Express Scripts Sued by AHF Over ‘Claw Backs’

Sweeping federal lawsuit, asserting 14 claims of violations of law in nine U.S. states where AHF operates pharmacies, was filed in federal court in St. Louis, MO

AHF asserts Express Scripts, a huge pharmacy benefits manager, manipulates loophole in Medicare “Star Ratings” system as purported justification for “clawing back” millions of dollars of Medicare benefits from AHF pharmacies, creating higher profits for Express Scripts at the expense of patients

LOS ANGELES--(BUSINESS WIRE)--AIDS Healthcare Foundation (AHF), the largest global AIDS organization, which cares for over 100,000 individuals living with HIV or AIDS in the United States, filed a lawsuit in the U.S. District Court for the Eastern District of Missouri, Eastern Division, against Express Scripts, one of the three dominant U.S. pharmacy benefits managers (PBMs), and a subsidiary of Cigna, the $47-billion global health-insurance behemoth. The case, AIDS Healthcare Foundation v. Express Scripts, Inc. (Case No. 4:22-cv-00743), was filed yesterday.

AHF is the owner of the “AHF Pharmacy” chain of pharmacies, serving primarily people of limited economic means living with HIV/AIDS. Because Express Scripts manages pharmacy benefits for – and effectively controls access to – tens of millions of people with health insurance in the United States, Express Scripts has much greater bargaining power than much smaller community and specialty pharmacies like AHF’s (even in small chains). Express Scripts offers AHF and other pharmacies essentially “take-it-or-leave-it” contracts with terms and conditions excessively favorable to Express Scripts and deleterious to AHF. Pharmacies like AHF must accept these contracts or lose access to countless patients.

Specifically, AHF asserts that Express Scripts manipulates the Medicare “Star Ratings” system – which is used to score insurance plans – to give unfairly low “performance” scores to participating pharmacies, and that, as a result of these arbitrary low scores, the PBM then ‘claws back’ Medicare benefits from pharmacies—often months and years after the fact—actions that result in higher profits for Express Scripts at the expense of HIV/AIDS and other patients served by AHF and other independent and mom-and-pop pharmacies.

“AHF brought this civil action to recover many millions of dollars taken by Express Scripts, purportedly pursuant to unconscionable contracts with AHF yet in violation of those very contracts and the covenant of good faith and fair dealing implied in those contracts, among other violations of AHF’s rights,” said Andrew F. Kim, AHF’s lead counsel on the matter.

AHF asserts 14 counts of Express Scripts law violations in nine U.S. states where AHF operates pharmacies. Among the counts are “unfair” or “deceptive” trade or business practices in California, Florida, Louisiana, New York, and Washington state. Five other counts assert violations of “any willing provider” laws in Georgia, Illinois, Louisiana, Mississippi, and South Carolina.

AHF is demanding a jury trial in the case, which was filed by AHF in-house counsel and Kim Riley Law.

AIDS Healthcare Foundation (AHF), the largest global AIDS organization, currently provides medical care and/or services to over 1.6 million individuals in 45 countries worldwide in the US, Africa, Latin America/Caribbean, the Asia/Pacific Region and Eastern Europe. To learn more about AHF, please visit our website: www.aidshealth.org, find us on Facebook: www.facebook.com/aidshealth, follow us @aidshealthcare or subscribe to our AHF podcast “AHFter Hours.”