NY State Attorney General Sues Health Insurer and PBM Over Management of Pharmacy Benefits
08/10/2004A recent lawsuit by the New York State Attorney General against CIGNA and Express Scripts, Inc. opens another front in litigation over the delivery and management of pharmaceutical benefits. This new salvo draws health insurance companies into the fray along with pharmaceutical benefit managers.
New York alleged that it had contracted with a CIGNA company to run the pharmacy benefit for the New York state employees’ health plan, and that CIGNA had then subcontracted with Express Scripts, a pharmaceutical benefit management company. New York brought claims against both entities based on its allegations that Express Scripts’ benefited itself at the state’s expense by allegedly failing to pass along to New York rebates it received from pharmaceutical companies, and by promoting patient switches to more expensive drugs. Allegations such as these have been the subject of recent litigation, investigations and settlements involving pharmacy benefit management companies.
New York’s action raises the possibility of similar legal actions against health insurers related to pharmacy benefit managers’ practices by purchasers of health benefit plans, including state health plans, self-funded employer health plans and consumers.
