Prime Therapeutics ordered to pay $10 million for price fixing
(FOX 9) - Eagan-based Prime Therapeutics has been ordered to pay $10 million in damages after federal arbitration found it engaged in illegal price fixing with competitor Express Scripts to suppress drug reimbursement rates for HIV/AIDS treatments.
The impact
Why it Matters: :
Prime Therapeutics negotiates drug prices for insurance plans. The arbitration found that Prime collaborated with a competitor, Express Scripts, in this price fixing agreement. And the ruling stated that Prime violated federal and Minnesota anti-trust laws in the process.
Increased Scrutiny on Pharmacy Benefit Managers
The backstory:
Prime Therapeutics and Express Scripts are both Pharmacy Benefit Managers or PBMs. The Federal Trade Commission is investigating the industry which is often in the same ownership chain with insurance companies. The federal investigation alleges that PBMs are inflating generic drug prices by 1,000 percent or more and squeezing out small, independent pharmacies.
Dig deeper:
FOX 9 has been following the Federal Trade Commission investigation and filed this story in December with a look at how independent pharmacies were being impacted. You can also click here to read the full Prime Therapeutics ruling.
Reaction
Statement from the AIDS Healthcare Foundation
What they're saying:
"Through this case and with this ruling, the Prime-ESI ‘collaboration’ has been clearly exposed as per-se-illegal horizontal price-fixing—the cardinal sin of antitrust law and felonious behavior that government antitrust enforcement agencies, including the FTC, the Department of Justice’s Antitrust Division, and U.S. State Attorneys General, should help put a nationwide end to immediately, for all victims," said Jonathan M. Eisenberg, AHF’s Deputy General Counsel-Litigation and lead counsel for AHF in the arbitration. "We are fearful that Prime and/or ESI now will retaliate against AHF by kicking AHF out of their pharmacy networks. However, AHF took this risk in the pursuit of justice to expose the illegal price-fixing ‘collaboration,’ not just for ourselves but to speak out on behalf of everyone affected by this ongoing criminal activity, including thousands of independent pharmacies and tens of millions of patients across the United States."
Statement from Prime Therapeutics
What they're saying:
In the arbitration brought by the AIDS Healthcare Foundation (AHF), Prime demonstrated how actual patients saved on prescription drugs as a result of the agreement. With this ruling, AHF is seeking to rewind the clock to cause patients living with HIV/AIDS to pay more – not less – at their pharmacy and thereby enrich AHF’s bottom line. We strongly disagree with the arbitrator’s ruling in the case and the adverse impact it will have on individuals relying upon AHF for lifesaving medicine.