A federal appeals court on Monday refused to revive a lawsuit alleging Anthem and Express Scripts overcharged employer plan beneficiaries for prescription drugs.
The allegations stem from Anthem’s decision to sell three of its pharmaceutical benefit management companies to Express Scripts in 2009, when it also entered a 10-year PBM agreement with the company. Those moves meant their employer-based insurance customers would pay more for prescription drugs, according to the lawsuit that sought class action status. The plaintiffs alleged the companies violated the Employee Retirement Income Security Act.
But the 2nd U.S. Circuit Court of Appeals ruled that Anthem didn’t owe the plans any fiduciary duty in those transactions. The case, which was filed in June 2016 had been dismissed by a federal district judge in January 2018.
“This court previously found that the decision to sell a corporate asset is not a fiduciary decision – even if the sale affects an ERISA plan,” the Second Circuit wrote. “Anthem did not act as an ERISA fiduciary when it entered into the NextRx and PBM agreements, even though its decisions may ultimately affect how much plan participants pay for drug prices.”
Although Express Scripts would have discretion to set prescription drug prices, the court recognized that those prices are set under contracts, and they have limited discretion.
“Even fully crediting plaintiffs’ allegations that the PBM agreement provided Express Scripts with extraordinarily broad discretion in setting prescription drug prices, at bottom the ability to set such prices is a contractual term, not an ability to exercise authority over plan assets.”
The plaintiffs, which include Stamford Health and several individuals, could appeal the decision to the Supreme Court.