Does Big Pharmacy Managers Fix Prices? Ohio Attorney General Lawsuit Alleges Cigna, Humana Engaged In Price Fixing For Medicines

A lawsuit filed by the Ohio attorney general alleges that Cigna Corp CI, Humana Inc HUM, and Prime Therapeutics LLC shared pricing and other information to gain leverage during negotiations for rebates.

The lawsuit comes as some policymakers explore the healthcare companies' role in high-cost drugs, Wall Street Journal reported.

The Federal Trade Commission, House Republicans, and several states have launched investigations into pharmacy-benefit managers (PBMs).

Governments, employers, and unions hire PBMs to manage their payments for prescription medicines. In addition to processing pharmacy payments, the PBMs aim to control spending by deciding which drugs they will pay for depending on the rebates they negotiate with pharmaceutical companies. 

The lawsuit said the insurance companies restricted coverage of some insulins and other medicines due to the collusion. If they didn't get the desired rebate, the companies wouldn't pay for the drugs or would favor competitors. 

The companies also categorize some medicines as preferred, charging patients lower out-of-pocket costs. 

Some drugmakers, government officials, and critics say the firms are making medicines expensive because they can negotiate higher rebates off higher prices but keep substantial sums for themselves.

"They're bringing no value to the supply chain," Ohio Attorney General Dave Yost said in an interview before the lawsuit was filed. "All they're doing is inflating the price."

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