Florida Sues Two Pharmacy Benefit Managers Over Alleged Price-Fixing Scheme

Florida Attorney General James Uthmeier filed suit August 27 in Polk County Circuit Court against Prime Therapeutics LLC and Express Scripts, Inc., alleging the two pharmacy benefit managers formed an illegal horizontal price-fixing agreement that suppressed what pharmacies are paid to fill prescriptions. The complaint seeks injunctive relief, civil penalties, and damages.

The state alleges the arrangement was formed in December 2019 and took effect in April 2020, and that it reaches roughly 80 percent of branded drugs and 70 percent of generics. According to the complaint, Prime's reimbursement rates were approximately 20 percent higher before its partnership with Express Scripts, and the arrangement produced about $2.5 billion in savings for Prime while leaving independent pharmacies dispensing medication below cost.

The case matters beyond its immediate parties because pharmacy benefit managers occupy a position in the drug supply chain that most patients never see and cannot avoid. Nearly every insured prescription filled in Florida passes through one, and the terms they set determine whether the pharmacy filling it can stay in business.

What a pharmacy benefit manager does

Pharmacy benefit managers sit between health insurers, drug manufacturers, and pharmacies, and they are among the least visible and most consequential actors in American drug pricing. They negotiate rebates with manufacturers, build the formularies that determine which drugs a plan covers and at what tier, and set the reimbursement rates that pharmacies receive for dispensing.

That last function is what this lawsuit concerns. When a patient fills a prescription, the pharmacy acquires the drug at one price and is reimbursed by the PBM at another. If the reimbursement falls below acquisition cost plus dispensing expense, the pharmacy loses money on the transaction. Pharmacies generally cannot decline to fill covered prescriptions selectively without jeopardizing their network participation.

The market is heavily concentrated. A small number of PBMs process the overwhelming majority of American prescriptions, and most are affiliated with large insurers or retail pharmacy chains. That concentration is the structural condition that makes an alleged agreement between two of them consequential.

The vertical integration in this industry compounds the problem the lawsuit describes. Several of the largest PBMs are owned by or affiliated with health insurers and with pharmacy chains, which means the same corporate family can be setting the reimbursement a competing pharmacy receives while operating pharmacies of its own. That structure creates an obvious incentive question, and it has been the subject of federal scrutiny independent of any state litigation.

The specific allegation

The legal theory is horizontal price fixing, which is the most straightforward category of antitrust violation. A horizontal agreement is one between competitors at the same level of a supply chain, as distinct from a vertical agreement between a supplier and a distributor. Horizontal agreements to fix prices have historically received the least deference from courts.

The state's framing is that Prime and Express Scripts, rather than competing on the reimbursement rates they offered pharmacies, agreed to align them downward. In an ordinary competitive market, a pharmacy facing an unacceptably low rate from one PBM could seek better terms from another. An agreement between two large PBMs removes that alternative.

The complaint includes a specific example drawn from a pharmacy outside Orlando, where reimbursement for one drug reportedly dropped 45 percent, converting what had been a profit into a loss of $15.45 per prescription filled. That is the kind of granular figure that makes an abstract antitrust claim concrete.

These are allegations that the companies will have the opportunity to contest. The lawsuit has been filed, not adjudicated, and PBMs have generally defended their reimbursement practices as delivering savings to health plans and ultimately to patients and employers.

Spread pricing is a related practice worth understanding because it recurs in PBM litigation generally. In a spread pricing arrangement, the PBM charges the health plan more for a drug than it reimburses the pharmacy and retains the difference. Several states have restricted or banned the practice in their Medicaid programs after audits found substantial spreads, and transparency requirements have followed in a number of jurisdictions.

Why this hits Florida hard

Florida has one of the largest Medicare-eligible populations in the country and a high volume of prescription drug utilization as a result. The state's independent pharmacy sector is correspondingly important, particularly in rural counties and in smaller communities where a single independent pharmacy may be the only accessible option.

Independent pharmacies operate on thin margins and have limited leverage in negotiations with entities that process billions of prescriptions. When reimbursement falls below cost, an independent pharmacy has three options: absorb the loss, stop stocking the affected drugs, or close. All three outcomes reduce access.

