Ohio Attorney General Dave Yost filed a lawsuit against several pharmacy benefit management firms on the grounds that they have erroneously raised the cost of medications like insulin.
Yost claims that the companies, one of which is based in Switzerland, have maintained dominance over most of the pharmaceutical market due to industry consolidation. Yost named Ascent Health Services LLC, Express Scripts Inc., Cigna Group, Evernorth Health Inc., Prime Therapeutics LLC, Humana Pharmacy Solutions Inc., and Humana Inc. as defendants in the lawsuit. Yost filed the lawsuit on Monday in the Delaware County Common Pleas Court.
According to Yost, these pharmacy benefit managers (PBM) have destroyed transparency while planning behind closed doors to regulate medicine prices on all market sides.
“PBMs are modern gangsters. 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,” Yost said.
Yost noted that Express Scripts is one of the three biggest PBMs, holding 75 percent of the prescription drug industry. The lawsuit claims that this also translates into a sizable presence in Ohio.
“For nearly 40 percent of the Ohioans covered by commercial insurance, Express Scripts effectively controls which drugs will be covered by insurance and what portion of the price of those drugs will be covered, as well as how much the pharmacies that fill those prescriptions will be reimbursed for doing so,” Yost said.
According to Yost, in the case of Express Scripts, the company made matters worse by creating the “group purchasing organization” Ascent Health Services in 2019 to take over the company’s price and rebate negotiations with pharmaceutical manufacturers in response to growing public criticism of PBMs.
To hide its ongoing pricing and rebate scheme further, Express Scripts offered Prime Therapeutics, a rival, ownership in Ascent later that year. The company moved Ascent’s operations from St. Louis to Switzerland.
Yost’s lawsuit argues Express Scripts and Prime Therapeutics have used Ascent to share pricing, discount, and rebate information with one other, and with Humana Pharmacy Solutions, an Ascent customer driving prescription prices up even higher.
The lawsuit alleges numerous violations of Ohio’s antitrust law, the Valentine Act, which forbids price fixing, controlled sales, and other agreements restricting trade and harming competition. In that the Ohio statute forbids market harms in addition to consumer harms, the Valentine Act is more expansive than its federal counterpart, the Sherman Act.
Yost claims that the defendants’ illegal arrangement has harmed manufacturers, pharmacies, employers, and drug consumers.
“Medications shouldn’t cost an arm and a leg, metaphorically or literally. Insulin is just a symptom of the problem; PBMs are the disease. The defendants have harmed not just markets and pocketbooks, but Ohioans’ health and lives,” Yost said.
Yost says he intends the lawsuit to stop the defendants “secret and anti-competitive conduct and strong-arm tactics that have prevented free-market forces from ensuring that Ohio’s most vulnerable citizens can afford the prescription drugs on which their lives depend.”
His agency requested for a Delaware County Common Pleas judge to fine all seven corporations $500 apiece for every day that their plan was operational and also sought an order for each to disgorge all ill-gotten proceeds from the trading conspiracy.
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Hannah Poling is a lead reporter at The Ohio Star and The Star News Network. Follow Hannah on Twitter @HannahPoling1. Email tips to [email protected]
Photo “Dave Yost” by Dave Yost Attorney General. Background Photo “Courtroom” by Carol M. Highsmith.
