Ohio lawsuit puts PBM GPOs in the spotlight

NCPA March 27, 2023

On Monday, Ohio Attorney General Dave Yost filed a lawsuit against Cigna/Express Scripts, Prime Therapeutics, and Ascent. In the complaint, Yost accuses pharmacy benefit managers Express Scripts and Prime Therapeutics of colluding with Ascent, based in Switzerland, to illegally drive up drug prices which resulted in higher out-of-pocket costs for patients. Additionally, the state of Ohio argues, “PBMs also use their market power to hurt competing pharmacies, and particularly independent pharmacies.”

Ascent is one of the new contracting entities, or group purchasing organizations, that Cigna/Express Scripts has added to their vertically integrated corporate structure, adding another layer of confusion and deception to drug pricing. The three largest PBMs (Caremark, Optum, and ESI) have all created their own contracting entities or GPOs. Two of these entities are located in Ireland and Switzerland. Many believe these GPOs are corporate shells created for the purpose of hiding the actual amount of rebates PBMs receive from pharmaceutical manufacturers.

In addition to Cigna, ESI and Prime, Evernorth Health, another subsidiary of Cigna, and Humana are named defendants. NCPA applauds Yost’s actions to hold PBMs and their corporate affiliated entities responsible for their contributions to soaring drug costs. These secretive contracting entities have long flown under the radar of policymakers and the general public, so it is a positive that they are now in the spotlight. You can read Yost’s complaint here. Please also see NCPA’s resource outlining the vertical business relationships of insurers, PBMs, GPOs and pharmacies.