Ohio Attorney General Sues Pharmacy Benefit Managers Due to Collusion

On Monday, March 27, 2023, Ohio Attorney General Dave Yost sued pharmacy benefit managers (PBMs) from multiple organizations for collusion on drug prices. The lawsuit names numerous defendants, including Ascent Health Services, Express Scripts, Cigna Group, Evernorth Health Prime Therapeutics, Humana Pharmacy Solutions, and its parent company, Humana.

“PBMs are modern gangsters,” Yost said in a press release. “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 report compares PBMs to using kudzu to stop soil erosion, noting that although they were intended as a solution for employers and consumers, PBMs have become a big problem in medication access. PBMs have been criticized time and time again for driving up medication costs, putting an undue burden on patients.

The press release from the attorney general’s office notes that companies like Express Scripts drive manufacturers to raise drug prices by using a “pay-to-play” model. The system is designed to give preferred placement to companies with high list prices. This model allows PBMs to trick patients into thinking they are getting a significant discount.

In the meantime, PBMs also lowball insurers with decreased reimbursement rates significantly lower than what they pay for the drugs. Additionally, the insurers are charged high administrative fees, leading to minimal savings that employers or patients rarely see.

According to the release, Express Scripts and the two other leading suppliers of PBMs control three-quarters of the drug market, making them key players in drug pricing negotiations. The antitrust lawsuit accuses organizations of sharing pricing data to negotiate with government agencies and employers.

The complaint filed states that the defendants listed violated the Valentine Act. The press release notes that the Valentine Act is “Ohio’s antitrust law, which prohibits price fixing, controlled sales and other agreements that restrain trade and hurt competition. The Valentine Act is broader than its federal corollary, the Sherman Act, in that the Ohio law prohibits market harms, in addition to consumer harms.”

Although the organizations in question have not responded to these allegations, healthcare professionals will continue to monitor the case and its conclusions.