Lawsuit asserts Prime Therapeutics unlawfully fixes the prices of its reimbursements to AHF and other independent pharmacies, to align with reimbursements of a direct Prime competitor
LOS ANGELES (June 18, 2021) Today, AIDS Healthcare Foundation (AHF), the leading provider of health care to people living with HIV/AIDS around the world, filed a lawsuit in federal court in Los Angeles to stop Prime Therapeutics LLC from fixing prices of reimbursements to AHF pharmacies, along with all other independent pharmacies doing business with Prime, for providing prescription drugs to patients in need. The action was filed in U.S. District Court, Central District of California (Case No. 2:21-cv-04979).
Prime is a pharmacy benefit manager (PBM), a “middle-man” in the distribution system for prescription drugs in the United States. In its capacity as a PBM, Prime acts as a gatekeeper between pharmacies and health insurers. The PBM boasts of administering the pharmacy-benefits components of health-insurance plans for about 33 million people in the United States. Some of those people are patients of AHF pharmacies, and, in 2020, Prime processed almost 100,000 drug prescriptions for AHF patients.
In late 2019, Prime announced “a new three-year collaboration” with another PBM, Express Scripts, Inc. The word “collaboration” suggests something complicated. In fact, it appears Prime is simply aligning its reimbursement rates with those of the other PBM and doing so on an ongoing basis. AHF’s pleading asserts that Prime is thereby violating the most settled principle of antitrust law, the prohibition against fixing prices with a direct competitor.
Almost immediately after the “collaboration” went into effect in the spring of 2020, AHF noticed that it was being reimbursed less than before for providing the same pharmacy services to patients whose PBM is Prime. Indeed, those reimbursement rates now line up exactly with those of the other competitor PBM.
“The reimbursement money Prime has been unlawfully taking from AHF is money that can no longer fund the specialized care and lifesaving services that AIDS Healthcare Foundation offers to people living with HIV/AIDS — regardless of a patient’s ability to pay,” said Jonathan M. Eisenberg, Deputy General Counsel for AHF. “There is thus a real human cost here.”
With its lawsuit, AIDS Healthcare Foundation is now standing up to Prime, a powerful PBM that essentially controls access to many insured patients that use AHF pharmacies and healthcare centers, as well as on behalf of other independent pharmacies.
“AIDS Healthcare Foundation has real reason to fear that we may face retaliation from Prime for exposing it as a price-fixer,” added Eisenberg. “However, we take that risk on behalf of the patients and clients we serve and many other independent pharmacies to try to stop Prime’s flagrantly unlawful scheme.”
About the lawsuit, AIDS Healthcare Foundation President Michael Weinstein added, “PBMs are very powerful, and they always are tempted to squeeze pharmacies financially. Somehow Prime found out that it was giving larger reimbursements to pharmacies than another PBM. Apparently, Prime just could not leave a single dime on the table and resorted to fixing prices. AIDS Healthcare Foundation and its patients – and other independent pharmacies and their patients – are literally paying the price for that crime. But we are fighting back, and we are going to win.”
Here again is a link to a copy of the complaint: [Case No. 2:21-cv-04979].
 Note: Prime is, in fact, owned by a group of Blue Cross and/or Blue Shield health insurers.