News
$9.5 million settlement with pharmacy benefits management company
By Attorney General's office
May 27, 2008 - 1:01:47 PM

Attorney General Richard Blumenthal today announced that Connecticut will receive $170,568 from a $9.5 million national settlement with Express Scripts Inc. to settle allegations that it urged doctors to switch their patients’ drugs in order to benefit its own bottom line.

Express Scripts, a pharmacy benefits management (PBM) company, told doctors that the prescription switches would save money for patients and insurers. In reality, the switches increased Express Scripts’ profits, while often providing consumers and health plans with negligible savings or increasing their costs.

Express Scripts, based in St. Louis, Mo., is one of the nation’s biggest PBMs -- and the third to settle such allegations. Private and government health plans hire PBMs to manage drug benefits.

Under today’s settlement, Express Scripts has agreed to significantly change its business practices, pay $9.3 million to the states and pay $200,000 to establish a reimbursement fund for affected patients.

“Today’s settlement should deliver an express message to Express Scripts – we will pursue any company that puts profits over patients,” Blumenthal said. “Express Scripts urged doctors to alter patient prescriptions, promising cost savings to consumers and health plans. In reality, the drug switches provided more benefits to Express Scripts’ own bottom line, rather than patient costs and health.”

Today’s settlement was reached in coordination with Department of Consumer Protection (DCP) Commissioner Jerry Farrell, Jr.

Connecticut’s share of the settlement is approximately $170,568, part of which can be used to benefit low-income, disabled or elderly consumers of prescription medications, to promote lower drug costs, to educate consumers concerning the cost differences among medications, or for similar purposes.

Connecticut residents impacted by certain of Express Scripts’ drug switches involving cholesterol medications may also seek claims from the reimbursement fund. Approximately 8,000 patients were impacted nationwide (the number of Connecticut patients is presently unknown, but Express Scripts is required to inform impacted patients within four months).

The settlement generally prohibits Express Scripts from soliciting drug switches when:

* The net drug cost of the proposed drug exceeds the net drug cost of the originally prescribed drug;

* The cost to the patient will be greater than the cost of the originally prescribed drug;

* The originally prescribed drug has a generic equivalent and the proposed drug does not;

* The originally prescribed drug’s patent is expected to expire within six months; or

* The patient was switched from a similar drug within the last two years.

The settlement requires that Express Scripts:

* Inform patients and prescribers what effect a drug switch will have on a patient’s co-payment;

* Inform prescribers of Express Scripts’ financial incentives for certain drug switches;

* Inform prescribers of material differences in side effects or efficacy between prescribed drugs and proposed drugs;

* Reimburse patients for out-of-pocket expenses for drug switch-related health care costs and notify patients and prescribers that such reimbursement is available;

* Obtain express, verifiable authorization from the prescriber for all drug switches;

* Inform patients that they may decline a drug switch and the conditions for receiving the originally prescribed drug;

* Monitor the effects of drug switches on the health of patients;

* Adopt a certain code of ethics and professional standards;

* Refrain from making any claims of savings for a drug switch to patients or prescribers unless Express Scripts can substantiate the claim; and

* Inform prescribers that visits by Express Scripts’ clinical consultants and promotional materials sent to prescribers are funded by pharmaceutical manufacturers, if that is the case.

Today’s resolution marks the third settlement with a PBM. In 2004, a group of 20 states settled with Medco Health Solutions, Inc., then the world’s largest PBM. In February, a group of 29 states settled with Caremark Rx, LLC, another of the world’s largest PBMs.

States also joining Connecticut in today’s settlement are: Arizona, Arkansas, California, Delaware, District of Columbia, Florida, Illinois, Iowa, Louisiana, Maryland, Massachusetts, Michigan, Mississippi, Missouri, Montana, Nevada, New Mexico, North Carolina, Ohio, Oregon, Pennsylvania, South Carolina, South Dakota, Tennessee, Texas, Vermont, Virginia and Washington.

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