NYC Transit Authority sues Express Scripts for Failing to Effectively Manage its Prescription Drug Benefit Plan

A recent lawsuit filed by the New York City Transit Authority (NYCTA) raises important considerations for plan sponsors and agencies, such as the NYCTA, that retain the services of Pharmacy Benefits Managers (PBMs). On May 16, 2019, the NYCTA sued Express Scripts in New York state court alleging six counts for breach of contract. The NYCTA alleges that since retaining Express Scripts to manage its prescription drug benefit plan, “the NYCTA has paid tens of millions of dollars in fraudulent, abusive, or excessive prescription drug claims that were managed, administered, and fulfilled by” Express Scripts. On June 3, 2019, Express Scripts filed a Notice of Removal, which took the case from New York state court to United States District Court for the Southern District of New York (a tactic commonly utilized by out-of-state defendants), meaning that the NYCTA must now pursue its claims in federal court rather than in state court.

On June 25, 2019, Express Scripts filed a Motion to Dismiss the NYCTA’s Complaint, wherein Express Scripts does not deny that it processed the fraudulent, abusive or excessive claims, but instead seeks to shift the blame from itself to the NYCTA. Surprisingly, Express Scripts asserts in its Motion to Dismiss that the NYCTA’s “lawsuit is a poor attempt to shift blame for NYCTA’s failure to manage and operate its prescription health plan.” The troubling part of this assertion is that Express Scripts is essentially blaming its client, the NYCTA, for failing to do the work it hired Express Scripts to do.

The NYCTA will have the opportunity to file Opposition to Express Scripts’ Motion to Dismiss and Frier Levitt will closely monitor this important case. In the meantime, it is important that plan sponsors and agencies that use PBMs, including Express Scripts, seriously consider whether they are getting what they bargained for from PBMs.

Frier Levitt routinely works with plan sponsors and other similar agencies to assess PBMs’ performance under the corresponding contracts. If you are a plan sponsor entering a contractual relationship or having a dispute with a PBM, contact Frier Levitt today to speak to an attorney.