US states step up antitrust assault on pharmacy benefit managers
Florida and Louisiana have filed lawsuits accusing Express Scripts, the pharmacy benefit manager owned by Cigna (CI), of colluding with rival Prime Therapeutics to drive down the rates paid to independent pharmacies, adding to a growing wave of state legal action against the powerful drug-pricing intermediaries.
The Florida attorney general's office filed its complaint in late August, alleging that Express Scripts and Prime, which is privately held, engaged in illegal price-fixing dating back to December 2019. According to the suit, the resulting below-cost reimbursements for most branded and generic drugs forced many Florida pharmacies to fill prescriptions at a loss, threatening their ability to stay in business.
The complaint sets out the commercial dynamics at the heart of the case. PBMs compete to become the exclusive benefit manager for health plan sponsors, and in turn seek to attract pharmacies into their networks by pointing to the number of patients they cover and the reimbursement rates they offer. Those rates determine whether a pharmacy makes or loses money on each prescription.
As one of the industry's "Big 3", Express Scripts allegedly used the leverage of its roughly 100mn covered lives to secure lower reimbursement rates than smaller rivals such as Prime could obtain. To compete for pharmacies, Prime had offered more generous terms.
That changed, Florida alleges, when the two companies announced a "new three-year collaboration" on December 19, 2019, under which Express Scripts would provide services relating to Prime's retail pharmacy network and manufacturer contracts from April 2020. The state contends the arrangement was in reality a horizontal price-fixing agreement that brought Prime's rates into line with those of Express Scripts.
Prime allegedly valued the first three years of the deal at $2.5bn in "cost reductions" extracted from pharmacies, sharing part of the savings with Express Scripts. The complaint says the arrangement remains in force. Before the agreement, Prime's reimbursement rates to independent pharmacies were about 20 percent higher than those of Express Scripts; afterwards they fell to roughly 80 percent of prior levels for branded drugs and 70 percent for generics, according to the filing.
Florida alleges a per se violation of state antitrust law and unfair competition under its deceptive trade practices statute, and is seeking injunctive relief, civil penalties, disgorgement and damages.
Louisiana followed on August 31 with a similar suit against Express Scripts and its affiliate Ascent Health Services, alleging that they unlawfully fixed reimbursement rates to independent pharmacies, including through the agreement with Prime.
The cases add to a mounting list of state actions against the sector. Michigan sued Express Scripts and Prime in April 2025 over an alleged conspiracy to suppress independent pharmacy reimbursements. In January this year, Iowa sued 18 PBMs and insulin makers over alleged manipulation of insulin prices, while Missouri targeted 19 PBMs and drugmakers over a similar scheme. Oregon, also in January, sued Express Scripts, CVS Health's (CVS) Caremark and UnitedHealth's (UNH) Optum, along with drug manufacturers, seeking $900mn over alleged coordinated price inflation. Vermont sued Cigna's Evernorth unit and Caremark in July 2024, accusing them of deceptively inflating prescription drug costs.
Should the states prevail, PBMs are likely to be ordered to pay independent pharmacies more appropriate reimbursements. The rulings could also bolster claims by pharmacies themselves seeking redress and further damages for years of artificially low rates.