US Antitrust Lawsuit Against Healthcare Giants Stalled Amidst Jurisdictional Dispute

Ohio Attorney General David Yost’s Lawsuit Accusing Express Scripts, Humana, and Others of Collusion Faces Jurisdictional Hurdles.

A legal battle over alleged collusion to inflate prescription drug prices has hit a roadblock as healthcare giants, including Express Scripts and Humana, contest the jurisdiction in which the lawsuit should be heard. Ohio Attorney General David Yost filed the lawsuit in March, accusing several major health care companies of violating state antitrust laws and the Ohio Deceptive Practices Act.

Express Scripts, a pharmacy benefit manager (PBM), stands accused alongside corporate relatives Cigna and Evernorth, as well as Ascent Health Services and Prime Therapeutics. The lawsuit alleges that these entities, through Ascent, engaged in anti-competitive practices that artificially raised the cost of prescription drugs.

Express Scripts, acting as a PBM, plays a crucial role in drug transactions by representing insurers. PBMs, including the accused companies, are exempt from the federal anti-kickback statute due to their ability to negotiate substantial discounts from drug manufacturers in exchange for including the products on lists of covered drugs.

Yost contends that by operating through Ascent, the companies effectively shared pricing information, creating an environment where they could avoid competition and exploit pharmacies. The lawsuit suggests that such collaboration harms market competition, ultimately resulting in higher prescription drug prices.

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The legal battle takes an interesting turn as the accused companies seek to move the case from state court to federal court, where they hope to secure a dismissal. Despite being sued under Ohio law, the companies are pushing for a federal forum, a move that could impact the trajectory of the case and its potential outcomes.

Ascent Health Services, formed by Express Scripts in 2019 amid calls for increased transparency in PBM dealings with drugmakers, has also drawn attention for its unique structure. Despite all its customers being based in the United States, Express Scripts strategically headquartered significant parts of the company in Switzerland, known for its stringent bank-secrecy protections.

Additionally, the lawsuit implicates Prime Therapeutics, which acquired a minority stake in Ascent in December 2019, as well as Humana Pharmacy Solutions, a smaller PBM with ties to Ascent.

Source: Ohio Capital Journal