Washington, D.C. — In response to a new lawsuit from Ohio Attorney General Dave Yost’s targeting pharmacy benefit manager Express Scripts and its allies for collusion, the American Economic Liberties Project released the following statement.

“Ohio Attorney General Yost’s landmark lawsuit rightly exposes the PBM industry for what it is: a modern-day mafia that is jacking up drug prices and abusing patients and pharmacists,” said Sara Sirota, Policy Analyst at the American Economic Liberties Project. “Yost offers convincing evidence that Express Scripts, Prime Therapeutics, Ascent, and Humana colluded abroad to price gouge patients who struggle to afford essential medications. Congress must investigate PBMs’ use of overseas havens and finally outlaw the industry’s harmful exemption from the Anti-Kickback Statute and other anti-competitive conduct without any exceptions or loopholes. The FTC should continue its important work to rein in PBM abuse. And if this price fixing scheme is as wide ranging as it appears, handcuffs as well as civil charges are warranted.”

Pharmaceutical Benefit Managers — or PBMs — are middlemen in the prescription drug markets that represent insurers in price negotiations and financial transactions with manufacturers, wholesalers, and pharmacies. Their array of corrupt incentives and conflicts of interest are contributing to the drug affordability crisis and pharmacy desserts that increasingly characterize the American healthcare system today.

Since just three companies control 80 percent of the PBM market, including Express Scripts, they effectively get to choose the winners and losers of the drug industry. They generate revenue by steering patients towards higher-cost medications, which guarantees them larger rebates, and by stealing margin from pharmacies. Lastly, PBMs are integrated with some of the largest insurance companies, physician networks, and drugstore chains, giving them perverse incentives to under-reimburse their rivals.

Fortunately, policymakers across government are taking action to combat these “gangsters” in defense of the American public. In June 2022, the FTC began work on a new PBM study that will allow the agency to correct its previous misunderstandings of the industry and usher in a new chapter to protect fair competition in the pharmaceutical space. Members of Congress, state legislators and attorneys general like Ohio AG Yost, are similarly investigating the industry.

To learn more about pharmacy benefit managers, read Economic Liberties “The Pharmacy Benefit Mafia” or watch “How PBMs Impact Drug Prices, Communities, and Patients,” a 2022 event featuring FTC Chair Lina Khan, Senator Sherrod Brown (D-OH), Congressman Buddy Carter (GA-01), and the National Community Pharmacists Association.

Learn more about Economic Liberties here.

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