Express Script Inc. To Pay States 9.3 Million, Offer Restitution For Customers

Texas Attorney General Greg Abbott joined 28 other states to settle an investigation of Express Scripts Inc.'s deceptive drug-switching practices involving cholesterol-controlling medications. The $9.3 million settlement with one of the nation's largest pharmacy benefits management companies also requires Missouri-based Express Scripts to change its business practices and implement numerous consumer protections.

As part of this national settlement, Express Scripts will set aside a $200,000 fund to reimburse the co-pays of certain consumers if they were switched from one drug to another and had to make an extra physician appointment as a result.

In Texas, Express Scripts agreed to pay more than $728,000 to fund programs to promote lower drug costs for low-income, elderly or disabled Texans, and to educate consumers about the cost differences among medications. The company will also pay more than $272,000 in attorneys' fees and costs.

"This drug-switching scheme benefited the company at the expense of the Texans it purported to help," Attorney General Abbott said. "This settlement will help restore integrity to the process and better ensure that patients receive health care at a reasonable cost."

As pharmacy benefit managers, Express Scripts contracts with employers and government health plans to process prescription drug claims for patients enrolled in health plans. In this case, Express Scripts wrongly encouraged physicians to switch patients to different brand name cholesterol-controlling drugs, allegedly to save money for the patients and their health plans. However, physicians were not adequately warned about the health effects of the switch and/or the actual costs of the switch.

Under the terms of the settlement, Express Scripts may not solicit drug switches when:

  • the net drug cost of the proposed drug exceeds the net drug cost of the originally prescribed drug, or when the cost to the patient will be greater;
  • the originally prescribed drug has a generic equivalent and the proposed drug does not;
  • the originally prescribed drug's patent is expected to expire within six months, or;
  • the patent was switched from a similar drug within the past two years.

The settlement requires Express Scripts to inform patients and drug prescribers about the effect the switch will have on the patient's co-payment, and what financial incentives Express Scripts will realize for initiating a drug switch. The company must notify patients and prescribers that patients can be reimbursed for out-of-pocket expenses associated with drug-switching, and in addition, patients have the right to decline the drug switch.

The Attorney General has previously settled similar drug-switching investigations with Caremark Rx, L.L.C. and Medco Health Solutions Inc.