Dive Brief:
- Arkansas is suing major pharmacy benefit managers Optum and Express Scripts for their alleged role in fueling the deadly opioid epidemic in the state, dragging the drug middlemen to the fore of a yearslong wave of litigation over who is responsible for the public health crisis.
- According to the lawsuit filed Monday by Arkansas’ attorney general, the PBMs and their subsidiaries increased the use of opioids by putting the addictive medication on lower tiers of their formularies, making them cheaper and more accessible and profiting as a result.
- Arkansas is asking the court to force Optum and Express Scripts to comply with law requiring they monitor and report suspicious opioid distributions, and is seeking damages and restitution. Optum denied the allegations, while Express Scripts did not respond to a request for comment.
Dive Insight:
Starting in the late 1990s, a rash of inexpensive, highly addictive and duplicitously marketed painkillers hit the market, hooking millions of Americans and causing a cascading wave of deaths. Almost 645,000 people died from an overdose involving an opioid from the start of the epidemic to 2021, according to the Centers for Disease Control and Prevention.
No state was unaffected, but a few (especially in the rural Midwest) were particularly hard-hit. That includes Arkansas, which by 2016 had the second-highest opioid prescription rate in the nation. By that year, 114.6 opioids were being dispersed for every 100 Arkansas, nearly twice the national average, according to the attorney general’s office.
Since the opioid epidemic began, thousands of lawsuits have been filed by citizens, counties, states and the federal government against companies that facilitated the crisis, especially the pharmaceutical manufacturers that made the drugs and the pharmacies that dispensed them.
However, PBMs — middlemen that sit between drugmakers and insurers in the pharmaceutical supply chain — have sidestepped the worst of the controversy. Only a handful of counties, including those in California, Ohio, Texas and Virginia, have sued PBMs for their alleged role in furthering the epidemic.
Litigation from states is also rare. The state of Alaska is suing Express Scripts for its role in the crisis, and Nebraska has also gone after PBMs, according to the Arkansas attorney general’s office.
“Pill by pill and dollar by dollar, PBMs enabled the opioid epidemic in Arkansas. Today, we begin the process of holding them accountable for their roles in a crisis that has ravaged our state — a crisis they helped cause, contributed to, and furthered,” Arkansas Attorney General Tim Griffin said in a statement Monday.
Arkansas’ lawsuit focuses on the PBMs’ financial incentives for placing opioids on a lower tier of their drug formularies. The lower the tier, the less consumers have to shell out in copayment. As a result, drugmakers want their drugs to be placed on lower tiers to be more accessible to consumers. Drugmakers pay PBMs a discount, or a rebate, in exchange for favorable placement for their products.
That financial incentive led PBMs to profit from the opioid crisis by negotiating high rebates with opioid manufacturers like the now-bankrupt Purdue Pharma, the maker of Oxycontin, the lawsuit alleges.
Express Scripts and Optum also failed to put measures in place that would have curbed overprescribing, like requiring prior authorization, according to the suit. The PBMs also allegedly didn’t properly review members’ drug utilization, and dispensed massive quantities of opioids through mail-order pharmacies without controls against diversion.
“Defendants ignored the necessary safeguards in order to ensure increased opioid prescriptions and sales,” the lawsuit says.
Arkansas says that Express Scripts and Optum should have been aware opioids were being misused, given the PBMs track claims data for the billions of prescriptions they process each year.
“Defendants know when patients whose benefits they manage fill opioid prescriptions written by multiple doctors, and when they fill them at multiple pharmacies ... In short, Defendants have had a unique vantage point that allowed them access to the entire landscape of the unfolding opioid epidemic for two decades,” the lawsuit says.
Optum, a subsidiary of healthcare behemoth UnitedHealth, denied the allegations.
“Optum did not cause the opioid crisis or make it worse, and we will defend ourselves in this litigation,” a spokesperson said via email.
Opioid litigation has been consolidated in front of a federal judge in Ohio. Many major cases have already been settled, resulting in tens of billions of dollars in restitution flowing to plaintiffs. Much of that is being used to combat the ripple effects of the epidemic, though there is little oversight in how those dollars are being spent, according to a KFF investigation.
Though PBMs haven’t been targeted in much of the opioid litigation so far, major PBMs are not strangers to lawsuits over business practices critics say are confusing at best and illegal at worst, while helping the middlemen bring in billions of dollars in annual revenue.
Hawaii, California, Ohio and Kentucky — and the city of Cleveland — have all filed lawsuits against PBMs over a range of issues, including alleged price fixing.
At the federal level, the Federal Trade Commission and a number of other government bodies are currently investigating the companies. Lawmakers on the Hill are particularly concerned about the anticompetitive effects of PBM concentration, as three PBMs — Caremark, owned by CVS; Express Scripts, owned by Cigna; and Optum Rx, owned by UnitedHealth Group — control roughly 80% of the prescription drug market.
