Liz Murrill
BATON ROUGE, La. – Louisiana Attorney General Liz Murrill has filed three separate lawsuits against CVS Health Corp, CaremarkPCS Health LLC and their affiliated entities for “unfair, deceptive, and unlawful” practices.
The state’s top lawyer alleges, among other things, that CVS and the other pharmacy benefits managers, or PBMs, used customers’ personal information to “lobby for their own corporate interests” against pending state legislation.
“PBMs are not managing the costs of drugs – they are driving the price up! CVS and other PBMs continue to hide behind various confidentiality clauses to cover up the way they are manipulating drug prices,” Murrill said in a statement. “It’s wrong and unlawful. CVS will have to account for its actions.”
PBMs are companies that manage prescription drug benefits for insurers and employers, among others. They act as middlemen for drug makers, pharmacies, and entities paying for prescriptions. They develop formularies, process claims, and negotiate drug prices.
CVS Caremark, Express Scripts, and OptumRx are considered the “big three” PBMs.
According to Murrill’s first lawsuit, CVS sent “urgent” text messages to customers – using contact information obtained through prescription or health notifications – to oppose House Bill 358.
The legislation sought to prevent PBMs from owning or operating pharmacies in Louisiana. The bill failed to pass during the regular legislative session; it did not receive a final vote in the Senate despite passing the House.
“These texts and other forms of communication were inaccurate, misleading, and deceptive,” Murrill said Tuesday. “They were clearly intended to incite fear among vulnerable people regarding their medical needs to garner their support to lobby the legislature against pending legislation that CVS opposed.
“In every respect, CVS’s use of its pharmacy customers’ contact information to send text messages spreading lies to serve its own political agenda of maintaining its anti-competitive economic position – to the obvious detriment of the public interest – creates unethical and deceptive acts, in violation of public policy and established standards of decency.”
In the attorney general’s second lawsuit filed Tuesday, she alleges CVS engaged in practices that distort the drug market and drive-up costs for the state’s public health programs and citizens.
CVS Caremark controls multiple, interlocking stages of the pharmaceutical supply and reimbursement chain – from insurance to drug pricing, to pharmacy distribution and dispensing, the lawsuit states.
This structure gives it market power not just horizontally, but also vertically across multiple tiers of the healthcare system, Murrill explains.
In addition, CVS’s rebate system causes drugs to cost more than they would in a properly functioning competitive market, the attorney general claims.
“In a competitive market, price competition should drive lower prices over time, especially when generic or biosimilar alternatives are available,” Murrill said. “Through the use of a foreign group purchasing organization, CVS can even obscure actual net drug costs and enable double dipping of rebates and administration fees.”
In Murrill’s third lawsuit, she alleges CVS’s business practices harm independent pharmacies.
“CVS’s abuse of its enormous market power to impose unethical and exceedingly high fees on independent pharmacies – under threat of being expelled from the CVS network – amounts to unfair competition and unfair trade practice,” the attorney general said.
Gov. Jeff Landry said Tuesday he is pleased Murrill is holding PBMs like CVS accountable.
“For too long, big drug middlemen, called PBMs, have inflated drug prices and taken advantage of Louisianans,” he said in a statement. “This month, CVS went too far by sending a politically charged and unethical message to its customers, and we won’t let that go unanswered.
“In Louisiana, we refuse to be intimidated by the fear tactics of these middlemen. Our focus remains on lowering drug prices and ensuring a fair, transparent pharmaceutical market.”
The state seeks both injunctive relief and restitution.