The nation’s largest pharmacy benefit manager on Tuesday revealed it received a civil investigative demand in August from the U.S. Attorney’s Office for the Southern District of New York asking for information about the firm’s relationships with drug makers and prescription drug plan clients and how payments to and from both work.
Express Scripts also received a subpoena in September from the U.S. Attorney’s Office for the District of Massachusetts office requesting information about its relationship with drug makers, independent 501(c)(3) charitable foundations providing cost-sharing assistance to federal health care program beneficiaries and specialty pharmacies.
“Given the ongoing focus on drug pricing, it is no surprise that the pharmaceutical industry, and by extension our industry, will receive inquiries like these,” an Express Scripts spokesman said in a statement. He said Express Scripts intends to fully cooperate with the requests.
A spokesman for the U.S. Attorney’s Office for the Southern District of New York said the office cannot comment on subpoenas or whether they are sent.
St. Louis-based Express Scripts is the largest pharmacy benefit manager in the country with more than $102 billion in annual revenue. PBMs are the behind-the-scenes middlemen in the drug industry who negotiate drug benefits and pharmacy services with pharmaceutical manufacturers to secure discounts and rebates, often by choosing one drug maker to include in the network over another. But it’s unclear how much of the savings PBMs pocket and how much they pass on to clients.
PBMs recently have been taking heat for playing a part in the skyrocketing price of some prescription drugs, or at least not doing enough to thwart the price hikes. The controversy surrounding the high price prescription drugs and who’s to blame has roiled this year, and was most recently reignited over drug maker Mylan’s 550% increase in the list price of commonly-used and life-saving Epipen epinephrine auto-injectors over eight years. Angry lawmakers, insurers and consumers have demanded answers, and much of the blame has landed on the middlemen.
Express Scripts is also dealing with an ongoing dispute with insurer Anthem, which filed a nearly $15 billion lawsuit suit in March alleging the PBM’s pricing exceeds competitive benchmark pricing by more than $3 billion annually. Express Scripts in April filed a lawsuit in return claiming that Anthem failed to negotiate in good faith. Anthem in July filed a motion to dismiss two counts of Express scripts’ claims, and Express Scripts in August filed a brief in opposition, according to the SEC filing.