Anthem Files Lawsuit Against Express Scripts Over Drug Pricing Dispute
Anthem claims that they are overpaying for pharmaceuticals, despite the availability of rebates that Express Scripts negotiated with pharmaceutical companies.
March 23, 2016 | by Sarah Massey, M.Sc.
On Monday, health insurance company Anthem Inc. filed a lawsuit against their pharmacy benefit manager, Express Scripts, to reportedly recover damages due to pharmaceutical pricing and operations issues. Anthem claims that they are overpaying for pharmaceuticals, despite the availability of rebates that Express Scripts negotiated with pharmaceutical companies.
As such, Anthem may be looking for a way out of its contract with the pharmacy benefit manager. Express Scripts is currently responsible for overseeing drug benefits for 80 million people.
“Under the agreement, Express Scripts is obligated to negotiate in good faith to ensure Anthem is receiving competitive benchmark pricing,” said Anthem. “Anthem has worked hard for more than a year to try to get Express Scripts to engage in such good faith negotiations, but Express Scripts has refused to do so.”
In January, Anthem’s CEO Joseph Swedish said the company was entitled to over $3 billion in rebates, based on their estimates of how much they are currently overpaying for prescription drugs. Though Express Scripts is the US’s largest pharmacy benefit manager, Anthem could be willing to drop them before their contract runs out in 2019.
“Express Scripts values its relationship with Anthem and will continue to honor its commitments under the contract, as we would do with any client,” said Jennifer Luddy, a spokesperson for Express Scripts. “Express Scripts has consistently acted in good faith and in accordance with the terms of its agreement with Anthem. We believe that Anthem’s lawsuit is without merit.”
Chief Medical Officer of Express Scripts Steve Miller, has been very outspoken about the discounts his organization is able to negotiate with drugmakers. The pharmacy benefit manager has even gone so far as to refuse to cover some brand-name medications, instead offering patients alternatives made by companies that have given Express Scripts a better deal.
According to a report released by the pharmacy benefit manager, the cost of brand-name prescription pharmaceuticals has jumped by 164 percent since 2008. In the same period, the price of generics has plummeted by 70 percent.
Anthem’s former pharmacy benefit manager was sold to Express Scripts in 2009, with the condition that insurer would use the company’s services for a 10 year period. Under the terms of the contract, the companies should have renegotiated drug prices in December of 2015.
Keywords: Drug Pricing, Health Insurance, Pharmacy Benefit Manager
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