AG Nessel Files Lawsuit Against Two Pharmacy Benefit Managers for Anticompetitive Practices

LANSING – Michigan Attorney General Dana Nessel has filed a lawsuit (PDF) against two pharmacy benefit managers (PBMs) — Express Scripts, Inc. and Prime Therapeutics LLC — for allegedly engaging in anticompetitive conduct that has crippled Michigan’s independent pharmacies, resulting in pharmacy deserts throughout the State that restrict patient access to lifesaving medications and increase the cost of obtaining prescription drugs. The lawsuit contends the two PBMs formed an unlawful agreement that suppressed reimbursement rates to independent pharmacies. This allegedly not only enabled the PBMs to make excessive profits but also contributed to the closure of pharmacies in Michigan, and across the nation.  

“Michigan residents should not have to drive 45 minutes, or sometimes even farther, to pick up the insulin, heart medication, or antibiotics they need,” Nessel said. “Yet the unlawful, anticompetitive agreement that the lawsuit alleges has handed these PBMs unprecedented control over which pharmacies receive medication, how quickly residents get their prescriptions, and how much they’re forced to pay — crippling small, independent pharmacies and restricting access to lifesaving medications in the process. With this lawsuit, we are putting an end to these harmful practices to ensure Michiganders have reliable, affordable access to the medications they depend on.”  

PBMs serve as intermediaries between insurance providers, drug manufacturers, and pharmacies. They are tasked with reducing the amount that insurers pay to pharmacies when individuals fill prescriptions. The lawsuit alleges that in December 2019, Express Scripts and Prime Therapeutics entered into an agreement for Prime Therapeutics to adopt Express Scripts’ lower reimbursement rates in exchange for accessing Express Scripts’ buying power and pharmacy network, all while paying Express Scripts administrative fees. As a result, independent pharmacies — those not part of the PBMs’ corporate families— allegedly receive less money for filling prescriptions. Sometimes, the reimbursements are so low that pharmacies allegedly pay more to dispense medications to patients than they get back from insurers.  

The Attorney General alleges that these arrangements contributed to the creation of pharmacy deserts in half of Detroit’s neighborhoods and numerous communities throughout northern Michigan.  

Attorney General Nessel argues these actions violate the Sherman Antitrust Act, the Michigan Antitrust Reform Act, as well as public nuisance laws. The lawsuit seeks to terminate the agreement between Express Scripts and Prime Therapeutics, among other remedies.