Express Scripts, one of the nation's largest pharmacy benefits management companies, has reached a settlement agreement with the state of Pennsylvania, the District of Columbia and 28 other states resolving claims of deceptive business practices.
Pa. Attorney General Tom Corbett announced the settlement in a May 27 statement.
Headquarted in St. Louis, Missouri, the PBM company has more than 50 million customers nationwide.
The states allege that Express Scripts engaged in deceptive business practices by not always acting in a manner consistent with its representations to consumers and employers about its pharmacy benefit management services. In particular, the states say Express Scripts may have overstated the cost benefits of switching to certain preferred medications.
As part of the settlement, Express Scripts is required to change its business practices and pay $9.5 million, of which $9.3 million will be apportioned among the states and the District of Columbia. The remaining $200,000 will be paid to patients for physician visits and tests related to switching brands of statin drugs.
The company says these amounts had previously been fully reserved and, thus, there will be no effect on its results for the second quarter of 2008 or any future period.
The company says it does not admit to any of the assertions made by the Attorneys General in the Assurance of Voluntary Compliance and Discontinuance agreement. In particular, Express Scripts said that it has implemented and continually refined its procedures to ensure that any drug switches were safe and appropriate, and intended lower costs for both its clients and plan sponsors. The company also said that its disclosures to clients have been forthright and adequate.
Corbett said that Pennsylvania will receive a total of $658,000 from the settlement, with at least $374,000 being used to benefit low-income, disabled or elderly consumers of prescription medications, to promote lower drug costs for state residents, to educate consumers concerning the cost of differences among medications and for other similar purposes.
"Today's settlement puts an end to Express Scripts' misleading business practices and takes the necessary steps to protect health plans and patients," Corbett said.
Corbett added that today's resolution marks the third settlement that the states have entered into with pharmaceutical benefits managers. In 2004, a group of 20 states settled with Medco Health Solutions, Inc., and in February of this year, a group of 29 states settled with Caremark Rx, LLC, another large PBM company.
What is your experience with PBM companies? E-mail Associate Editor Molly Merrill at molly.merrill@medtechpublishing.com.