GoodRx, PBMs accused of suppressing reimbursements to independent pharmacies

Reuters

GoodRx, PBMs accused of suppressing reimbursements to independent pharmacies

Nov 4, 2024 at 9:33 pm GMT

<html xmlns="http://www.w3.org/1999/xhtml"><head><title>GoodRx, PBMs accused of suppressing reimbursements to independent pharmacies</title></head><body>

By Brendan Pierson

Nov 4 (Reuters) -Drug coupon aggregator GoodRx and pharmacy benefit managers including CVS Caremark CVS.N and Express Scripts have been hit with at least three class action lawsuits accusing them of working together to suppress reimbursements to small pharmacies for generic prescription drugs.

The first lawsuit was filed by Minnesota-based Keaveny Drug in federal court in Los Angeles last Wednesday, and another was filed in the same court on Friday by Michigan-based Community Care Pharmacy. A third lawsuit was filed on Friday by Pennsylvania-based Old Baltimore Pike Apothecary and Smith's Pharmacy in Providence, Rhode Island, federal court.

Community Care sued only Los Angeles-based GoodRx. The other plaintiffs sued GoodRx and the PBMs, which also include MedImpact Healthcare Systems and Navitus Health Solutions.

"CVS Caremark generally reimburses independent pharmacies at higher levels than chain drugstores, including CVS pharmacies," CVS Caremark spokesperson Mike DeAngelis said in an email. "These lawsuits are entirely without merit, and we will vigorously defend against them."

The other defendants did not immediately respond to requests for comment.

PBMs negotiate prescription drug prices between insurers, pharmacies and drugmakers, and directly reimburse pharmacies for prescription drugs under the terms of the plans they have negotiated. They also offer discount cards that patients can use at their pharmacy networks, which were historically often used by people without insurance to pay for drugs out of pocket.

Until recently, according to the lawsuit, patients could choose to use a discount card instead of their insurance plan if it offered a lower price, but the payment would not be counted toward their deductible. GoodRx is a service that patients can use to check what discounts are available for a drug at a particular pharmacy.

The three lawsuits allege that, starting last year, the PBMs and GoodRx entered into agreements in which the PBMs would use GoodRx's software to compare all available discounts for all patients' generic drug prescriptions, and route each purchase through the PBM with the lowest price - even if it was different than the patient's PBM.

The pharmacy pays a fee, which under the new agreement is split between the patient's PBM and the PBM that handles the purchase. The PBMs do not reimburse pharmacies for these transactions, meaning the patients' cash payment represents the pharmacies' only revenue, and PBMs' profits increase, the lawsuits say.

Large pharmacies, including those directly affiliated with PBMs, such as CVS, can weather the lower reimbursements, but independent pharmacies cannot, the lawsuits say. They allege that the scheme aims to drive smaller pharmacies, which compete with larger PBM affiliates, out of the market.

"These partnerships amount to price-fixing agreements that enable the PBMs to allocate discount card transactions amongst one another in real time, ensuring the PBMs pay the lowest possible reimbursement rates to pharmacies on every transaction," Old Baltimore Pike and Smith's said in their lawsuit.

All of the lawsuits, brought on behalf of proposed classes of similarly situated pharmacies, claim that the agreements violate the federal Sherman Antitrust Act and ask for court orders stopping further anticompetitive conduct. They also seek unspecified amounts of money damages.

PBMs' business practices have drawn increasing scrutiny in recent years, including by the U.S. Federal Trade Commission accusing the three largest PBMs of driving up the cost of insulin drugs.

The cases are:

Keaveny Drug v GoodRx et al, U.S. District Court for the Central District of California, No. 2:24-cv-9379;

Community Care Pharmacy v. GoodRx et al, U.S. District Court for the Central District of California, No. 2:24-cv-9490; and

Old Baltimore Pike Apothecary et al v. GoodRx Holdings et al, U.S. District Court for the District of Rhode Island, No. 1:24-cv-00453.

For Keaveny Drug: Heidi Silton of Lockridge Grindal Nauen, Bobby Pouya of Pearson Warshaw and others

For Community Care Pharmacy: Halley Josephs of Susman Godfrey; Natasha Fernandez-Silber of Edelson and others

For Old Baltimore Pike Apothecary and Smith's Pharmacy: Greg Asciolla of DiCello Levitt; Joshua Grabar of Grabar Law Office; Steve Prignano of McIntyre Tate and others

For defendants: not available

Why are US pharmacy benefit managers under fire?

(Reporting By Brendan Pierson in New York)

</body></html>