Suit Targets PBM’s Relationship To Drug Firms

Two New York labor unions are suing Express Scripts Inc., a pharmacy benefits management (PBM) company, charging the company with receiving kickbacks from drug manufacturers to recommend higher-priced drugs and with keeping rebates instead of passing them back to health plans.

The suit, which was reported by the Associated Press in the January 12 Sun-Sentinel.com, the Web site of the South Florida Sun Sentinel, was filed December 31, 2003, in the state Supreme Court in New York City by the Organization of New York State Management/Confidential Employees and United University Professions, which represent state workers.

Steve Littlejohn, spokesperson for Express Scripts, is reported to have declined to comment on the suit but to have noted that the company has complied with the terms of its contract by providing lower-cost prescription drugs to its members.

In March 2003 the Prescription Access Litigation (PAL) project and the American Federation of State, County, and Municipal Employees filed suit against four PBMs, including Express Scripts. They charged “fraudulent conduct” because the defendants allegedly “prevented government-funded or -maintained health plans and consumers from knowing what the actual rebates, spread, and other payments were” (Psychiatric News, April 18, 2003).

At the time a spokesperson for Express Scripts said, “Express Scripts enables each client receiving rebate (manufacturer discount) revenue to audit its rebate revenue. . . . [The company] has been phasing out manufacturer funding for drug-specific education programs. . . . [T]he payments will be completely phased out by October 1, 2003.”

A PAL spokesperson said that the March suit was at the “pretrial motion” stage.

“Drug Manager Sued Over Rebates, Prices” is posted at www.sun-sentinel.com/news/nationworld/ats-ap_health13jan12,0,672958.story?coll=sns-apt. ▪