By Brendan Pierson
Jan 23 (Reuters) - Oklahoma's attorney general has accused CVS's CVS.N Caremark pharmacy benefit manager unit of under-reimbursing pharmacies for prescription drugs.
The complaint, announced Thursday by Oklahoma Attorney General Gentner Drummond, marks the first case against a pharmacy benefit manager brought before an administrative law court within the attorney general's office. The administrative procedure for enforcement actions against pharmacy benefit managers was established in November 2023.
Pharmacy benefit managers, or PBMs, act as intermediaries between drugmakers and consumers. They negotiate volume discounts, or rebates, and fees with drugmakers, create lists of medications covered by insurance, and reimburse pharmacies for prescriptions.
The complaint identifies 200 individual prescriptions for which Caremark paid 15 independent Oklahoma pharmacies less than the drugs' acquisition cost, violating Oklahoma law. The law allows the state to seek restitution from a PBM on behalf of pharmacies that were underpaid, impose a fine of up to $10,000 per violation and revoke the PBM's license to operate in the state.
"Collectively, these pharmacies lost thousands of dollars to fill these prescriptions and help patients get the medications they needed," Drummond said in a statement. "It is critical that we have a safe and fair marketplace for pharmaceuticals in Oklahoma."
"Caremark delivers value daily to our Oklahoma clients and their members," CVS Caremark said in a statement. "We are reviewing the allegations in the complaint and will respond to them in due course."
PBMs have drawn scrutiny from state authorities in recent years for their role in prescription drug pricing and availability. All 50 states passed at least one law directed at PBMs between 2017 and 2023, according to a U.S. Government Accountability Office report.
The laws include measures aiming to ensure that PBMs do not underpay pharmacies, charge patients excessive co-pays or discriminate against independent pharmacies.
States including Vermont, Hawaii, California, Ohio and Kentucky have filed lawsuits alleging that PBMs inflate prescription drug prices to boost their profits.
The U.S. Federal Trade Commission said in a Jan. 14 report that the three largest PBMs - Caremark, UnitedHealth Group's Optum, and Cigna's Express Scripts - netted $7.3 billion in revenue by marking up the prices of certain drugs.
The case is State of Oklahoma v. Caremark, PBM-2025-0001, Administrative Court, Office of Oklahoma Attorney General.
For Oklahoma: Michael Leake and Mackenzie Kennedy of the Attorney General's office
Read more:
US FTC finds major pharmacy benefit managers inflated drug prices for $7.3 billion gain
Vermont latest state to sue PBMs for allegedly driving up drug prices
(Reporting By Brendan Pierson in New York)
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