Pharmacies Sue Over Drug Dealings  

CBS Broadcasting /AP
Birmingham, AL
Oct. 4, 2003

(AP) Two independent pharmacies have sued the nation's four biggest pharmacy benefit managers, alleging “anti-competitive practices” against small operators.

The lawsuits, filed over the past week in federal court in Alabama by attorney Archie Lamb, seek class-action status to represent all the nation's 25,000 independent pharmacies against Medco Health Solutions Inc., Caremark Rx Inc., AdvancePCS Inc. and Express Scripts Inc.

Pharmacy benefit managers act on behalf of employers and other large health-care payers to broker prescription discounts with drug manufacturers. They then contract with pharmacies to fill the prescription orders.

The lawsuits allege that the four used their status as middlemen to artificially fix prices and force “unconscionable” reimbursement rates on community pharmacies. They also allege secret deals with drug manufacturers to push prescriptions on doctors and pharmacies in return for kickbacks.

Spokesmen for the benefit managers said the lawsuits were without merit.

Medco Health spokesman Jeffrey Simek said Saturday that data from the retail pharmacy industry shows the number of retail pharmacies increased last year, as did the number of prescriptions they handled and their profitability. He said the pharmacies are saying the drug discounts they agree to with companies like Medco are too big.

“It's odd the premise of the lawsuit is that retail pharmacies would like to increase the cost of drugs even higher,” Simek said. Medco Health is based in Franklin Lakes, N.J.

Caremark, based in Birmingham, said the claims “fundamentally mischaracterize Caremark's business practices.”

“Caremark will vigorously defend itself against any such allegations,” Caremark spokesman Gerard Carney said in Saturday editions of The Tennessean of Nashville, where the company plans to move its headquarters.

Caremark last month announced plans to acquire AdvancePCS, based in Irving, Texas, in a $5 billion-plus deal that will make it the No. 2 pharmacy benefit manager after Medco. Telephone messages left Saturday with an AdvancePCS spokesman were not immediately returned.

Express Scripts spokesman Steve Littlejohn said the company does not comment on specific litigation, but he said the company's “mission is to make the use of drugs safer and much more affordable.”

“We don't recommend the use of higher-cost drugs. We promote lower-cost drugs,” Littlejohn said.

The plaintiffs in the lawsuit are North Jackson Pharmacy Inc. of Stevenson, Ala., and Big C Discount Drugs of Thomaston, Ga.

Lamb previously waged a legal fight against several health-maintenance organizations over doctors' reimbursement. Cigna Corp. and Aetna Inc. recently settled the lawsuits for just less than $200 million, but several other managed-care companies are fighting the charges.

© MMIII The Associated Press. All Rights Reserved.

©MMIV, CBS Broadcasting Inc. All Rights Reserved.