Independent Pharmacists Sue Pharmacy Benefit Managers for Illegal Business Practices

Two independent pharmacies recently filed lawsuits against the four largest US Pharmacy Benefits Managers (PBMs) alleging illegal business practices aimed at driving small pharmacies out of business. PBMs are companies established to control the costs of prescription drug coverage by purchasing pharmaceuticals at bulk discounts for employers and other heath care payors.   The PBMs named as defendants in the four separate lawsuits, Medco Health Solutions Inc., Express Scripts Inc., Caremark Rx, and AdvancePCS, are collectively responsible for the drug benefits of approximately 210 million Americans. The lawsuits filed in the U.S. District Court in the Northern District of Alabama charge the PBMs with abusive business practices including:  

• accepting "kickbacks", such as rebates, discounts or other incentives from drug manufacturers for placing their products on PBM formularies and for promoting their products to physicians and pharmacists;
• price-fixing and artificially depressing the prescription prices paid to pharmacists;
• imposing additional costs on independent pharmacies for using PBM services; and
• diverting health plan members to mail order pharmacies owned by PBMs.

Currently, only two pharmacies are named as plaintiffs in the suit.   However, the lawyer representing the plaintiffs hopes that additional parties will join the lawsuit to achieve class-action status. For more information, visit: http://www.bizjournals.com/birmingham/stories/2003/09/29/daily34.html; http://biz.yahoo.com/rc/031003/health_lawsuits_2.html; and http://makeashorterlink.com/?Q62512F46. Summary by:   Nicholas Wong