The deluge of legal action against pharmacy benefit managers continued Wednesday, with Vermont Attorney General Charity Clark filing a lawsuit claiming that PBMs are behind an illegal effort to drive up drug costs in the state. Vermont claims the pharma middlemen are violating the Consumer Protection Act by manipulating the market.
The lawsuit includes more than two dozen defendants, most of which are subsidiaries of PBM powerhouses CVS Health and Cigna-owned Express Scripts. The lawsuit does not include Optum Rx, the other major PBM owned by UnitedHealth Group, noting that the two named in the complaint control about 95% of the PBM market in Vermont.
The suit argues that PBMs have too much control over the distribution of drugs in the state and are limiting access.
“Through their interconnected roles as PBMs and pharmacies, the PBMs are driving up drug prices and foreclosing patients’ access to life-sustaining treatments in order to increase their profits,” the lawsuit contends.
The attorney general specifically took issue with exclusionary formularies, where PBMs exclude one or more drugs to treat a certain condition. A 2020 report from AmerisourceBergen found that CVS Caremark was the first to institute formulary exclusions in 2011, followed by Express Scripts and Optum Rx. By the time the report was published, formulary exclusions had grown “to exclude nearly a thousand prescription medicines across the 3 PBM formularies.”
Vermont’s case says that threatening exclusion has been a leveraging tool that PBMs have used to ratchet up rebates that drug manufacturers have to pay to access the formularies. As a result, drugmakers have raised prices to maintain profit margins, according to the lawsuit.
“While the pharmacy benefit managers named in our lawsuit claim they perform their services on behalf of their clients and patients to lower prescription drug prices and promote patient health, that is just not true,” Clark said in a statement.
A week ago, a federal judge tossed out a similar lawsuit from Hawaii, siding with PBMs who asked the case to be dismissed due in part because they don’t directly serve consumers. The court has since denied the state AG’s request to refile an unredacted complaint under seal, with a publicly available version expected on July 29.