173-71-07 Base price.

(A) Any entity that provides services as a PBM relative to the outpatient drug coverage included in a health benefit plan offered to the employees or retirees of a state agency or political subdivision, and the eligible dependents of those employees or retirees, shall provide drug-pricing verification services under section 173.742 of the Revised Code and manufacturer-payment verification services under section 173.814 of the Revised Code, if the entity is selected under section 173.731 of the Revised Code by ODA to serve as the consulting PBM for purposes of providing the verification services.

(1) Both of the following shall apply to the entity selected to serve as the consulting PBM:

(a) The entity shall provide the drug-pricing verification services and manufacturer-payment verification services without charge, either to the best Rx program or to the state agency or political subdivision for which it provides services as a PBM; and,

(b) The entity shall provide the verification services for the entire year for which it is selected to serve as the consulting PBM, regardless of the duration or termination of its responsibility to the state agency or political subdivision for which it provides services as a PBM.

(2) If the entity selected to serve as the consulting PBM fails to provide the program with drug-pricing verification services or manufacturer-payment verification services, or fails to provide for an audit when requested to do so under section 173.732 of the Revised Code, ODA may ask the attorney general to bring an action for injunctive relief in any court of competent jurisdiction. On the filing of an appropriate petition in the court, the court shall conduct a hearing on the petition. If it is demonstrated in the proceedings that the PBM has failed to provide the verification services or has failed to provide for the audit, the court shall grant a temporary or permanent injunction enjoining the PBM from continuing to fail to provide the verification services or from continuing to fail to provide for the audit.

(3) Paragraph (A) of this rule does not impose any duty on the state agency or political subdivision for which an entity provides services as a PBM.

(B) Annually, ODA shall select a PBM from among the PBMs subject to section 173.73 of the Revised Code to serve as the consulting PBM for purposes of providing drug-pricing verification services under section 173.742 of the Revised Code and manufacturer-payment verification services under section 173.814 of the Revised Code.

(1) ODA shall select the PBM that ODA considers to be the most appropriate PBM to provide the verification services for the best Rx program. In making the selection, the ODA shall consider the PBM that provides services relative to the outpatient drug coverage included in the health benefit plan offered to the greatest number of employees or retirees of a state agency or political subdivision and the eligible dependents of those employees or retirees.

(2) ODA shall provide written notice to the PBM that it has been selected to serve as the consulting PBM. The notice shall specify the date on which the PBM is to begin serving as the consulting PBM for the ensuing year.

(3) Before the end of the one-year period during which a PBM is to serve as the consulting PBM, ODA shall make another selection in accordance with section 173.731 of the Revised Code. In making the selection, ODA may select the same PBM to serve as the consulting PBM or may select another PBM.

(C) To determine whether the consulting PBM has provided valid information when providing drug-pricing verification services under section 173.742 of the Revised Code or manufacturer-payment verification services under section 173.814 of the Revised Code, ODA may request that the consulting PBM provide for an audit of its relevant contracts with drug manufacturers and pharmacies.

In making audit requests under this paragraph, both of the following apply:

(1) ODA may request such an audit on a regular basis, but not more frequently than once every three years.

(2) ODA may request an audit at any time it has a reasonable basis to believe that the consulting PBM is not acting in good faith in providing drug-pricing verification services or manufacturer-payment verification services. ODA shall notify the consulting PBM of the request for an audit in a written document that is signed by the director of ODA. The notice may specify the basis for the belief that the consulting PBM is not acting in good faith. If the basis for the belief is not specified and the audit findings demonstrate that the consulting PBM acted in good faith, ODA shall pay the cost incurred by the consulting PBM in providing for the audit.

(D) ODA shall choose an auditor to perform the audit of the consulting PBM that is mutually satisfactory to ODA and the consulting PBM and that is independent of both ODA and the consulting PBM.

(E) If the findings of an audit of the consulting PBM demonstrate that the verification services provided by the consulting PBM did not result in valid information, ODA shall use the audit findings for purposes of confirming the validity of the one or more drug-pricing formulas designated under section 173.741 of the Revised Code and entering into manufacturer agreements.

