Antitrust Law Daily Wrap Up, ANTITRUST NEWS: Prescription benefit managers allegedly conspired to eliminate independent compounding pharmacies, (Jan 19, 2016)

By Linda O’Brien, J.D., LL.M.

The largest pharmacy benefit managers in the United States have conspired to jointly boycott independent compounding pharmacies in order to eliminate those pharmacies from the market for pharmaceuticals covered by group and individual health plans, according to a complaint filed in the federal district court in St. Louis (Precision Rx Compounding, LLC v. Express Scripts Holding Company, January 15, 2016).

Precision Rx Compounding, LLC, C&M Health Pro, LLC, Northern VA Compounders, PLLC, TOTH Enterprises II, P.A., The Daily Dose, LP, and CPRx Pharmacy, LP operate independent pharmacies that fill prescriptions for compounded medicines.

The complaint states that prescription benefit managers (PBMs) review and make reimbursement decisions on prescription drug claims covered by group and individual health plans. PBMs dominate the market for administering prescription drug payments to pharmacies and control approximately 95 percent of all the plan-covered drugs prescribed in the U.S. In 2013, one of the largest PBMs, Express Scripts, joined together with CVS Health Corporation, OptumRx, Inc., and Prime Therapeutics, LLC, through the industry group Pharmaceutical Care Management Association (PCMA) to eliminate coverage for compounded medications from pharmacies that Express Scripts and its co-conspirators did not control.

According to the complaint, Express Scripts and its co-conspirators coordinated efforts to boycott independent compounding pharmacies by utilizing various anticompetitive means. Those actions allegedly included: (1) identifying and targeting physicians that prescribed compounded drugs and coerced those physicians to cease prescribing compounded drugs; (2) making false and misleading statements to patients about the safety and legality of compounded drugs; (3) eliminating coverage or denied claims for compounded drugs; (4) drastically reduced reimbursements to pharmacies for compounded drugs; (4) orchestrating onerous administrative obstacles for compounding pharmacies to fill prescriptions and obtain reimbursement; (5) restricting and/or eliminating the use of mail order delivery of compounded drugs; and (6) removing pharmacies from networks by terminating provider agreements. The defendants also audited the plaintiffs on claims that had been previously approved and withheld reimbursement of unrelated claims.

As a result of the anticompetitive conduct of Express Scripts and its co-conspirators, the plaintiffs’ access to the market for compounded medications has been limited or eliminated, the plaintiffs allege. Without the ability to fill prescriptions for patients in the networks of Express Scripts and its co-conspirators, the plaintiffs and other independent compounding pharmacies will be excluded from the relevant market and Express Scripts will be allowed to dominate such market, the complaint claims.

The plaintiffs assert claims for conspiracy to restrain trade in violation of Section 1 of the Sherman Act. The action seeks declaratory and injunctive relief, compensatory and treble damages, interest, costs of suit, attorney fees, and any other just and proper relief.

The case is No. 4:16-cv-00069.

Attorneys: Anthony G. Simon (The Simon Law Firm, P.C.), Steven L. Bloch and Ora N. Nwabueze (Bailey Glasser LLP), and Richard J. Quadrino (Quadrino Law Group, P.C.) for Precision Rx Compounding, LLC, C&M Health Pro, LLC, Northern VA Compounders, PLLC, TOTH Enterprises II, P.A., The Daily Dose, LP, and CPRx Pharmacy, LP.

Companies: Precision Rx Compounding, LLC; C&M Health Pro, LLC; Northern VA Compounders, PLLC; TOTH Enterprises II, P.A.; The Daily Dose, LP; CPRx Pharmacy, LP; Express Scripts Holding Company; Express Scripts, Inc.

News: Antitrust MissouriNews