A collection of independent pharmacies was the next in line to file suits against major pharmacy benefit managers for alleged drug price fixing.
On Monday, Old Baltimore Pike Apothecary and Smith’s Pharmacy II filed a class action lawsuit directed at 4 pharmacy benefit managers (PBMs) and GoodRx for their roles in manipulating prescription drug prices. In line with what most PBM opposers have relayed throughout the past few years, the plaintiffs argued that PBMs’ drug price fixing agreements have resulted in declining reimbursements, pharmacy shutdowns, and ultimately a decrease in the delivery of valued care for patients nationwide.
“Independent pharmacies are the backbone of our communities, providing essential health care services to millions of Americans,” said Greg Asciolla, chair of DiCello Levitt’s Antitrust and Competition Litigation Practice Group partnering with the plaintiffs.1 “GoodRx and these PBMs—4 of the largest in the United States—have not only hurt small businesses but also the patients who rely on them for their medications. We aim to hold them accountable for the considerable harm caused by their sophisticated price-fixing scheme.”
The 4 PBMs included in the suit are CVS Caremark, Express Scripts, MedImpact Healthcare, and Navitus Health Solutions. These companies, and other PBMs aligned with major health care and pharmacy brands, have come under recent scrutiny because of their existence as “prescription drug middlemen,” dealing with pharmacies, insurers, and manufacturers to establish drug prices and access.
In this case particularly, Old Baltimore Pike Apothecary and Smith’s Pharmacy II came together to establish a lawsuit of their own. Old Baltimore Pike Apothecary is based in Pennsylvania and Smith’s Pharmacy II is in Providence, Rhode Island. This is the third PBM-directed lawsuit in the past 2 weeks after Minnesota-based Keaveny Drug and Michigan-based Community Care Pharmacy filed lawsuits last week.2
The 5 companies included in the suit are GoodRx, CVS Caremark, Express Scripts, MedImpact Healthcare, and Navitus Health Solutions. | image credit: visoot / stock.adobe.com
READ MORE: Texas Sues Multiple PBMs, Drug Manufacturers Over Inflated Insulin Prices
“The lawsuit claims that the defendants’ actions have harmed independent pharmacies and reduced competition in the market. The plaintiffs argue that the defendants’ price-fixing agreements have led to the closure of many independent pharmacies and negatively impacted the quality of care provided to patients,” read the DiCello Levitt news release.1
PBMs like CVS Caremark and Express Scripts have been usual suspects in recent litigation attempting to hold these middlemen accountable. However, according to the conditions of the pharmacies’ recent lawsuits, GoodRx has emerged as a key party responsible for PBM-exacerbated issues within the industry.
“The 3 lawsuits allege that, starting last year, the PBMs and GoodRx entered into agreements in which the PBMs would use GoodRx's software to compare all available discounts for all patients' generic drug prescriptions, and route each purchase through the PBM with the lowest price—even if it was different than the patient's PBM,” wrote Brendan Pierson for Reuters.2
Similar to most PBM complaints in recent history, the lawsuit claims that GoodRx and the PBMs required pharmacies to pay full price for medications plus a fee. That fee would be split between the PBM filling the prescription and the patient’s PBM. These transactions resulted in increased profits for the affiliated PBMs and decreased reimbursements for pharmacies. Because of the way PBMs have taken control of prescription drug benefits, smaller pharmacies are now struggling to keep up as they barely receive reimbursements for the full price of the drugs they dispense.
Finally, as previously mentioned, Old Baltimore Pike Apothecary and Smith’s Pharmacy II’s filing is not the first to call PBM practices into question. The Federal Trade Commission (FTC) opened an investigation into the 6 largest PBMs—CVS Caremark, Express Scripts, OptumRx, Humana Pharmacy Solutions, Prime Therapeutics, and MedImpact Healthcare Systems—in 2022 and released its first report earlier this year.3
The FTC found that CVS Caremark, Express Scripts, and OptumRx control 79% of the prescription drug benefits market, using tactics like vertical integration, unfair contracting, and patient steering to decrease competition and increase PBM profits. Furthermore, CVS Caremark, Express Scripts, and MedImpact Healthcare were also included in the Old Baltimore Pike Apothecary and Smith’s Pharmacy II filing, showing that many of these large PBMs are in the spotlight and are facing immense legal pressure.
Whether it’s the FTC, an independent pharmacy, or a state’s attorney general, several parties within the industry are now fighting to hold these prescription drug middlemen accountable. With the end goal of lowering prescription drug costs and making health care more accessible, legislation is the main vehicle for driving change within the industry.
“The plaintiffs seek to represent all pharmacies in the United States that dispensed generic pharmaceuticals to members of the PBM defendants during the relevant periods. They are seeking treble damages, attorneys’ fees, costs, and injunctive relief to end the defendants’ anticompetitive practices,” concluded the DiCello Levitt news release.1
READ MORE: Pharmacy Benefit Managers: The Silent Squeeze on Independent Pharmacies in America
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