On Monday, Anthem filed a lawsuit against Express Scripts Holding Co. over prescription drug prices. Anthem said in a statement that it wants to recover damages for drug prices that are higher than competitive benchmarks.
According to NPR, the Blue Cross-Blue health insurer Anthem wants to make some changes in its contract with Express Scripts, which handles drug benefits for 80 million individuals. Anthem said that it is not benefiting from rebates the pharmacy benefit manager (PBM) has negotiated with drug manufacturers and added it is overpaying for pharmaceuticals.
CEO Joseph Swedish said in January that Anthem could save as much as $3 billion in drug costs by changing the agreement with Express Scripts. Anthem threatens the pharmacy benefit manager that if it doesn't get the price breaks it wants, then the insurer will end its contract. Meanwhile, Express Scripts spokesman Brian Henry believes that Anthem is not entitled to $3 billion.
Anthem informed the customers that the federal lawsuit doesn't change the way they get prescriptions filled, reports ABC News. Pharmacy benefits managers or PBMs handles drug plans for government agencies, insurers, employers, and other clients. PBM uses their massive purchasing power to negotiate on price.
Modern Healthcare reported that Anthem is also seeking $150 million in compensation related to operational breaches. Prices of pharmaceuticals are among the most nontransparent aspects of the perplexing industry of health care and almost nobody pays the retail price for prescription drugs.
In 2011, Express Scripts said that it was in the middle of a contract dispute with Anthem, which was named WellPoint then, and that Anthem had raised the possibility of litigation. Anthem informed Express Scripts that they obligated to negotiate in good faith to make sure that Anthem receives competitive pricing, however, PBM has
Monday's trading says that shares of Express Scripts fell 63 cents to $68.84 while Anthem's dropped nearly 2 percent or $2.58 to $140.10.
