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Governmental pressure on pharmacy benefit managers continues to escalate, this time with Ohio Attorney General Dave Yost (R) alleging that three major companies and a foreign group purchasing organization colluded to fix prescription drug prices and reap the rewards.
According to the lawsuit the attorney general filed Monday, Cigna subsidiary Express Scripts and Blue Cross and Blue Shield-affiliated Prime Therapeutics worked with Switzerland-based Ascent Health Services to raise the prices of drugs, including insulin.
Through Ascent Health Services, Express Scripts, Prime Therapeutics and Humana Pharmacy Solutions share drug pricing and rebate information and fix rebates and prices among themselves, Ohio alleges. Express Scripts founded Ascent Health Services in 2019, Prime Therapeutics is a minority owner and Humana Pharmacy Solutions is a client.
Ascent Health Services, Cigna and its Express Scripts and Evernorth Health subsidiaries, Prime Therapeutics, Humana and Humana Pharmacy Solutions are named as defendants. Prime Therapeutics declined to comment about ongoing litigation. The other companies did not immediately respond to requests for comment.
Express Scripts is one of the three leading PBMs along with CVS Health’s Caremark and UnitedHealth Group’s OptumRx, which together control more than 75% of the market. Yost claims in the lawsuit that Express Scripts leverages its market power to create a “pay to play” rebate system that encourages drug manufacturers to hike prices for better placement on formularies.
“The cost of Express Scripts’ supracompetitive profits have been pushed onto those with the least power—including individuals whose prescription costs are calculated at, or as a percentage of, those same rising list prices,” the lawsuit says. The document, filed in Delaware County Common Pleas Court, calls for the defendants to halt “secret and anticompetitive conduct” that contributes to escalating drug prices.
These actions allegedly caused the price of insulin to spike from about $20 per unit in the late 1990s to between $300 and $700 per unit in 2023, according to the lawsuit. President Joe Biden enacted a law last year capping insulin costs at $35 a month for Medicare beneficiaries, and major manufacturers Eli Lilly, Sanofi and Novo Nordisk subsequently adopted voluntary limits on prices for the diabetes medication.
Federal and state regulators increasingly are scrutinizing the activities of these so-called pharmaceutical market middlemen, including a slew of lawsuits from states that allege PBMs are fleecing Medicaid.
House Oversight and Accountability Committee Chair James Comer (R-Ky.) launched a probe this month into PBMs’ alleged anticompetitive practices. Comer is seeking information from CVS Caremark, OptumRx and Express Script. A Senate bill would ban PBM “clawbacks” from pharmacies and require companies to disclose spread-pricing schemes and pharmacy fees. The Federal Trade Commission also is conducting an investigation into the PBM industry’s effects on pharmaceutical prices.
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