Baird investigation finds Ohio, like many buyers, paying too much for drugs

In a research note titled “Major Confusion: Does This Pass Your Sniff Test?,” Baird analyst Eric Coldwell details the interplay between Cardinal Health’s (CAH) generic marketing company Major Pharmaceuticals and CVS Health (CVS) in Ohio. In Major’s catalog is Omeprazole, a generic version of Prilosec, which is available without a subscription. CVS Caremark, which had majority share of pharmacy benefit management services in Ohio, didn’t use Maximum Allowable Cost for the product, which led to the state of Ohio paying $6.74 per tablet, or 19 times the amount somebody without a subscription can buy it, Coldwell tells investors in a research note, citing his own investigation. Meanwhile, over the course of five quarters in Ohio, Major’s volume market share went from less than 2% to nearly 60% while dollar market share went from 12% to 95%, adds the analyst. He asks, “How does this happen?” The state of Ohio, “like so many other buyers, feels like it is paying too much for drugs,” concludes Coldwell.

https://thefly.com/landingPageNews.php?id=2873879