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Ohio AG sues pharmacy benefit managers over drug pricing practices

Article

‘Modern gangsters’ use ‘strong arm tactics’ that hurt patients and pharmacies, lawsuit says.

Ohio has become the latest government entity to oppose pharmacy benefit managers (PBMs) and their work with prescription drug prices.

Ohio AG sues pharmacy benefit managers over drug pricing practices

Dave Yost
Ohio Attorney General's Office

Ohio Attorney General Dave Yost filed a lawsuit against Express Scripts and Prime Therapeutics alleging they and other companies drive up drug prices that lead to higher costs for “patients who rely on lifesaving drugs such as insulin.”

“PBMs are modern gangsters,” Yost said in a news release announcing the lawsuit. “They were designed to protect and negotiate on behalf of employers and consumers after Big Pharma was criticized for overpricing medications, but instead they have absolutely destroyed transparency, scheming in the shadows to control drug prices on all sides of the market.”

Other defendants include Cigna Group, parent company of Express Scripts; Evernorth Health, another subsidiary of Cigna; and Humana, parent company of Humana Pharmacy Solutions.

The three largest PBMs – Express Scripts, CVS Caremark, and OptumRx – control about 77% of the drug market, while the next three largest control much of the rest. That market consolidation leads to collusion that in turn causes higher prices for patients and “nefarious PBM tactics” that strangle pharmacies, especially those that are independently owned, according to the attorney general’s lawsuit.

The lawsuit is the first in the nation to target PBMs specifically, not pharmacies or drug-makers who deal with their “strong-arm tactics,” Yost said.

The lawsuit alleges the PBMs’ unlawful arrangement “has harmed not only manufacturers and pharmacies but also employers and, in a far more insidious way, drug consumers,” Yost’s statement said.

Across the nation in 2022, Express Scripts controlled an estimated 88 million insureds, while CVS Caremark controlled 81.3 million and OptumRx controlled 40.1 million, according to the lawsuit. Express Scripts last fall announced it will add another 20 million insureds next year when it controls pharmacy benefits for managed care organization Centene Corp., the lawsuit said.

An estimated 1.1 million Ohioans are diabetics and hundreds of thousands rely on daily insulin injections as essential to survival. Express Scripts’ well-concealed scheme has fueled an astronomical increase in the price of insulin – from about $20 per unit in the late 1990s to between $300 and $700 per unit today, according to the attorney general’s office.

Yost’s complaint noted the recent announcements by state and federal lawmakers to control insulin prices, and pharmaceutical makers Eli Lilly and Co., Novo Nordisk, and Sanofi announcing they will cap out-of-pocket monthly insulin costs at $35 a month.

“These programs represent drastic efforts to limit the harms of systemic PBM abuses on patients’ reasonable access to necessary treatment,” the lawsuit said. The effects of the programs won’t be known for some time, Yost’s complaint said, and limiting patient costs for just one drug is “akin to putting a band-aid on a wound that is already infected.”

Express Scripts, Prime Therapeutics, and the other defendants had not filed their legal answers in court as of March 29. The lawsuit was filed in Delaware County, north of the city of Columbus, Ohio’s capital.

A spokeswoman for Prime Therapeutics emailed a statement to Medical Economics: “Prime is a minority owner of Ascent, which is a group purchasing organization that negotiates pharmaceutical relationships and savings opportunities for the purpose of improving affordability for members and plan sponsors across Prime’s client base, including Prime’s Blue Cross and Blue Shield owners.

“Prime does not comment on pending litigation.”

Last month, the Pharmaceutical Care Management Association (PCMA) launched an advertising campaign explaining “the critical value of America’s pharmacy benefit companies and proactive policy solutions the industry is supporting to lower prescription drug costs for patients.”

PCMA this year published data showing “The Independent Pharmacy Marketplace is Still Stable,” despite allegations of pricing problems, and a primer explaining how the prescription drug pricing system works.

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