Florida sues PBMs over alleged pharmacy price-fixing scheme

Florida's attorney general has filed suit against pharmacy benefit managers Express Scripts, a unit of Cigna (CI), and Prime Therapeutics, accusing the rival drug middlemen of engaging in illegal price-fixing that has gutted reimbursements to the state's pharmacies and threatened patient access to medications.

The lawsuit, filed last week in Florida's circuit court by Attorney General James Uthmeier, alleges that a 2019 service agreement between the two competing PBMs — under which Prime adopted Express Scripts' lower pharmacy reimbursement rates — constitutes horizontal price-fixing in violation of the Florida Antitrust Act and the Florida Deceptive and Unfair Trade Practices Act. Uthmeier is seeking to unwind the arrangement, along with civil penalties and additional damages.

PBMs serve as influential intermediaries in the drug supply chain, contracting with health insurers to manage pharmacy benefits and setting the rates at which pharmacies are reimbursed for dispensing medications. Express Scripts, the larger of the two companies, covers roughly one in three Americans, giving it sufficient market power to impose lower reimbursement rates on pharmacies that cannot afford to be excluded from its network. Prime, a smaller rival, had historically been compelled to offer reimbursement rates averaging around 20 per cent higher than the largest PBMs in order to remain competitive.

That dynamic shifted in 2019 when Express Scripts agreed to handle retail pharmacy networking and drugmaker contracting on Prime's behalf, enabling Prime to align its reimbursement rates with the lower Express Scripts benchmarks — with both companies sharing in the resulting savings. The complaint alleges that reimbursement rates on some drugs fell by as much as 80 per cent for certain Florida pharmacies, converting previously profitable prescriptions into loss-making ones overnight.

"Dispensing at a loss puts downward pressure on the pharmacies' margins and may contribute to the ability of the pharmacy to continue to serve customers — or even continue to exist at all," the filing states.

Prime rejected the allegations, arguing that lower pharmacy costs ultimately benefit patients. "The Attorney General's complaint focuses on pharmacy profits but overlooks the impact that higher pharmacy costs have on the patients, employers, health plans and taxpayers who ultimately pay for prescription drugs," a spokesperson said. Express Scripts did not respond to a request for comment.

The Florida action is the latest in a series of legal challenges targeting the arrangement. In 2023, a group of independent pharmacies filed a class action against the two PBMs in Wisconsin, though that case was voluntarily dismissed. Last month, nearly 5,000 independent pharmacies filed a fresh suit making substantially similar allegations.