A lawsuit was filed against Cigna (NYSE:CI), Humana (NYSE:HUM), and Pharmacy Benefit Manager (PBM) Prime Therapeutics on Monday over their role in sharing pricing, and other details to gain the upper hand in negotiations with drugmakers over rebates, The Wall Street Journal reported.
Ohio attorney general Dave Yost filed the litigation in a state court, accusing the companies of restricting coverage for life-saving medicines such as insulin due to the collusion.
According to the lawsuit, three companies used a Swiss-based group-purchasing organization called Ascent Health Services, owned by Cigna (CI) and Prime, to coordinate during negotiations with drugmakers to fix the amounts of rebates.
Ohio attorney alleges that the PBMs operated by Cigna (CI) and Humana (HUM), along with Prime Therapeutics, shared drug pricing details through Ascent and used that information to pressure drugmakers to pay the highest rebates.
“Ascent was, they realized, the perfect vehicle with which to harmonize and increase drug prices, Rebates, fees,” the lawsuit alleges.
PBMs maintain lists of drugs covered by health insurers and negotiate rebates in pricing negotiations with pharmaceutical manufacturers.
According to the lawsuit, if a company failed to get a particular rebate, it would independently keep the drugs out of the formularies or give it a lower preference.
“They’re bringing no value to the supply chain,” Yost said in an interview ahead of the litigation. “All they’re doing is inflating the price.” The companies were not immediately available for comments.
The Ohio lawsuit comes amid rising regulatory concerns over the role of PBMs in the healthcare system.