Ohio Attorney General, Dave Yost, has filed a lawsuit against two pharmacy benefit managers (PBMs), accusing the companies of using an overseas company that illegally drove up drug prices for life-saving drugs such as insulin and passed the costs onto consumers.
The lawsuit, filed March 27, claims that Express Scripts and Prime Therapeutics colluded with a little-known company in Switzerland to consolidate the PBM industry, in which three of the largest PBMs control more than 75% of the drug market, the Ohio AG’s office stated in a press release.
Yost’s lawsuit alleges that Express Scripts markets its leverage to negotiate drug prices from drug manufacturers as a boon to health insurers and employers, but that “is knowingly false,” the lawsuit reads.
The lawsuit alleges that because of the business tactics employed by the PBMs, the cost of insulin has soared from approximately $20 per unit in the 1990s to upwards of $700 per unit today.
Instead, Yost alleges that Express Scripts’ dominance has resulted in the PBM’s huge financial gain, which has come to fruition by creating "a complex 'pay to play' rebate system that, perversely, pushes manufacturers to increase drug prices in order to be placed on, or receive, preferred placement on PBM formularies."
The savings that PBMs claim from the inflated list prices are a ruse, Yost suggested.
As a result of Express Scripts’ business tactics as well as other leading PBMs, smaller pharmacies, including independent pharmacies have been “strangled,” Yost’s lawsuit stated, adding, “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 profits from the market.”
In 2019, despite mounting criticism of its monopolistic business practices, Express Scripts formed Ascent Health Services, ostensibly to control Express Scripts’ pricing and rebate negotiations with drug manufacturers. Later that same year, Express Scripts offered a competing PBM, Prime Therapeutics, ownership in the newly-formed Ascent. Express Scripts relocated Ascent’s headquarters from St. Louis, MO to Switzerland. AG Yost says the move was made to conceal Express Scripts’ “ongoing pricing and rebate scheme.”
Express Scripts, Prime Therapeutics, Ascent and Humana are all named as defendants in AG Yost’s lawsuit, as well as the parent company of Express Scripts, Cigna Group, and another subsidiary of Cigna, Evernorth Health.