Michigan Attorney General Dana Nessel filed a lawsuit last Thursday against pharmacy benefit managers OptumRX and ExpressScripts for their role in the opioid epidemic in Michigan.
The attorney general alleges in her lawsuit, filed at the 3rd Circuit Court in Wayne County, that OptumRX and ExpressScripts colluded and conspired with opioid manufacturers for years, negotiating with the manufacturers to award favorable placement on their formularies in exchange for financial kickbacks.
OptumRX and ExpressScripts, together with CVS Caremark, hold more than 80% of the Michigan pharmacy benefit market; Nessel entered a national settlement with CVS Caremark in 2023.
“Pharmacies, manufacturers, and pharmacy benefit managers have reaped huge profits during the opioid epidemic, lining their pockets at the expense of Michiganders struggling with substance use disorder,” Nessel said. “I am committed to holding companies accountable for their role in this crisis and ensuring that the well-being of Michigan residents always takes precedence over corporate profits.”
Nessel’s lawsuit alleges claims of Public Nuisance, Negligence, and under the Drug Dealer Liability Act against the pharmacy benefit managers (PBMs).
Specifically, the attorney general alleges the PBMs created common-law and statutory nuisance by allowing and promoting opioid use in Michigan and committed negligence in breaching their own contracts by failing to employ reasonable standards of care in the sale, delivery, and dispensing of opioids.
The attorney general further alleges that the PBMs participated in illegal marketing of a controlled substance and that the People of Michigan were injured by those who abused those substances, establishing a claim under the Drug Dealer Liability Act.
A PBM is a third-party company that functions as an intermediary between insurance providers and pharmaceutical manufacturers, ostensibly to reduce the cost of prescription medication for its clients. It typically negotiates discounts and rebates with drug manufacturers, contracts with pharmacies, and develops and maintains drug formularies, or lists of covered drugs. Because a PBM ultimately decides which drugs it covers, it can bargain for rebates from drug manufacturers who want to get their products on its formularies.
PBMs have been largely unregulated for decades. In the absence of federal regulation, states have stepped up to protect consumers and pharmacies, though they have continued to face challenges from the PBM industry. In February of this year, 39 attorneys general, including Nessel, urged Congress to take further actions to regulate PBMs at the federal level, and in June the attorney general joined a bipartisan coalition of 32 attorneys general in asking the U.S. Supreme Court to rule on states’ authority to regulate PBMs.
According to the Michigan Department of Health and Human Services (MDHHS) between the years 2000 and 2020, the opioid death rate in Michigan increased on average 13.9% each year. According to MDHHS, Michigan reported 2,998 overdose-related deaths in 2022.
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