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Pharmacy benefit managers CVS Health Corp., Express Scripts Inc., and Prime Therapeutics LLC are in the crosshairs of a new proposed class action challenging the prices of EpiPens, a common treatment for allergic reactions ( Klein v. Prime Therapeutics, LLC , D. Minn., No. 0:17-cv-01884, complaint filed 6/2/17 ).
The PBMs—which act as intermediaries between health insurance companies and drug makers like Mylan Inc., which makes EpiPens—didn’t effectively negotiate for lower EpiPen prices, the lawsuit alleges. Rather, they negotiated for “increasingly large rebates” from Mylan, which benefited the PBMs and their clients and drove EpiPen prices up by more than 600 percent over the past decade, according to the lawsuit.
More than 3.6 million EpiPen prescriptions were written in 2015, according to the complaint. This lawsuit, filed June 2 in a federal court in Minnesota, seeks to represent “tens of thousands” of people whose prescription drug benefits are administered by CVS, Express Scripts, and Prime Therapeutics. The PBMs are accused of breaching their duties under the Employee Retirement Income Security Act.
“Indeed, instead of negotiating for lower or stable prices for all plan members, Defendants negotiated for increasingly large rebates from Mylan for themselves and their clients, driving up the price of EpiPen,” the lawsuit says. “Rather than passing these rebates on to Class members in the form of lower or stable prices, Defendants kept significant amounts, resulting in massive revenue increases for themselves and massive price increases for members of the Class.”
A spokesman for CVS denied the allegations and told Bloomberg BNA that the lawsuit was “built on a false premise” about the role of PBMs.
“Pharmaceutical companies alone are responsible for the prices they set in the marketplace for the products they manufacture,” Mike DeAngelis, senior director of corporate communications for CVS Health, said. “Nothing in our agreements prevents a drug manufacturer from lowering the prices of their products and we would welcome such an action.”
A spokesman for Express Scripts gave a similar statement.
“Rebates don’t raise drug prices, drug makers raise drug prices,” Brian Henry, vice president of corporate communications for Express Scripts, told Bloomberg BNA. “We will vigorously defend ourselves.”
A spokeswoman for Prime Therapeutics said the company believes the lawsuit to have no merit and vowed to vigorously defend against it. She declined to comment further, citing an internal policy against discussing pending litigation.
The lawsuit was filed by Lockridge Grindal Nauen PLLP, Berman DeValerio, and Maul Firm P.C.
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