Express Scripts enters into $9.3 million settlement with states

Chris Rizo May 27, 2008, 11:55am

Tom Corbett

ST. LOUIS, Mo. (Legal Newsline)-One of the nation's largest pharmacy benefits management companies has reached a multi-state settlement, resolving claims of deceptive business practices.

Express Scripts Inc., a pharmacy benefits management company, reached the settlement with 29 states. The St. Louis-based company has more than 50 million customers nationwide.

As part of the settlement, Express Scripts is required to pay $9.3 million to the states and up to $200,000 in reimbursement to patients who incurred expenses related to switches between cholesterol-controlling drugs.

Specifically, the states allege that Express Scripts engaged in deceptive business by overstating the cost benefits of switching to certain preferred medications.

"Today's settlement puts an end to Express Scripts' misleading business practices and takes the necessary steps to protect health plans and patients," Pennsylvania Attorney General Tom Corbett said.

In a statement, Express Scripts said it has "implemented and continually refined its procedures to ensure that any drug switches were safe and appropriate, and intended lower costs for both its clients and plan sponsors."

The settlement bars Express Scripts from soliciting drug switches when:
- the net drug cost of the proposed drug exceeds the net drug cost of the originally prescribed drug;
- the originally prescribed drug has a generic equivalent and the proposed drug does not;
- the originally prescribed drug's patent is expected to expire within six months; or
- the patient was switched from a similar drug within the last two years.

The settlement also requires Express Scripts to, among other things, inform patients and prescribers what effect a drug switch will have on a patient's co-payment; inform prescribers of Express Scripts' financial incentives for certain drug switches; and reimburse patients for out-of-pocket expenses for drug switch-related health care costs.

"Doctors and patients need to be told the truth about how their prescription drug choices will affect their health and their pocketbook," said Washington Attorney General Rob McKenna, a Republican.

The $9.3 million settlement will be apportioned among the states and the District of Columbia and $200,000 will be allocated for payments not to exceed $25 each to patients for physician visits and tests related to the drug switches.

Twenty states in 2004 settled with Medco Health Solutions, Inc., the world's largest pharmaceutical benefits manager. More recently, in February, 29 states settled with Caremark Rx, LLC, another large pharmaceutical benefits managers.

Participating in the settlement were attorneys general from 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.

From Legal Newsline: Reach reporter Chris Rizo by e-mail at

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