Arkansas pharmacies sue Express Scripts over alleged drug underpayments

A group of independent pharmacies in Arkansas has sued Express Scripts, the Cigna (CI) unit that is among the largest pharmacy benefit managers in the US, alleging it underpaid for tens of thousands of prescriptions.

The complaint, filed in Missouri circuit court, seeks hundreds of millions of dollars in damages. Lawyers for the 12 plaintiffs say it is the first suit brought under a state law passed last year that lets Arkansas pharmacies pursue PBMs that reimburse them below the cost of acquiring a drug.

Express Scripts said it was "committed to reimbursing pharmacies at competitive rates" and would defend itself against the allegations.

Arkansas law bars PBMs from paying pharmacies less than the National Average Drug Acquisition Cost, a benchmark maintained by the federal government. The plaintiffs argue that the figure, along with the drug, quantity and fill date data needed to price a claim correctly, is readily available to Express Scripts. Yet it still pays well below NADAC, they allege, leaving pharmacies to absorb the shortfall or spend time and money appealing improper payments.

The pharmacies point to recurring patterns across drugs, plans and dates as evidence that the underpayments are the deliberate product of the system Express Scripts uses to adjudicate claims, rather than isolated errors. "Express Scripts' failure to comply with Arkansas law is not a technological challenge; it is a business decision," the complaint says.

The suit follows years of complaints about chronic underpayment. Arkansas issued bulletins clarifying the rules in 2021 and in 2024 sought per-prescription penalties from violators, Express Scripts among them. Last year its legislature went further, allowing pharmacies to sue PBMs directly and recover statutory damages of up to $10,000 per violation, among other remedies.

The law took effect last summer. The plaintiffs estimate that Express Scripts has since underpaid roughly 48,300 prescriptions between August 2025 and the end of March 2026, a figure they say is probably conservative given their limited visibility into adjudication data. They are seeking a trial to establish the scale of the shortfall and the damages owed.

Even small gaps matter, the complaint argues. "Whether a given shortfall is a few cents or many dollars, the statutory command is the same," it says, adding that repeated thousands of times, the shortfalls drain the cash pharmacies need to stock insulin, antibiotics, cancer drugs and other medicines.

PBMs sit at the heart of the US drug supply chain, deciding which medicines appear on insurers' formularies, negotiating rebates with manufacturers and reimbursing pharmacies for dispensing to plan members. About 70 operate in the US, but the market is highly concentrated: Express Scripts, CVS Health's (CVS) Caremark and UnitedHealth's (UNH) Optum Rx together control 80 per cent of prescriptions.

That concentration is a mounting concern because the three sit within conglomerates that also run specialty pharmacies competing with independents for the same revenue. Research from the Federal Trade Commission found the "Big Three" favor their affiliated pharmacies with better rates and push rivals into unfavorable contracts. The PBMs deny this.

In the absence of comprehensive federal rules, states have moved to regulate PBM conduct and protect local pharmacies. Arkansas has been among the most aggressive, passing the first law in the US to forbid PBMs from owning pharmacies in the state.