Prime Therapeutics Fails to Silence AHF in PBM Price-Fixing Arbitration

Arbitrator denies gag order motion against AIDS Healthcare Foundation for second time

LOS ANGELES--(BUSINESS WIRE)--AIDS Healthcare Foundation (AHF), the leading provider of health care to people living with HIV/AIDS around the world, won another legal battle in an American Arbitration Association arbitration against Prime Therapeutics LLC, one of the nation’s largest pharmacy-benefit managers (PBMs).

On Friday, July 26, Arbitrator Stuart M. Widman denied Prime’s motion seeking a gag order and monetary sanctions against AHF for issuing a press release about the nonprofit’s price-fixing case against the PBM. AHF has sued Prime over its questionable business “collaboration” with Express Scripts, Inc. (“ESI”), a direct business competitor, which has harmed AHF and other independent pharmacies.

On July 10, Prime lost a motion for summary adjudication of the case. After Arbitrator Widman issued that ruling, AHF issued a press release welcoming it. That exercise of free speech prompted Prime to seek a gag order, which was denied.

“Prime tried to silence AHF for commenting about the arbitration proceedings, which Prime wants to be completely confidential,” said Jonathan M. Eisenberg, AHF’s Deputy General Counsel – Litigation and lead counsel for AHF in the arbitration. “But Arbitrator Widman confirmed that AHF did not warrant a gag order because AHF had not disclosed any truly confidential Prime information. Arbitrator Widman even pointed out that AHF had accurately reported that he was ‘leaning toward’ finding that the Prime-ESI ‘collaboration’ is per-se-illegal price-fixing.”

Last summer (2023), after AHF prevailed against Prime’s motion to dismiss the case and AHF issue a press release about that victory, Prime similarly asked the prior arbitrator, the Hon. David R. Cohen, to make AHF retract the press release and make the arbitration proceedings completely confidential. Arbitrator Cohen denied that request.

Background

As a PBM, Prime is a “middleman” in the distribution system for prescription drugs in the United States.¹ Prime acts as an intermediary between health insurers and pharmacies, as well as pharmaceutical manufacturers. Prime boasts of administering the pharmacy-benefits components of health insurance plans for about 38 million people in the United States. Many of those people are patients of AHF pharmacies.

Since April 2020, Prime deliberately has been aligning its pharmacy reimbursement rates with those set by ESI. The two PBMs no longer are competing on price to attract pharmacies into provider networks. This scheme harms not only AHF and other pharmacies directly but also harms patients and the entire prescription drug pipeline.

• July 26, 2024, Prime/AHF Arbitration: Ruling on Motion for Protective Order And Monetary Sanctions link

• July 10, 2024, Prime/AHF arbitration summary adjudication ruling link

AIDS Healthcare Foundation (AHF), the world’s largest HIV/AIDS healthcare organization, provides cutting-edge medicine and advocacy to more than 2 million individuals in 47 countries in the US, Africa, Latin America/Caribbean, the Asia/Pacific Region, and Eastern Europe. To learn more about AHF, visit us online at AIDShealth.org, find us on Facebook, follow us on Instagram and Twitter, and subscribe to our Ahfter Hours podcast.

¹ Note: Prime is, in fact, owned by a group of Blue Cross and/or Blue Shield health insurers.