On July 13, 2020, Cohen Milstein, serving as Special Counsel to the Ohio Attorney General David Yost, filed a breach of contract lawsuit on behalf of Ohio Highway Patrol Retirement System (HPRS), against Express Scripts, Inc. (ESI), a pharmacy benefit manager (PBM) in Franklin County Court of Common Pleas.
Plaintiff claims, among other things, that Defendant ESI breached its Agreement with HPRS, breached the duty of good faith and fair dealing that exists in all contracts under Ohio law, and failed to observe its fiduciary duties to Plaintiff HPRS by improperly adjudicating claims which resulted in significant overcharges to HPRS.
On or about January 1, 2013, Plaintiff HPRS and Defendant ESI entered into the Pharmacy Benefit Administration and Management Services Agreement, which was amended on four separate occasions between 2016 – 2018.
The Agreement obligates Defendant ESI to provide Plaintiff HPRS with pharmacy benefit management services, including contracting with pharmacy networks to disburse covered medications to HPRS beneficiaries, processing claims, providing mail pharmacy services, managing the formulary and rebate recovery, and collecting data relating to pharmacy claims.
In performing these services, the Agreement expressly obligates Defendant ESI to act as a fiduciary in the performance of its claims adjudication functions and requires Defendant ESI to act in the “best interests” of Plaintiff HPRS and to “employ its expertise, knowledge and experience with integrity and fidelity . . . to derive the lowest net cost” for the drugs covered and available under Plaintiff’s plan for its members.
Plaintiff claims that Defendant ESI repeatedly breached the Agreement by overcharging Plaintiff HPRS. Specifically, Plaintiff alleges that ESI: failed to meet the pricing discount and dispensing fee guarantees; misclassified generic drugs as brand drugs to charger higher prices; overcharged for generic drugs by failing to timely adjust generic pricing lists to accurately reflect the lowest available pricing; failed to disclose ESI’s sources of renumeration received in connection with its performance of services for ESI; and failed to perform services for HPRS as required by the Agreement.
Plaintiff further claims that Defendant ESI has never corrected these costly overcharges despite its express duty to act in the “best interests” of Plaintiff HPRS to accurately adjudicate claims and apply the “lesser of” pricing provisions contained in the Agreement.
Defendant ESI’s breaches have caused Plaintiff HPRS to overpay Defendant ESI throughout the term of the Agreement. All the while, Defendant ESI silently pocketed millions of dollars in overcharges.
Plaintiff HPRS seeks compensatory damages and punitive damages.
Case name: Ohio Highway Patrol Retirement System v. Express Scripts, Inc., Case No. AM-20CV004504, Court of Common Pleas, Franklin County, Ohio