Pharmacies Sue Over Drug Dealings
CBS Broadcasting /AP
Oct. 4, 2003
(AP) Two independent pharmacies have sued the
nation's four biggest pharmacy benefit managers, alleging
anti-competitive practices against small operators.
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.
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.
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
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
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
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.