The State of Hawaii, through its Department of the Attorney General, has filed a Complaint in the Circuit Court of the First Circuit, State of Hawaii against three of the largest pharmacy benefit mangers (“PBMs”) in the industry—CaremarkPCS Health, L.L.C., Express Scripts, Inc., and OptumRx, Inc.—pursuant to Hawaii’s anti-trust laws, HRS § 480-1, et seq. Since the Complaint’s filing, Express Scripts, Inc. removed the case to federal court in the U.S. District Court, for the District of Hawaii, and the parties are engaged in motion practice on a possible remand back to Hawaii state court.
The Hawaii Attorney General’s (“AG”) Complaint asserts four claims for relief under Hawaii law, including claims for: (1) deceptive trade practices; (2) unfair trade practices; (3) unfair methods of competition; and (4) state damages. The claims stem from an “unfair and deceptive scheme” utilized by the PBMs, which has “increased prices and reduced access to brand-name prescription drugs for Hawaii consumers.” More specifically, the State of Hawaii alleges that the PBM defendants “engaged in deceptive acts or practices in trade” by misrepresenting, or failing to disclose, details related to their business practices. This includes, among other things, “[m]isrepresenting that the [PBMs] function to lower the cost of prescription drugs; “[m]isrepresenting that rebates and other payments from manufacturers lower the cost of prescription drugs”; and “[f]ailing to disclose that the [PBMs] financially benefit from inflated WAC prices.” The State further alleges that the PBMs engaged in unfair acts, practices, and methods of competition by engaging in schemes to inflate the wholesale acquisition cost (“WAC”) of prescription drugs in order to extract more fees. According to the Complaint’s allegations, the “PBMs’ share of insulin expenditures increased by 154.6% from $5.64 out of every $100 in 2014 to $14.36 in 2018.”
Notably, providers operating in Hawaii themselves can assert similar claims related to injuries stemming from a PBMs’ unfair method of competition under HRS § 480-2(e). Pharmacies who have been injured as a result of an illegal action under this statute are able to recover threefold the damages sustained in addition to reasonable attorney’s fees with the costs of suit pursuant to HRS § 480-13. In addition to monetary damages, a Pharmacy may also seek to enjoin the unlawful trade practice.
How Frier Levitt Can Help
Frier Levitt attorneys routinely counsel pharmacies across the United States, as well as various other healthcare and life sciences clients on PBM related issues. Our attorneys are at the forefront of disputing PBM anti-competitive practices and have extensive knowledge of all aspects of PBMs in terms of their relationships with pharmacies and other healthcare providers.
Contact us to speak with an attorney to discuss how Frier Levitt can assist in leveraging state laws and contractual protections to curb abuse PBM conduct and unreasonable reimbursement terms.
