Federal and State Litigation Regarding Pharmacy Benefit Managers
Compiled and Summarized by the Law Offices of David Balto
In just the last few years, the three major PBMs (Medco, CVS Caremark, and Express Scripts) faced six major federal or multidistrict cases over allegations of fraud; misrepresentation to plans, patients, and providers; unjust enrichment through secret kickback schemes; and failure to meet ethical and safety standards. These cases resulted in over $371.9 million in damages to states, plans, and patients so far. Below is a summary of these six cases. Note that the regulatory provisions of many of these settlements will expire within 2-10 years.
1. United States v. Merck & Co., Inc., et. al (also cited as United States of America v. Merck-Medco Managed Care L.L.C., et al.) (E.D. Pa.)
Settled: October 23, 2006
Damages: $184.1 million
States participating: Arizona, California, Connecticut, Delaware, Florida, Illinois, Iowa, Louisiana, Maine, Maryland, Massachusetts, Nevada, New York, North Carolina, Oregon, Pennsylvania, Texas, Vermont, Virginia, and Washington.
Whistleblower lawsuits, filed under the federal False Claims Act and state False Claims Acts against Medco Health Solutions, Inc., alleged that Medco:
2. United States of America, et al. v. AdvancePCS, Inc. (Case No. 02-cv-09236)(E.D. Pa.)
Settled: September 8, 2005
Damages: $137.5 million
Whistleblower lawsuit, filed under the Federal False Claims Act, alleging that Advance PCS (now part of CVS Caremark):
A settlement in September, 2005 required Advance PCS, Inc., to:
3. United States of America, et al v. Caremark, Inc. (Case No. 99-cv-00914)(W.D. Tex.)
Pending as of August 2012
States participating: Arkansas, California, DC, Florida, Hawaii, Illinois, Louisiana, Massachusetts, Nevada, New Hampshire, New Mexico, North Carolina, Tennessee, Texas, Utah and Virginia.
Filed by an ex-employee, this case was prosecuted under the Federal False Claims Act and numerous state False Claims Statutes. It alleges that Caremark (now part of CVS Caremark):
4. States Attorneys General v. Caremark, Inc.
Filed: February 14, 2008
Settled: February 14, 2008
Damages: $41 million
States participating: Arizona, Arkansas, California, Connecticut, Delaware, District of Columbia, Florida, Illinois, Iowa, Louisiana, Maryland, Massachusetts, Michigan, Mississippi, Missouri, Montana, Nevada, New Mexico, North Carolina, Ohio, Oregon, Pennsylvania, South Carolina, South Dakota, Tennessee, Texas, Vermont, Virginia and Washington.
Complaint decrees and consent orders against Caremark issued by 29 Attorneys General on February 14, 2008 allege that Caremark:
In conjunction with the complaints, states issued a consent decree/final judgment that required Caremark to:
5. State Attorneys General v. Express Scripts
Settled: May 27, 2008
Damages: $9.3 million to states, plus up to $200,000 to affected patients
States participating: Arizona, Arkansas, California, Connecticut, Delaware, District of Columbia, Florida, Illinois, Iowa, Louisiana, Maine, Maryland, Massachussetts, Michigan, Mississippi, Missouri, Montana, Nevada, New Mexico, North Carolina, Ohio, Oregon, Pennsylvania, South Carolina, South Dakota, Tennessee, Texas, Vermont, Virginia, and Washington.
State Attorneys general settled consumer protection claims alleging that Express Scripts:
The settlement required Express Scripts to:
6. Local 153 Health Fund v. Express Scripts (In re Express Scripts, Inc. Pharmacy Benefits Management Litigation) (Case No. 4:05-md-01672-SNL)
Case consolidated: April 29, 2005
Pending as of January 2009
This case, filed in the Eastern District of Missouri, alleges that Express Scripts:
David A. Balto
Attorney At Law
Law Offices of David Balto
1325 G Street, N.W.
Washington, DC 20005