Nessel takes action against pharmacy benefit managers over anticompetitive practices

Michigan Attorney General Dana Nessel on Monday filed a lawsuit against two pharmacy benefit managers accusing the companies of engaging in anticompetitive conduct that crippled the state’s independent pharmacies and created pharmacy deserts within the state. 

The suit argues that two companies, Express Scripts Inc. and Prime Therapeutics LLC, made an unlawful agreement to suppress reimbursement rates to independent pharmacies. According to a statement from Nessel’s office, this allowed the companies to make excessive profits and contributed to the closure of pharmacies in Michigan and across the state. 

Pharmacy benefit managers act as intermediaries between insurance providers, drug manufacturers and pharmacies, negotiating discounts and rebates with manufacturers and reimbursing pharmacies for the prescriptions they fill on behalf of the insurance company.

In December 2019, Express Scripts and Prime Therapeutics allegedly entered into an agreement for Prime Therapeutics to adopt Express Scripts’ lower reimbursement rates in exchange for accessing Express Scripts’ buying power and pharmacy network while paying Express Scripts administrative fees. Pharmacies outside this network allegedly received less money for filling prescriptions to the degree that some pharmacies paid more to dispense medication than they were reimbursed. 

Nessel argues the two companies’ agreement contributed to the creation of pharmacy deserts in half of Detroit’s neighborhoods and numerous communities throughout northern Michigan. Her suit aims to terminate the agreement, among other remedies.

“Michigan residents should not have to drive 45 minutes, or sometimes even farther, to pick up the insulin, heart medication, or antibiotics they need,” Nessel said. “Yet the unlawful, anticompetitive agreement that the lawsuit alleges has handed these PBMs unprecedented control over which pharmacies receive medication, how quickly residents get their prescriptions, and how much they’re forced to pay — crippling small, independent pharmacies and restricting access to lifesaving medications in the process.” 

“With this lawsuit, we are putting an end to these harmful practices to ensure Michiganders have reliable, affordable access to the medications they depend on,” Nessel said.