A federal judge agreed to toss a lawsuit against three of the nation’s largest pharmacy benefit managers (PBMs) brought by the state of Hawaii.
The lawsuit alleged CVS Caremark, Express Scripts and OptumRx improperly raised drug pries in the state. The case was dismissed without prejudice, leaving the state 45 days to change the complaint.
Hawaii previously claimed the relationship between PBMs and manufacturers led to “skyrocketing” prices for prescription drugs in the state, Attorney General Anne Lopez said in a news release in October. She likened the behavior as pay-to-play and anticompetitive.
Lopez argued manufacturers charge rebates to PBMs to obtain better placement on drug formularies, but that if the manufacturer chooses to not increase the rebate, its medications may be excluded from formularies. From 2014 to 2022, the number of medications removed from the three PBMs’ formularies increased by 961%, the state said.
The PBMs said they contract with health plans, some operated by the state, and do not directly interact with customers. PBMs negotiate rebates to lower drug costs for patients, the defendants said in January when the company’s attorneys filed a motion to dismiss.
“If the state’s allegations are right, then the state is a direct participant in and beneficiary of the alleged wrongdoing,” the defendants said in its memorandum in support of the motion.
“The department of the attorney general is awaiting the court’s written decision to determine the next course of action,” said a spokesperson for the AG Lopez’s office in a statement to Fierce Healthcare.
Express Scripts and OptumRx did not immediately return a request for comment.
“CVS Caremark is proud of the work we have done to make insulin more affordable for all Americans with diabetes, and we stand by our record of protecting American businesses, unions and patients from rising prescription drug prices,” said a Caremark spokesperson in a statement to Fierce Healthcare. “Any action that limits the use of these PBM negotiating tools would reward the pharmaceutical industry and return the market to a broken state, leaving American businesses and patients at the mercy of the prices drugmakers set.”
Some states, like Vermont, have opted to regulate PBMs as federal action continues to stall. Bipartisan lawmakers and policy experts have largely agreed for months that PBMs should be reformed, but so far federal legislation has not been enacted by Congress.
Editor's note: This story has been updated to correctly attribute a quote to the defendants rather than the district judge.