Pharmacy Benefit Managers (PBMs)
Date Filed: March 17, 2003
Court: California Superior Court
Location: Los Angeles

Hagens Berman, on behalf of The Prescription Access Litigation (PAL) project and the American Federation of State, County, and Municipal Employees (AFSCME), AFL-CIO, today announced that they have filed suit against the nation’s four largest pharmacy benefit managers (PBMs) for inflating prescription drug prices. The four companies, Advance PCS, Express Scripts, MedCo Health Solutions, and Caremark Rx., control more than two-thirds of the PBM market.

The lawsuit, filed in California, charges that through a pattern of illegal, secret dealings with drug companies the PBMs force health plans and health care consumers to pay inflated prescription drug prices. The lawsuit also alleges that the four drug benefit managers have reaped billions of dollars in illegal profits by steering health insurers and health care consumers into reliance on more costly drugs. It also contends that the four PBMs have negotiated rebates from drug manufacturers and discounts from retail pharmacies but haven’t passed those savings on to health plans and consumers. Instead they’ve used those savings to illegally increase their own profits.