The complaint identifies utilization-management programs and drug formularies available to PBMs to monitor drug distribution.
On October 24, 2024, the Michigan Attorney General’s Office filed suit against OptumRx Inc. and Express Scripts Inc. (ESI), two of the nation’s largest pharmacy benefit managers (PBMs), alleging that they colluded with drug manufacturers to oversupply opioids and turned a blind eye for years to a growing opioid crisis. The 210-page complaint details several decades of alleged acts in connection with the manufacturing, advertising and sale of opioids and the harm such alleged acts have caused for Michigan residents. At present, only a few such complaints have been filed by state attorney general offices arguing that PBMs used their influence to profit from the opioid crisis.
Specifically, the complaint’s primary allegations are that Optum and ESI both promoted opioid distribution for their own profit and failed to use the tools at their disposal to combat opioid overuse after the crisis became apparent. The complaint identifies utilization-management programs and drug formularies available to PBMs to monitor drug distribution.
Further, according to the complaint, the PBMs not only failed to implement such safeguards against over-utilization of opioids, they actually implemented tools and policies steering their members to utilize opioids in lieu of safer, more medically appropriate alternative medications. Notably, the Michigan complaint also cites alleged internal communications within Optum and ESI suggesting that, as early as the late 1990s, these PBMs were aware that opioids were more addictive and dangerous than their marketing suggested, but assisted opioid manufacturers in disseminating safety information about the opioids they knew was false.
The Michigan complaint is filed amidst widespread scrutiny PBMs have recently received at both the state and federal levels. On the federal level, the Federal Trade Commission has been investigating the nation’s six largest PBMs over allegations of anticompetitive conduct for over two years, an investigation that resulted in a lawsuit against Optum, ESI and Caremark on September 20, 2024. Attorney General Nessel’s lawsuit shares many factual allegations with the FTC’s suit, including claims of market consolidation and allegations of rebate misuse. See our prior Alert for a timeline of major events in the FTC-PBM feud. At the state level, attorneys general in Arkansas, Alaska, Kentucky and Mississippi have filed similar lawsuits alleging that PBMs played an active role in the opioid crisis.
Though this case is in one sense just another step in the ongoing public scrutiny of PBMs, several legal aspects of this suit are important to note―especially the appropriateness of jurisdiction for this litigation in Michigan (the alleged conduct took place across the country, not just in Michigan) and standing (the attorney general sued on parens patriae grounds). Thus, the Michigan litigation will be important to follow based on both the legal and practical issues presented by it. Questions of jurisdiction and standing are likely to be key in this and future matters that may be initiated by attorney general offices against PBMs arising out of their roles in the opioid crisis. The answers to those questions will certainly impact the extent to which other government agencies seek redress in court against PBMs for allegedly putting their profits before the health and welfare of their members.
For More Information
If you have any questions about this Alert, please contact Jonathan L. Swichar, Bradley A. Wasser, Taylor Hertzler, any of the attorneys in our Pharmacy Litigation Group, any of the attorneys in our Health Law Practice Group or the attorney in the firm with whom you are regularly in contact.
Disclaimer: This Alert has been prepared and published for informational purposes only and is not offered, nor should be construed, as legal advice. For more information, please see the firm's full disclaimer.