(F) Annually, ODA shall establish a base price for each drug included in the best Rx program in accordance with section 173.74 of the Revised Code. In the case of drugs dispensed by a participating pharmacy, ODA shall establish the base price for each drug by using the one or more formulas designated under paragraph (G) of this rule. In the case of drugs dispensed by the drug mail-order system, ODA shall also establish the base price by using one or more formulas designated under paragraph (C) of this rule.

(G) Annually, the ODA shall designate one or more formulas for use in establishing under section 173.74 of the Revised Code the best Rx program’s base price for drugs dispensed by a participating pharmacy. Each formula shall include a drug-pricing discount component that is expressed as a percentage discount. The formula used for generic drugs may include the maximum allowable cost limits that apply to generic drugs under the medicaid program.

(H) In designating the one or more formulas, ODA shall use the best information on drug pricing that is available to ODA, including information obtained through the drug-pricing verification services provided under section 173.742 of the Revised Code by the consulting PBM. Based on the available information, at least annually, ODA shall modify one or more formulas as it considers appropriate to maximize the benefits provided to participants, in accordance with section 173.741 of the Revised Code. As used in this paragraph “best information” includes, but is not limited to, drug-pricing information obtained from an industry-recognized drug-pricing compendium that is updated at least weekly.

(I) For purposes of section 173.741 of the Revised Code, ODA shall obtain verification of drug-pricing information from the consulting PBM in accordance with the following procedures:

(1) For brand name drugs, excluding generic drugs marketed under brand names, ODA shall submit to the consulting PBM the formula ODA proposes to use to establish the program’s base price for brand name drugs during the year.

The consulting PBM shall review the formula submitted by ODA. In conducting the review, the consulting PBM shall compare the drug-pricing discount percentage included in ODA’s formula to the drug-pricing discount percentage included in the formula most commonly used by the consulting PBM to establish part of its payment rate for brand name drugs dispensed by pharmacies other than drug mail-order systems. If the formulas are not expressed in equivalent terms, the consulting PBM shall make all accommodations necessary to make the comparison of the discount percentages.

After conducting the review, the consulting PBM shall provide information to ODA verifying whether the discount percentage included in the ODA’s formula is more than two percentage points below the discount percentage included in the formula used by the consulting PBM. An officer of the consulting PBM shall certify the information by signature before providing it to ODA.

(2) For generic drugs, ODA shall identify the fifty generic drugs most frequently purchased by participants in the immediately preceding year from participating pharmacies but not the drug mail-order system. ODA shall submit to the consulting PBM the names of the fifty drugs, the number of prescriptions filled for each of the drugs, the formula used to compute the base price for the drugs during the year, and the weighted average base price for the drugs that resulted for the year.

The consulting PBM shall review the submitted information. In conducting the review, the consulting PBM shall compare ODA’s weighted average base price to the equivalent part of the consulting PBM’s weighted average payment rate for the same drugs when dispensed by pharmacies other than drug mail-order systems. For purposes of the comparison, ODA and the consulting PBM shall express the weighted average base price and payment rate in terms of a discount percentage that is taken from the drugs’ average wholesale price, as identified by a national drug price reporting service selected by ODA and the consulting PBM.

After conducting the review, the consulting PBM shall provide information to ODA verifying whether the discount percentage reflected in the ODA’s weighted average base price for the drugs is more than two percentage points below the equivalent part of the consulting PBM’s weighted average payment rate for the same drugs. An officer of the consulting PBM shall certify the information by signature before providing it to ODA.

Replaces: pt 5101:13-1-03

Effective: 10/04/2007

R.C. 119.032 review dates: 08/31/2011

Promulgated Under: 119.03

Statutory Authority: 173.02, 173.83

Rule Amplifies: 173.73, 173.731, 173.732, 173.74, 173.741, 173.742

Prior Effective Dates: 11/1/2004, 4/4/07 (Emer.), 7/5/07 (Emer.)