News

Ohio’s Attorney General sues pharmacy benefits managers for conspiring to drive up costs

By: Karen Kasler | Statehouse News Bureau
Posted on: Tuesday, March 28, 2023

< < Back to ohios-attorney-general-sues-pharmacy-benefit-managers

COLUMBUS, Ohio (Statehouse News Bureau) — Ohio’s attorney general is suing pharmacy benefits managers, or PBMs, that work with health insurers and prescription drug makers to negotiate prices. AG Dave Yost said those companies have been illegally driving up drug costs, putting lower-income patients in danger and harming independent pharmacies.

“PBMs are modern gangsters,” Yost said in a news release about 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.”

The lawsuit filed in Delaware County Common Pleas Court says the pharmacy benefits managers Express Scripts and Prime Therapeutics shared pricing information through the group purchasing organization called Ascent, which Express Scripts formed to assume the company’s negotiations with drug makers after PBMs came under scrutiny in 2019. The suit says they also shared information with Ascent customer Humana Pharmacy Solutions. These companies are all named in the suit, along with Express Scripts’ parent company Cigna Group, the Cigna subsidiary Evernorth Health, and Humana, the parent company of Humana Pharmacy Solutions.

“That’s just wrong. It’s anticompetitive. It’s against the law. That’s what our lawsuit is about,” Yost said in a prepared statement.

Yost said in the suit that pharmacy benefits managers consolidation has helped create the situation, with the three largest PBMs controlling 75% of the drug market. Those three include Express Scripts.

Yost said the lawsuit is different from lawsuits filed by his office and other attorneys general because it targets PBMs and not pharmacies or drug makers that he said are being manipulated by them.

For instance, Yost said insulin was $20 in the late 1990s and is now as much as $700 because of Express Scripts’ scheme. Yost said that’s a huge hit for the 1.1 million Ohioans with diabetes.

And Yost said independent pharmacies have been forced to accept smaller drug reimbursement rates and pay big “administrative” fees. Yost said that if Kroger, the nation’s largest grocer, can’t make money working with Express Scripts, the impact is even worse for small, independent pharmacies.

No comment from the companies named in the suit.