Pharmacy First, a network of more than 2,300 independent pharmacies in the U.S., is suing pharmacy benefit manager Express Scripts for limiting its market.
Here are four things to know:
1. The group filed the lawsuit in Federal Court.
2. It alleges Express Scripts excluded Pharmacy First and other Pharmacy Services Administration Organizations from its network. Express Scripts includes just four PSAOs in its network, which Pharmacy First claims the PBM "handpicked."
3. "By capturing those four PSAOs and using them to further Express Scripts' interests, Express Scripts transformed what was once a much-needed advocate and bargaining agent for independent pharmacies into an agent of Express Scripts," reads a Pharmacy First press release announcing the lawsuit.
4. The group alleges Express Scripts imposed "punitively-low and non-negotiable reimbursement rates, network restrictions, and additional administrative burdens." This ultimately narrowed patients' pharmacy choice to only a few Express Scripts-approved vendors.
"Express Scripts' attempt to capture and control the PSAO market is a stark example of what is wrong with the PBM business model," Bob Dickey, CEO of Pharmacy First, said in a press release. "The relentless consolidation of PBMs has increased PBM power over not just independent community pharmacies but also chain drug stores, drug manufacturers, drug wholesalers and many others in the healthcare supply chain. These actions will ultimately increase costs, reduce access, choice and convenience, and provide a new path to extract even more concessions from independent pharmacies that will further erode reimbursements and threaten the existence of many independents that are in small towns and rural communities across the country."
5. Express Scripts told Becker's Hospital Review it stands by its decision to end its contractual relationship with Pharmacy First and is not requiring pharmacy providers that are affiliated with Pharmacy First to disaffiliate from it. It called the lawsuit "frivolous" and said it will "defend itself vigorously [against] this action."
6. Express Scripts said it performed an extensive review in 2017 of each PSAO it contracted with and found Pharmacy First underperformed compared to similar PSAOs. Express Scripts said Pharmacy First "had a higher percentage of compliance issues as compared to pharmacies affiliated with other PSAOs. [It] also routinely failed to comply with its contractual obligations to Express Scripts."
"Ultimately, Express Scripts chose four PSAOs to re-contract with that Express Scripts felt would ensure accountability in care for members, adhere to their contractual obligations, oversee and manage their member pharmacies, and provide savings to our clients and their members. [Pharmacy First] was not a selected PSAO as it fell short in each of these areas," the company told Becker's.
Editor's note: This article was updated June 27 to include additional information.