Litigation Alleging Fraud, Deceptive Practices by PBMs

The major pharmacy benefit managers, or PBMs, have paid $370 million to settle claims of deceptive practices or fraud over the past decade, with other cases pending.

"The health benefit provider, however, often has no idea that a PBM may not be working in its interest. This lack of awareness is the result of the fact that there is little transparency in a PBM's dealings with manufacturers and pharmacies." – First Circuit Court of Appeals, 2005.

Plaintiffs have included the attorneys general of dozens of states, unions, private industry, pharmacists and others. In many ways, the cases are symptomatic of the lack of regulatory oversight of the PBM industry as well as the absence of meaningful transparency for PBM clients into pharmacy benefits management.

The specific charges relating to fraud and deceptive practices have included:

  • Switching patients to more expensive drugs to pad profits;
  • Shipping or billing for medication that was never ordered;
  • Breaching contractual/fiduciary responsibilities;
  • Soliciting and receiving kickbacks from pharmaceutical manufacturers;
  • Inflating the costs of generic drugs; and
  • Cancelling prescriptions.
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