Independent Pharmacies Sue Major Pbm Over Illegal Price Discrimination And Below Cost Reimbursements
Pharmacies Allege OptumRx Knowingly Paid Them Less Than Large Retail Chain Pharmacies
PHILADELPHIA, PA (May 1, 2020) – — The newest litigation against a major pharmacy benefit manager comes from a most likely source: their small business victims. Unwilling to tolerate the low reimbursements which threaten to drive them out of business, more than 50 independent pharmacies have sued pharmacy benefit manager (PBM) OptumRx, a division of UnitedHealth Group, charging the company violated state laws governing pharmacy claims reimbursement.
The lawsuit alleges that OptumRx ignored state legal requirements, unlawfully paid local pharmacies substantially less than it paid large chain retail pharmacies like CVS or Walgreens and far below what the company paid its own mail order pharmacy for the same prescriptions. The lawsuit further alleges that in many cases OptumRx knowingly reimbursed local pharmacies below their wholesale cost to acquire generic prescription drugs necessary for their patients.
PBMs administer the prescription drug portion of health insurance and self-insured plans, acting as a middleman between the insurance plan and the pharmacist. Over the last 20 years these companies have accumulated immense, unregulated power – the three largest PBMs controlling up to 80% of the healthcare market – and have utilized that power to increase prescription drug costs, decrease competition and restrict patient choice.
The PBM practice of below cost reimbursements to independent pharmacies is likely one reason why OptumRx is the most profitable component of UnitedHealth Group; the world’s largest health insurance company, with over $225 billion in annual revenues.
Plaintiffs involved in the lawsuit allege that:
- PBMs dictate reimbursements without notice or negotiation, and the dictated rates are often grossly unrelated to the pharmacies’ actual wholesale costs to acquire the drugs for their patients.
- Optum charges health care plans brand prices while paying pharmacies the lower generic price for each prescription. Thus, the pharmacies allege the company is arbitraging prescriptions merely by changing their classification.
- Optum built a wall of secrecy around its conduct by forcing network pharmacies into confidentiality agreements that conceal the truth about Optum’s business practices – specifically how much Optum is paid by insurance plans for prescriptions, how much Optum receives in rebates from drug manufacturers, and how little Optum pays to pharmacies who actually deal with patients and dispense the drugs.
The survival of independent pharmacies in America’s healthcare system is seriously threatened by the unethical, predatory business practices of PBMs. The lawsuit brought forth by this group of small-business pharmacies seeks to break this wall of secrecy and hold Optum accountable.
The pharmacies are represented by Mark Cuker and Neal Jacobs of the Jacobs Law Group, which represents over 400 pharmacies in lawsuits pending in Federal Court in Pennsylvania. For more information about the lawsuit, contact Mark Cuker at (215) 531-8512.
Filed under: General Problems
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