Public officials continue to turn up the heat on pharmacy benefit managers. Less than a week after a U.S. Senate committee approved PBM reform legislation, the Ohio Attorney General has sued Express Scripts and Prime Therapeutics, alleging that the companies conspired to illegally increase drug prices.
“PBMs are modern gangsters,” Attorney General David Yost said. “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.”
The lawsuit alleges that Express Scripts, one of the country’s three largest PBMs, responded to criticism of its model by forming the group purchasing organization Ascent Health Services in 2019. It then granted Prime Therapeutics ownership in Ascent before moving its operations to Switzerland, which allowed it to further obfuscate its pricing models. The lawsuit also names Cigna Group, parent company of Express Scripts; Evernorth Health, another subsidiary of Cigna; Humana Pharmacy Solutions; Humana, parent company of Humana Pharmacy Solutions; and Ascent.
Express Scripts and Prime Therapeutics then used their shared stake in Ascent to share pricing, discount and rebate information with one another as well as with Humana Pharmacy Solutions, an Ascent customer, which drove up prices further, according to the lawsuit.
“Both drug buyers and sellers have little choice but to play the game by the PBMs’ rules, allowing PBMs to extract both monopoly profits from individuals and monopsony (a market situation where there is only one buyer) profits from the market,” Yost said.
Related: PBMs face scrutiny as House committee opens investigationThe suit alleges multiple violations of the Valentine Act, Ohio’s antitrust law, which prohibits price fixing, controlled sales and other agreements that restrain trade and hurt competition. The act is broader than its federal counterpart, the Sherman Act, in that the Ohio law prohibits market harms in addition to consumer harms. The lawsuit seeks seeks statutory fines and restitution of any illegals profits.
Yost has been a vocal critic of PBMs and the models they deploy to manage drug spending, particularly rebates and spread pricing. He has filed multiple lawsuits against different PBMs, making this week’s filing just the latest salvo in a lengthy war.
PBMs have been intensely scrutinized in the debate over who is at fault for rising drug costs, and pharmaceutical manufacturers typically blame PBMs for driving up expenses. In addition to congressional action, the Federal Trade Commission subpoenaed six of the largest PBMs – CVS Caremark; Express Scripts, OptumRx, Humana, Prime Therapeutics and MedImpact Healthcare Systems – last year.