Express Scripts, CVS Health cut ties with controversial pharmacies

The nation’s largest benefit managers have cut ties with at least eight pharmacies amid growing scrutiny of the drugmaking industry, according to Reuters.   

Express Scripts and CVS Health, the two largest benefits managers in the U.S., have each terminated contracts with multiple pharmacies that they say work too closely with drug companies. At least a half-dozen partnerships have been severed in the last week, prompting multiple lawsuits by the pharmacies.

{mosads}Benefit managers have been pressed to take a deeper look at their models in the wake of the controversy surrounding Valeant Pharmaceuticals. That company, which has been accused of inflating drug prices to increase profits, disclosed late last month that one pharmacy accounted for about 7 percent of its sales.

It’s now under investigation by multiple state investigators as well as two congressional probes.

Philidor Rx Services, the pharmacy that worked most closely with Valeant, has been accused of convincing insurers to pay full-price for pricey Valeant drugs despite the availability of cheaper alternatives.

“What we had not been aware of, until really the last year, was these type of pharmacies that have a really high proportion of sales from a drugmaker and it was not out in the open,” Everett Neville, senior vice president of supply chain at Express Scripts Holding Co., told Reuters.

Express Scripts, which manages benefits for tens of millions of people, said it learned through a recent audit which of its partner pharmacies had focused heavily on one drugmaker.

This week, both Express Scripts and Optum Rx — the third-largest benefits manager — were sued by pharmacies that saw contracts terminated.