Louisiana Insurance Commissioner Tim Temple
Express Scripts, the predominant pharmacy benefit manager (PBM) in Louisiana, has agreed to begin reimbursing pharmacies across the state to comply with a new state directive that sets dispensing fees PBMs must pay to the pharmacies.
The agreement between Express Scripts and the Louisiana Department of Insurance (LDI) comes in the wake of a recent ruling in the Baton Rouge-based 19th Judicial District Court that sided with state insurance regulators, the department said in an April 23 news release.
The LDI policy – Directive 257 – took effect on March 1 and enforces provisions of a state law enacted in 2025 that aim to ensure local pharmacies are fairly compensated for dispensing pharmaceuticals.
“The 19th JDC’s ruling, along with Express Scripts’ cooperation, allows us to move forward with consistent enforcement of professional dispensing fees for local pharmacies across the state,” Insurance Commissioner Tim Temple said in a statement.
The 19th Judicial District Court has yet to issue a signed judgment in the case, the LDI told the Louisiana Record..
Pharmacy benefit managers are third-party companies that oversee prescription drug benefits for insurers, major employers and Medicare drug plans. Express Scripts has been a defendant in both state and federal lawsuits, with some alleging the PBM’s policies low-ball dispensing fees to local pharmacies.
The LDI’s agreement will resolve complaints resulting from reimbursement appeals that were filed since March 1. The settlement bars PBM compensation payments to pharmacies involving a 30-day supply of a drug that are less than Medicaid’s National Average Drug Acquisition Cost amount plus $9, according to Directive 257. Anything less than this rate is unfair and unreasonable under Louisiana law, the LDI reported.
The Express Scripts settlement comes in the wake of the Legislature passing House Bill 264 last year. In addition to giving the insurance commissioner more powers to review PBM reimbursement policies, HB 264 allows PBMs to negotiate rebates with drug companies but bars retention of any part of the rebates; requires the commissioner to be informed when brand-name drug prices rise more than 15% over a year’s time; and bars PBMs from steering patients to pharmacies that the PBM has a control in or ownership interest.
Greater scrutiny of PBM activities has also occurred at the federal level.
In February, the Federal Trade Commission (FTC) negotiated a settlement with Express Scripts and its affiliate companies (ESI) to change their business practices in ways that increase transparency and reduce patients’ out-of-pocket expenses for drugs such as insulin. The changes are expected to save patients $7 billion over the coming decade and lead to millions of dollars of increased revenues for community pharmacies, according to the FTC.
“The FTC’s settlement with ESI will end its business practices that have kept drug prices high, ultimately providing meaningful financial relief to American patients who depend on ESI to access life-sustaining prescription drugs as well as community pharmacies who will see new revenues each year and relief from being squeezed,” FTC Chairman Andrew Ferguson said in a prepared statement.
Neither Express Scripts nor its parent company responded to requests for comment about the Louisiana settlement. But after the FTC announcement, Express Scripts said its priority would be to lower drug costs.
“This settlement (with the FTC) enables us to keep moving forward, and we appreciate the administration’s reinforcement of our commitment to pharmacy benefits that put Americans first,” the company said in a statement. “As enforced by the settlement, our new, transparent pharmacy benefits model ensures our members get their medicines at the lowest price – whether it’s the Express Scripts’ negotiated cost, their copay or a cash-discount price.”
