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Antitrust Complaint Against Express Scripts

ST. LOUIS (CN) - Compounding pharmacies accuse Express Scripts of conspiring with other giant pharmacy benefit managers to squeeze them out of the market by an illegal boycott, in a federal antitrust complaint.

Precision RX Compounding and five other pharmacies accuse Express Scripts of "an ongoing and multi-faceted conspiracy between the nation's largest pharmacy benefit managers ('PBMs') - including Express Scripts, CVS Health Corporation, OptumRx, Inc., and Prime Therapeutics, LLC -to jointly boycott compounding pharmacies to eliminate plaintiffs from the market for pharmaceuticals covered by group and individual health plans."

However, only Express Scripts is named as a defendant in the Jan. 15 lawsuit.

Compounding pharmacies, which require special certification, can provide personalized medicine for patients. It is both an art and a science, the Professional Compounding Centers of America say on their website.

They say in the lawsuit: "Through their role as claim administrators for group and individual health plans, Express Scripts and its co-conspirators improperly decide whether and to what extent pharmacies are reimbursed for prescribed and filled drugs.

"Although health plans are financially responsible for covered prescription drugs it is the PBMs that make the decision on whether a certain drug is covered by a specific group or individual health plan. The PBMs such as Express Scripts have inserted themselves as middlemen and act as gatekeepers when patients submit prescriptions to pharmacies."

Antitrust laws require that PBMs such as Express Scripts unilaterally establish their drug reimbursement and coverage policies, the plaintiffs say.

"At the heart of this lawsuit is the fact that Express Scripts and its co-conspirators have done just the opposite. They have conspired with each other to boycott compounding pharmacies by eliminating coverage for compounding ingredients, cutting off network access, and through a specific set of other tactics discussed herein, certainly have caused and will continue to cause on an accelerated basis the significant financial decline (if not elimination) of the plaintiffs and other independent compounding pharmacies from the market for prescription drugs covered by plans."

The pharmacies say that Express Scripts and its co-conspirators by sheer market power have the ability to dictate terms of repayment to pharmacies that fill prescriptions.

Express Scripts is the largest PBM in the nation and its alleged co-conspirators are the second, third and fourth largest PBMs: 95 percent of U.S. prescriptions are covered by the plans, according to the lawsuit.

The plaintiffs say that if they fill prescriptions from plan-covered patients - and they must do so to survive - they are forced to deal with Express Scripts and its co-conspirators and their terms.

The pharmacies say Express Scripts has a conflict of interest in its gatekeeper role: for instance, it owns a mail order business that competes with independent compounding and specialty pharmacies.

They claim that Express Scripts and its co-conspirators deployed a series of unreasonable restrictions designed to eliminate the plaintiffs as competitors.

Those restrictions include making misleading statements to doctors and patients about the safety of compounding drugs, eliminating or denying coverage from compounding pharmacies, drastically reducing reimbursement to compounding pharmacies, and creating onerous procedural and administrative obstacles for compounding pharmacies to receive reimbursement.

Compounded drugs play a critical role for patients, the pharmacies say. They offer alternatives to mass-produced drugs tailored to meet an individual patient's needs, alternative medications for patients with drug allergies, and alternatives to opioid narcotics.

An Express Scripts spokesman said in an email that the company has no comment, but will defend itself vigorously.

Express Scripts' website states that costs associated with compounding drugs have skyrocketed in recent years: in some cases, from $90 to $1,100 per prescription. It claims that some compounding pharmacies have taken advantage of a loophole to pad their revenue.

"By charging hundreds or thousands of dollars per gram of bulk powder or cream, certain compounding pharmacies have needlessly driven up the cost of care," Express Scripts says on its website. "As a result, some elements that are used to make compounded medications have been exorbitantly overpriced. Our clients and their members have been paying the price."

Express Scripts says its solution to the rising costs includes evaluating all ingredients in compounded drugs, managing the use of compounded medication and blocking more than 1,000 ingredients whose prices have been inflated, but provide no clinical benefit.

"If a patient truly needs a compounded medication covered by their plan, we will make sure they get it," Express Scripts says. "In many cases, patients who take compounded medications do so because they cannot ingest available alternatives. For example, a patient who cannot swallow a tablet may need it crushed or liquefied. But, by and large, compounded medications do not provide any additional clinical value over what is currently available. There are numerous FDA-approved or over-the-counter alternatives that patients can take. And we will continue to offer those alternatives to patients as a way to address their health needs and control costs."

The plaintiffs seek damages for violations of the Sherman Act and injunctive relief prohibiting Express Scripts from violating antitrust laws. Their lead counsel is Anthony G. Simon.

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