Two independent pharmacies have taken a major step toward challenging the practices of drug coupon aggregator GoodRx and several Pharmacy Benefit Managers (PBMs), including CVS Caremark, Cigna’s Express Scripts, Navitus, and MedImpact, with at least four proposed class action lawsuits. The pharmacies, Old Baltimore Pike Apothecary and Smith’s Pharmacy, have filed a motion to consolidate these cases in Rhode Island federal court, accusing the companies of deliberately suppressing reimbursements for generic drugs in a scheme designed to push smaller, independent pharmacies out of business.
The pharmacies allege that GoodRx and the PBMs are working together to unfairly reduce reimbursements to small pharmacies, leading to financial hardship for these businesses and consolidating market power in favor of larger, chain-affiliated pharmacies like CVS. The lawsuit claims that these actions violate federal antitrust laws and are detrimental to fair competition in the pharmaceutical marketplace.
In a motion filed on Tuesday with the U.S. Judicial Panel on Multidistrict Litigation, the plaintiffs argue that Rhode Island is the appropriate venue for these cases. The motion highlights the fact that CVS Caremark is headquartered in Rhode Island, making it a central location for the litigation, which also benefits from convenient transportation access and a relatively light docket.
The lawsuits target a series of agreements allegedly made between the PBMs and GoodRx, starting last year. Under these agreements, GoodRx’s software compares all available discounts for generic prescriptions, directing patients to the PBM with the lowest price. This process allows PBMs to bypass the pharmacies’ own negotiated rates, resulting in lower reimbursements or, in some cases, no reimbursement at all, according to the plaintiffs. The only revenue for independent pharmacies comes from the patient’s direct payment, which is far less than what they would normally receive from PBMs.
“CVS Caremark generally reimburses independent pharmacies at higher levels than chain drugstores, including CVS pharmacies,” said Mike DeAngelis, a spokesperson for CVS Caremark. “These lawsuits are entirely without merit, and we will vigorously defend against them.”
In addition to the Rhode Island case, similar lawsuits have been filed in Los Angeles, near GoodRx’s headquarters, and several pharmacies, including Minnesota’s Keaveny Drug, Michigan’s Community Care Pharmacy, and Florida’s Ethos Wellness Pharmacy, have joined the legal action. The plaintiffs are calling for unspecified damages as well as court orders to halt the allegedly anticompetitive practices.
The move to centralize these cases in Rhode Island could streamline legal proceedings and provide a unified approach to addressing the practices of GoodRx and PBMs, which have drawn increasing scrutiny in recent years. The Federal Trade Commission has previously accused the largest PBMs of driving up the cost of insulin, and the GoodRx-related lawsuits may add momentum to the growing regulatory attention on this sector.
PBMs, which play a central role in negotiating prescription drug prices between insurers, pharmacies, and drug manufacturers, have faced mounting criticism for their market influence. Historically, PBMs have provided discount cards to help patients without insurance reduce out-of-pocket drug costs. However, the new payment arrangements, as outlined in the lawsuits, have left independent pharmacies struggling to compete, while larger chain pharmacies, including CVS, appear to weather the lower reimbursements.
The legal battle is expected to shed light on the practices of PBMs and how they impact competition within the pharmacy industry, particularly for independent pharmacies that provide vital services to local communities.
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