Just over a year ago, Walgreens and Prime Therapeutics, the nation’s fourth largest pharmacy benefit manager, formed a new retail pharmacy network. The venture combined Walgreen’s “brick and mortar” pharmacies with Prime’s mail-order network.
In a press release issued at the time, the newly-formed joint venture indicated that Prime would continue to support client-specific network choices for health plans, but that Walgreens would become the “core participant in Prime’s national preferred pharmacy network beginning January 1, 2017.”
According to a complaint filed in U.S. District Court for the Northern District of Illinois late last week by Chicago-based pharmacy J&S Community Pharmacy Inc. (“J&S”), however, the new business did more than create a preferred network. The J&S suit argues that the pharmacy giant and it’s new PBM partner are actively working to push “Mom and Pop” pharmacies out of the marketplace by kicking community pharmacies out of pharmacy benefit plans that cover Medicare, Medicaid and Blue Cross and Blue Shield patients—all in violation of antitrust laws. For these violations, and other enumerated causes of action, J&S is claiming $1.5 billion in damages.
The J&S complaint states that it was first audited by Prime in 2016 and was told at the time that it owed more than $45,000 for missing invoices. J&S appealed the decision via the process in place under their contract with Prime but lost, with Prime recouping the money from the pharmacy’s insurance claims. Not long thereafter, Prime terminated J&S’s participation in Prime administered plans, going so far as to notify J&S customers of the termination and suggesting that they fill prescriptions at Walgreens instead. J&S indicates in the complaint that nearly 75 percent of its customers rely on the plans it was eliminated from participating in for their prescription coverage.
J&S argues that the termination was pretextual and designed to increase Prime’s and Walgreen’s share of the prescription drug market by eliminating J&S as a competing pharmacy and funneling the business to Walgreens. The suit also alleges that Prime has used similar tactics against other local pharmacies.
Neither Walgreens nor Prime has responded at this time to the allegations contained in the J&S lawsuit.