*Attached video: Diabetes medication shortage
COLUMBUS, Ohio (WCMH) — Ohio Attorney General David Yost has filed a lawsuit against multiple pharmacy benefit management companies accused of illegally pushing up prices of drugs including insulin.
The companies, which include one based in Switzerland, have held control of a majority of the drug market thanks to industry consolidation. Yost named the following as defendants in his lawsuit, filed Monday in Delaware County Common Pleas Court:
- Ascent Health Services LLC
- Express Scripts, Inc.
- Cigna Group, the parent company of Express
- Evernorth Health, Inc., a subsidiary of Cigna
- Prime Therapeutics LLC
- Humana Pharmacy Solutions, Inc.
- Humana Inc., the parent company of the same name
Yost focused primarily on Express Scripts, characterizing it as the ringleader of the group. These types of pharmacy benefit management companies were created as a response to fight inflated “Big Pharma” drug prices but have grown to host their own problems, according to the attorney general.
“PBMs were introduced to negotiate drug prices on behalf of payors, or ‘Plan Sponsors,’ such as employers, and the individuals receiving the medications, the ‘insured,'” Yost wrote in his lawsuit. “This intermediary system worked until PBMs grew powerful enough to themselves extract exorbitant fees.”
Express Scripts is one of the three biggest PBMs, controlling 75% of the prescription drug market. That breaks down to a sizable presence in Ohio as well, according to the lawsuit.
“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 wrote.
In 2019, Yost said Express Scripts went beyond a near monopoly to also plan with its competitors to raise medication prices as a group. It formed a separate “group purchasing organization” called Ascent Health Services, which was supposed to take over Express Scripts’ pricing and rebate negotiations with drug manufacturers.
Express then invited a competing PBM, Prime Therapeutics, to take ownership in Ascent. Yost said the two PBMs’ stakes in that company allowed them to share pricing, discount and rebate information with each other, as well as Ascent’s client, Humana Pharmacy Solutions. Ascent then relocated from St. Louis, Mo. to Switzerland, which Yost said was a move to further conceal the pricing and rebate scheme.
The three companies were able to cohesively raise prices thanks to Ascent’s role as a middleman. Yost wrote. His office directly blamed Express Scripts’ price-fixing scheme for fueling the rise in cost of insulin — which 1.1 million diabetic Ohioans need — from $20 per unit in the 1990s to between $300 and $700 in 2023.
Yost’s lawsuit claimed the seven defendants violated the Valentine Act, Ohio’s antitrust law. In particular, it outlawed price fixing, controlled sales and agreements that restrain trade or hurt competition. His office asked for a Delaware County Common Pleas judge to fine all seven companies $500 each for every day that their scheme was active, and also sought an order for each to disgorge all ill-gotten profits from the trade conspiracy.
To read the lawsuit complaint filed by Yost’s office, click here.