AG Announces Mutli-State Settlement with Express scri pts Inc.

HARRISBURG – One of the nation’s largest pharmacy benefits management companies has reached a settlement with Pennsylvania and 28 other states resolving claims of deceptive business practices.

Attorney General Tom Corbett said the agreement was reached with Express scri pts Inc., a pharmacy benefits management company with more than 50 million customers nationwide.

As part of the settlement, Express scri pts is required to change its business practices and pay $9.3 million to the states and up to $200,000 in reimbursement to patients who incurred expenses related to certain switches between cholesterol-controlling drugs.

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 pre scri ption medications, to promote lower drug costs for state residents, to educate consumers concerning the cost of differences among medications and for other similar purposes.

Express scri pts has also agreed to make a series of disclosures to consumers, doctors and employers about the company’s business practices.

In the complaint, the states allege that Express scri pts 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, Express scri pts may have overstated the cost benefits of switching to certain preferred medications.

Additionally, Corbett said that Express scri pts did not clearly disclose to their clients plans that rebates accrued from the drug switching process would be earned by Express scri pts.

“Today’s settlement puts an end to Express scri pts’ misleading business practices and takes the necessary steps to protect health plans and patients,” Corbett said.

The settlement generally prohibits Express scri pts from soliciting drug switches when:

the net drug cost of the proposed drug exceeds the net drug cost of the originally prescribed drug;
the originally prescribed drug has a generic equivalent and the proposed drug does not;
the originally prescribed drug’s patent is expected to expire within six months; or
the patient was switched from a similar drug within the last two years.

The settlement requires Express scri pts to:

-inform patients and prescribers what effect a drug switch will have on a patient’s co-payment;
-inform prescribers of Express scri pts’ financial incentives for certain drug switches;
-inform prescribers of material differences in side effects or efficacy between prescribed drugs and proposed drugs;
-reimburse patients for out-of-pocket expenses for drug switch-related health care costs and notify patients and prescribers that such reimbursement is available;
-obtain express, verifiable authorization from the prescriber for all drug switches;
-inform patients that they may decline a drug switch and the conditions for receiving the originally prescribed drug;
-monitor the effects of drug switches on the health of patients;
-adopt a certain code of ethics and professional standards;
-refrain from making any claims of savings for a drug switch to patients or prescribers unless Express scri pts can substantiate the claim; and
-inform prescribers that visits by Express scri pts’ clinical consultants and promotional materials sent to prescribers are funded by pharmaceutical manufacturers, if that is the case.

Corbett said that PBMs enter into contracts with employer and governmental health plans to process pre scri ption drug claims for drugs provided to patients enrolled in those health plans; negotiate with drug companies to obtain discounts; negotiate discounts with participating retail pharmacies to provide dispensing services; and dispense drugs to patients through PBM-owned mail order pharmacies.

In the thirty years since the first PBMs appeared, their services have evolved to include complex rebate programs, pharmacy networks, and drug utilization reviews.

Corbett noted that today’s resolution marks the third settlement that the states have entered into with pharmaceutical benefits managers. In 2004, a group of 20 of states settled with Medco Health Solutions, Inc., the world’s largest pharmaceutical benefits manager. In February of this year, a group of 29 states settled with Caremark Rx, LLC, another of the world’s largest pharmaceutical benefits managers.

The Attorneys General from Arizona, Arkansas, California, Connecticut, Delaware, District of Columbia, Florida, Illinois, Iowa, Louisiana, Maryland, Massachusetts, Michigan, Mississippi, Missouri, Montana, Nevada, New Mexico, North Carolina, Ohio, Oregon, Pennsylvania, South Carolina, South Dakota, Tennessee, Texas, Vermont, Virginia and Washington participated in the settlement.

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