Attorney General Dana Nessel at the Mackinac Policy Conference, May 29, 2024 | Susan J. Demas
Michigan Attorney General Dana Nessel filed suit Thursday against a pair of pharmacy benefit managers for their role in the opioid epidemic in Michigan.
The lawsuit, filed in Wayne County’s 3rd Circuit Court, alleges that OptumRX and ExpressScripts colluded and conspired with opioid manufacturers for years, negotiating for financial kickbacks from the manufacturers in exchange for favorable placement on their formularies.
“Defendants owed and continue to owe the People of the State of Michigan common law and statutory duties to employ reasonable standards of care in the sale, delivery, dispensing, promotion, and gatekeeping control of the supply of highly addictive, dangerous opioids,” stated the lawsuit. “This includes a duty to not create a foreseeable risk of harm or injury.”
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It continued by noting that the defendants “breached these duties by promoting opioid over-use and by facilitating access to opioids through their standard formulary and utilization management offerings and their mail order pharmacies, setting in motion a force that created an unreasonable and foreseeable risk of harm and peril for the People of the State of Michigan. In so doing, the Defendants acted with actual malice.”
According to a release from the AG’s office, OptumRX and ExpressScripts, both based in Delaware, together with CVS Caremark, hold more than 80% of the Michigan pharmacy benefit market; Nessel entered a national settlement with CVS Caremark in 2023.
“Pharmacies, manufacturers, and pharmacy benefit managers have reaped huge profits during the opioid epidemic, lining their pockets at the expense of Michiganders struggling with substance use disorder,” Nessel said. “I am committed to holding companies accountable for their role in this crisis and ensuring that the well-being of Michigan residents always takes precedence over corporate profits.”
According to the Michigan Department of Health and Human Services (MDHHS) between 2000 and 2020, the opioid death rate in Michigan increased on average 13.9% each year, with the MDHHS reporting 2,998 overdose-related deaths in Michigan in 2022.
A Pharmacy Benefit Manager (PBM) is a third-party company that functions as an intermediary between insurance providers and pharmaceutical manufacturers, with the goal of reducing the cost of prescription medication for its clients. PBMs typically negotiate discounts and rebates with drug manufacturers, contracts with pharmacies, and develop and maintain drug formularies, or lists of covered drugs.
Because a PBM ultimately decides which drugs it covers, it can bargain for rebates from drug manufacturers who want to get their products on its formularies.
PBMs have not been subject to much regulation through the years, prompting an investigation by the Federal Trade Commission, which concluded “these powerful middlemen may be profiting by inflating drug costs and squeezing Main Street pharmacies.”
Meanwhile, states have had to turn to litigation to make up for the lack of federal regulation. In February of this year, 39 attorneys general, including Nessel, urged Congress to take further actions to regulate PBMs at the federal level, and in June the Attorney General joined a bipartisan coalition of 32 attorneys general in asking the U.S. Supreme Court to rule on states’ authority to regulate PBMs.
“Since taking office in 2019, Attorney General Nessel has focused intently on combating the opioid epidemic and holding accountable those responsible for creating and fueling the crisis, resulting in over $1.6 billion dollars to Michigan governments through settlements with McKinsey & Co, Distributors (Cardinal Health, McKesson, Inc., and AmerisourceBergen), Janssen Pharmaceuticals, Teva Pharmaceutical, Allergan Pharmaceutical, CVS, Walmart, and Walgreens,” stated the press release. “The money is distributed to the state and local units of government for Opioid-use disorder treatment and remediation.”
In March, Nessel’s office launched a new website dedicated to the distribution of opioid settlement monies. The website has information for residents and local units of government, including an opioid settlement payment estimator, searchable by individual settlement, municipality, and year of receipt.
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