Vermont AG Sues Pharmacy Benefit Managers Over Drug Prices

Vermont’s Attorney General Charity Clark filed a lawsuit on Wednesday against two of the largest U.S. pharmacy benefit managers (PBMs), alleging that they have been inflating prescription drug prices for their own financial gain. The suit, filed in Washington County Superior Court, targets CVS Health’s Caremark and Cigna Group’s Express Scripts, along with some of their affiliates.

Clark, a Democrat, contends that these PBMs have been steering patients towards more expensive medications even when cheaper alternatives were available, using an opaque fee system to pocket the difference. This practice, she argues, violates Vermont’s consumer protection laws. Clark is seeking a court order to halt these practices and is also demanding unspecified damages.

CVS spokesperson Mike DeAngelis responded to the lawsuit by asserting that PBMs actually help reduce drug prices by negotiating with manufacturers. He dismissed the lawsuit as “baseless” and stated that CVS intends to “vigorously defend” itself against the allegations.

Related: FTC Set to Sue Major Pharmacy-Benefit Managers Over Drug Pricing Practices

Caremark, Express Scripts, and UnitedHealth Group’s OptumRx dominate the PBM market, collectively controlling about 80% of it. PBMs play a crucial role in negotiating prices with drugmakers, health insurance plans, and pharmacies. They also determine which medications are included on insurance formularies, which are lists of covered drugs.

Recently, PBMs have come under increased scrutiny. The U.S. Federal Trade Commission is reportedly planning to sue the three major PBMs for their role in negotiating insulin prices. DeAngelis contends that PBMs have contributed to lowering these prices, despite the criticism.

This lawsuit aligns Vermont with other states that have also taken legal action against PBMs, highlighting a growing trend of legal and regulatory challenges facing the drug industry intermediaries.

Source: Reuters