Florida has sued two of the largest pharmacy-benefit managers — Express Scripts and Prime Therapeutics — alleging the rivals illegally coordinated to fix prices in a way that squeezed the pharmacies dispensing drugs.
Attorney General James Uthmeier filed the suit in state court, alleging violations of Florida’s antitrust and unfair-trade-practices laws.
What a PBM does
Pharmacy-benefit managers are intermediaries sitting between insurers, drug manufacturers and pharmacies. They negotiate prices with manufacturers, decide which drugs a plan covers and on what terms, and — central to this case — set the rates at which pharmacies are reimbursed for the medicines they dispense.
The market is extraordinarily concentrated. A small number of PBMs process the overwhelming majority of US prescription claims, and each is affiliated with a major insurer or retail pharmacy chain. That concentration is the source of the leverage the lawsuit describes.
The arrangement at issue
The complaint centres on a 2019 agreement in which Express Scripts began providing pharmacy-networking and drugmaker-contracting services to Prime.
On its face this is ordinary outsourcing: a smaller PBM buying scale from a larger one. Florida’s allegation is what it enabled. Because Prime was now operating through Express Scripts’ network arrangements, it could lower its reimbursement rates to match — and Prime had previously offered rates roughly 20% higher in order to stay competitive.
The alleged effect was to remove that competitive premium. According to the complaint, reimbursement on some drugs fell by as much as 80% for certain Florida pharmacies.
Why the legal theory is about competition, not price
The claim is not simply that reimbursement is too low — that is a commercial complaint, not an antitrust one. It is that two competitors used an intermediary arrangement to align their pricing behaviour.
Competition law is most concerned with rivals coordinating rather than competing. Where one competitor previously paid more to attract pharmacies to its network, and a services agreement caused that differential to vanish, the state alleges the arrangement functioned as coordination whatever its stated purpose.
Express Scripts covers roughly one in three Americans, giving it the leverage to demand low rates. The allegation is that Prime obtained the benefit of that leverage rather than continuing to compete against it.
Why pharmacies cannot simply refuse
The obvious question is why a pharmacy accepts an 80% reduction. The answer is the structure of the market.
A pharmacy that declines a PBM’s terms is excluded from that network, meaning patients covered by it cannot fill prescriptions there. With a handful of PBMs covering most insured Americans, exclusion from even one is a substantial loss of business. Contracts are frequently offered on take-it-or-leave-it terms, and reimbursement can be adjusted after the fact.
Independent pharmacies, without the scale or diversified revenue of chains, have the least ability to absorb this — and closures have been concentrated among them, with the sharpest consequences in rural areas where the closing pharmacy may be the only one.
Not an isolated action
PBMs are under sustained scrutiny nationwide over their opaque role in drug pricing, and this specific arrangement has drawn earlier challenges: a Wisconsin class action, later dismissed, and a suit last month by nearly 5,000 independent pharmacies.
States have become the most active front. Federal legislation on PBM transparency has repeatedly stalled, and a Supreme Court decision several years ago confirmed states’ authority to regulate PBM reimbursement practices — opening the way for state laws and enforcement actions that have multiplied since.
The response
Prime defended the partnership, saying “savings generated by PBMs ultimately trickle down to patients.” Express Scripts did not comment by publication.
That defence is the industry’s standard position and the crux of the dispute. PBMs argue they extract discounts that lower costs; critics argue the savings are captured in the intermediary layer rather than reaching patients — and the difficulty of resolving that empirically is itself a consequence of how little of the flow is disclosed.
What is at stake
An allegation of coordination between rival PBMs, if proven, is more serious than the transparency complaints that dominate the debate. Opacity is a policy problem; agreements between competitors that suppress prices paid to suppliers are a legal one, with damages attached.
Why reimbursement disputes are so hard to adjudicate
One structural feature explains why these cases proliferate and why they are difficult: almost nobody outside the contracting parties can see the numbers.
PBM contracts are confidential, reimbursement formulas are proprietary, and the rate a pharmacy receives for a given drug can differ between plans, between PBMs and over time under adjustment mechanisms applied after the transaction. A pharmacy frequently cannot determine in advance what it will be paid for dispensing a medicine, which is an unusual position for any business.
That opacity cuts both ways in litigation. It makes conduct difficult for regulators and plaintiffs to characterise without discovery, and it makes industry claims about savings passed to patients difficult to verify or refute. Much of the political energy behind PBM reform has therefore concentrated on disclosure requirements rather than on price regulation — on the theory that the arrangement cannot be evaluated until it can be seen.
For pharmacies the immediate stake is reimbursement rates that determine whether dispensing is viable. For patients, it is whether a pharmacy remains within reach. Business and legal news; allegations in a complaint are not findings.