those who wrote the legislation into the state budget asked that it be pulled back.
'Due to the errors in drafting final language, the Ohio House of Representatives and Ohio Senate have requested this veto,' DeWine's veto message said. 'Therefore, a veto of this item is in the public interest.'
In an interview Tuesday, Burke said he didn't think there was any ill intent on the part his former colleagues in the Ohio Senate.
'I think people are getting misinformation from the PBMs, who are trying to maintain their foothold and prevent a free and transparent market,' he said.
Burke also said he didn't believe the Ohio Chamber was selling out its Ohio membership in favor of out-of-state, Fortune 15 health conglomerates that own the big-three PBMs.
'I don't think the Ohio Chamber is anti-pharmacy,' said Burke, who is himself a pharmacist. 'I think they just don't understand how their benefits are actually being administered.'
But he added that every business in Ohio has an interest in a healthy network of pharmacies.
'I don't know what they're going to do when their employees can't get their prescription drugs where they live,' Burke said. 'That's happening now in real time. We have pharmacy deserts and they're getting worse every year.'
Denise Conway, who in 2019 restored pharmacy services in Danville, said the veto is far from enough to solve the problems besetting Ohio pharmacies.
'It is a slight win for pharmacies across Ohio and I am grateful for the governor's vision to see that things aren't being addressed,' she said in a text message Tuesday.
In his veto message, DeWine said more needs to be done.
'It is important to note that the DeWine-Tressel Administration is committed to further reforms of pharmacy benefit managers, as already demonstrated in improvements made in Ohio's Medicaid program through the adoption of the Single Pharmacy Benefit Manager,' it said, referring to the measure that saved taxpayers $140 million. 'This administration is committed to working with the Ohio General Assembly in the future to deliver a pharmacy-benefit-manager regulatory bill.'
Burke said that he might be partly to blame for the PBM-aligned position taken by the Ohio Chamber.
'I have to think, knowing (Senior Vice President) Rick Carfagna and (President and CEO) Steve Stivers, that they're not ignorant and they're not bought and paid for,' Burke said. 'They're intelligent people. Maybe it's my fault for not stopping by and sitting down with them.'
He added that he's ready to work with the Ohio Chamber or anybody else to shore up Ohio's dwindling network of pharmacies.
'We're in a bad place,' Burke said. The Ohio Pharmacists Association 'definitely has an open hand and an open mind for anyone who's willing to work with us on this issue. But we are running out of time.'
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