PBMs on the Hot Seat in Key Legal and Administrative Battles
In a not-so-strange turn of events, pharmacy benefits managers (PBMs) are under scrutiny for alleged legal and administrative violations in states with robust PBM reform. Additionally, the United States Senate Committee on Finance gathered insight from experts at an official hearing on PBM reform. Although the legal disputes and senate hearing are seemingly unrelated, together they offer optimism that PBM conduct will continue to be questioned in state and federal spotlights.
Ohio Attorney General Sues Multiple PBMs for Anticompetitive Practices
The Ohio Attorney General has filed a lawsuit against Express Scripts, Prime Therapeutics, and Humana Pharmacy Solutions, among other subsidiary and parent entities. The filing alleges that the three largest PBMs (Caremark, Express Scripts, and OptumRx) which control more than 75% of market share use mutually owned group purchasing organizations (GPOs) to collude on drug rebate negotiations. This produces a monopolistic environment which may benefit PBMs and harm patients by inflating drug list prices. Ohio’s Valentine Act prohibits such practices and is punishable by fines and banishment from doing business in Ohio.
CVS Caremark Faces Administrative Action in Oklahoma for Steering Practices
The Oklahoma Insurance Department, an agency responsible for PBM oversight, has filed administrative action against CVS Caremark for allegedly violating the Oklahoma Patient Right to Pharmacy Choice Act. The notice of hearing outlines over 100 instances where Caremark misinformed patients regarding their right to use an in-network pharmacy of their choice for 90-day drug supplies. Caremark coerced patients to use pharmacies they owned by rejecting drug claims and then telling patients via phone that they must use CVS or their mail-order pharmacies. Furthermore, upon initial warning by authorities, Caremark sent letters to patients falsely stating that they could no longer obtain 90-day drug supplies due to action by the Oklahoma government.
U.S. Senate Hearing on PBMs and the Drug Supply Chain
The U.S. Senate Committee on Finance heard from a panel of economists, business experts, and law experts to gather insights into the need for federal PBM reform. Throughout the hearing, Senate members demonstrated thorough understanding of the harms of PBMs by asking questions about rebate aggregation, increasing drug list prices, vertical integration within the healthcare system, and direct and indirect remuneration fees. Senate members called for more transparency in PBM practices and continued efforts to regulate the PBM industry. Watch the recording here.
- Consider writing to your elected officials to recommend legislative action for PBM reform
- Find your members of the U.S. Congress here
- Refer to your state government website and/or use the interactive map on Congress.gov tool for information on local elected officials
- Consider involvement in your state or national pharmacy organizations to assist them with legislative efforts
- If you are within a state with PBM oversight laws, consider reviewing applicable law to ensure you are aware of your, and your patients’, rights and file complaints as applicable