Rural access is where the consequences become most visible. When an independent pharmacy closes in a small Florida county, the nearest alternative may be a substantial drive, and for elderly patients managing multiple prescriptions, that distance is a genuine barrier to adherence. Uthmeier's stated concern about Floridians' access to local pharmacies tracks this dynamic directly.

Antitrust cases of this kind typically turn on evidence of agreement rather than on evidence of parallel pricing. Competitors independently arriving at similar prices is lawful and common. What the state must establish is that the two companies actually agreed to coordinate, which usually requires documentary evidence, communications, or contractual terms that show more than similar behavior. That evidentiary burden is why these cases take years and why discovery is where they are won or lost.

The national context

PBM practices have drawn scrutiny from multiple directions over the past several years, including from the Federal Trade Commission, from Congress, and from state attorneys general across party lines. That bipartisan quality is unusual in health policy and reflects a rare alignment: independent pharmacy owners, patient advocates, and employers paying for coverage have all raised objections to different aspects of the same industry.

Several states have enacted PBM regulation addressing reimbursement floors, spread pricing, patient steering toward affiliated pharmacies, and transparency in rebate flows. The regulatory approaches vary substantially and their effects are still being evaluated.

Litigation is the other track, and Florida is not alone in pursuing it. State attorneys general have brought a range of actions against PBMs on theories including antitrust, consumer protection, and unfair trade practices, with mixed results. This case, filed in state court under Florida law, will be litigated on Florida antitrust and unfair competition standards.

Florida's independent pharmacy sector has contracted over the past decade, following a national pattern. Each closure removes a point of access and shifts prescription volume toward chains and mail order, which in turn increases the concentration that made the alleged conduct possible. Pharmacy owners have testified before state legislatures across the country describing reimbursements below acquisition cost, and their accounts have been remarkably consistent across states.

What it means for Florida patients

The immediate effect on a patient at the counter is none. Reimbursement disputes between PBMs and pharmacies operate behind the transaction, and copays are determined by plan design rather than by what the pharmacy is paid.

The longer-term effect is about access. If reimbursement pressure continues to close independent pharmacies, patients lose options, and in some geographies that means losing the only nearby option. Chain pharmacies have their own footprint decisions and have closed locations in Florida and nationally.

Patients who want to understand their own situation can ask their pharmacist directly whether a medication is one the pharmacy loses money dispensing. Independent pharmacists have generally been willing to discuss it, and the answer is often specific to particular drug classes rather than across the board.

Mail order and specialty pharmacy arrangements are the other lever in this system. PBMs frequently steer patients toward pharmacies they own or contract with preferentially, using copay differentials or network design, which moves volume away from independent competitors. Patients experience that as a plan telling them where they can fill a prescription, and it is one of the practices state PBM regulation has most often targeted.

What's next

The case proceeds in Polk County Circuit Court, and the defendants will respond, most likely with motions to dismiss that test the legal sufficiency of the antitrust claims. Cases of this type take years, and the initial pleadings stage alone can run many months.

The remedies sought matter as much as the liability question. Injunctive relief, if granted, would order changes to how the companies set reimbursement in Florida going forward, which would have a more direct effect on pharmacies than a damages award. Civil penalties and damages address past conduct.

The Florida Legislature is the other venue where this could move. State-level PBM regulation is within legislative authority, and a high-profile lawsuit tends to generate legislative interest. Whether bills addressing reimbursement floors or transparency requirements appear in the 2027 session is worth watching, and it would not depend on the litigation's outcome.

Patients who encounter a problem can also raise it with regulators. The Florida Department of Financial Services and the Office of Insurance Regulation handle certain complaints regarding health plan and PBM practices depending on the plan type, and self-funded employer plans fall under federal jurisdiction instead. That jurisdictional split is itself one of the reasons PBM regulation has been difficult to accomplish at the state level.

The venue itself is worth a note. Filing in Polk County Circuit Court rather than in one of Florida's larger metropolitan circuits places the case in a jurisdiction covering a region where independent pharmacies remain a meaningful part of the health care landscape. State antitrust actions can be brought in any circuit with proper jurisdiction, and venue selection is a routine strategic decision in litigation of this kind.