Ohio and Oklahoma tackle PBMs

NCPA April 14, 2023

Dear Colleague,

Doug Hoey Geographically, Ohio and Oklahoma are almost 1,000 miles apart, but in addition to the first letter of their name they have some things in common. For instance, they can (and do) boast about 16 national college football title banners (eight by Ohio State University, seven by the University of Oklahoma and one by Oklahoma State University). And in both, state officials are fed up being bullied by their PBM vendors and have taken aggressive action to protect their citizens — and the taxes they pay.

Ohio's Attorney General David Yost was the first to strike. He filed a lawsuit against Express Scripts and Prime Therapeutics — two "separate" companies that just happen to behave in parallel without ever having to undergo the scrutiny of an FTC merger. But Yost's lawsuit wasn't about the "non-merger merger" between the two companies.

He called out Cigna-ESI for forming an off-shore group purchasing organization in Switzerland called Ascent that he says conspired to illegally increase drug prices. Soon after Cigna-ESI formed Ascent, Prime (surprise!) joined as an owner.

Below are excerpts from Yost's 60-page complaint. Check out the full complaint here.

"In May, 2019, it (ESI) launched Ascent, a GPO that it hoped would shield the Rebate system from being upended by looming government action. In order to further shield its activities, portions of Ascent's operations were moved to Switzerland. In addition to sheltering Express Scripts from the possible fallout from possible PBM reform in Congress, Ascent served as another middleman inserted into the already complicated drug distribution process.

"Like the importation of kudzu to stop soil erosion, the creation of the PBM was a solution that has become the problem.

". . .the scariest words in the pharmaceutical industry have become, 'I'm the PBM and I'm here to help.'"


The attorney general of the seventh most populous state in the country just compared PBMs to kudzu! NCPA has often compared PBM business practices to the mafia, but invasive creeping ivy was a new one. Oh wait, Yost also said "PBMs are modern gangsters." Check out the full statement here.

Several hundred miles away, Oklahoma Insurance Commissioner Glen Mulready reached his limit with CVS-Aetna's PBM, Caremark, sending propaganda to employers and citizens in the state. "I am extremely frustrated with the misinformation and confusion presented to Oklahoma consumers," he said.

In Oklahoma, it's illegal to incentivize patients to fill their prescriptions through mail order rather than their choice of pharmacy. Aetna-CVS/Caremark has been communicating to employers and employees that state law won't allow their mail-order house to fill 90-day prescriptions. It's not true.

The state's insurance department had just entered into a settlement agreement with Aetna-CVS/Caremark in 2022 requiring a $4.8 million payment to settle other violations. A little over a year later, Mulready must have been thinking, "Here we go again with the folks from Rhode Island," because the Oklahoma insurance commissioner's action could be a K-O for Aetna-CVS/Caremark operating in the state. Mulready's filing targets the practice of steering patients to CVS pharmacies and prescription mail-order services and seeks to censure, suspend, place on probation, or revoke the pharmacy benefit manager (PBM) license of CVS/Caremark.

Make sure you catch that. The Oklahoma insurance commissioner is telling Aetna-CVS/Caremark not to let the door hit them on the way out of his state if they continue not to follow state laws.

For many years, NCPA has worked with the National Association of Insurance Commissioners on a white paper about the role of PBM's in the prescription drug supply chain and has been in contact with numerous AGs to educate them about PBM business tactics detrimental to patients and competition. NCPA also has a link for pharmacies to use to submit complaints to your state insurance commissioner.

Both Yost and Mulready are taking gutsy actions. But they're not alone. All across the country, lawmakers and regulators are scrutinizing the PBM/Insurance cartel and taking actions that would have been impossible only a few years ago. The landmark Rutledge v PCMA Supreme Court decision, which NCPA was proud to support in partnership with the Arkansas Pharmacists Association and other allies, blasted a hole in the previously impenetrable legal fortress behind which the PBMs were hiding. Now they're apoplectic over elected officials having the nerve to actually protect taxpayers and enforce their state laws. If the past is prologue, they will be digging deep into their bag of tricks to try to stop these elected officials from doing their jobs. But the reality is that we need the AGs and insurance commissioners in 48 other states to stiffen their resolve and to follow Yost and Mulready's lead.


Doug Hoey

B. Douglas Hoey, Pharmacist, MBA

P.S. NCPA's Legislative Fly-In is April 26-27. Come to D.C. and tell your elected officials about the kudzu taking over your business. Register here.