Florida Sues Two Pharmacy Benefit Managers Over Alleged Price Fixing

Florida Attorney General James Uthmeier filed an antitrust lawsuit this week against Express Scripts and Prime Therapeutics, accusing the two pharmacy benefit managers of entering an illegal agreement that drove down what independent pharmacies across the state are paid for filling prescriptions. The complaint alleges violations of the Florida Antitrust Act and the Florida Deceptive and Unfair Trade Practices Act, and it asks a court for injunctive relief, civil penalties, damages exceeding $50,000 and a jury trial.

The case targets a segment of the drug supply chain that most patients never see directly. Pharmacy benefit managers sit between insurers, drug manufacturers and pharmacies, negotiating prices and setting the reimbursement rates that determine how much a pharmacy receives when it hands a prescription to a customer. Express Scripts is among the largest such firms in the country, and Prime Therapeutics administers benefits for a network of Blue Cross and Blue Shield plans.

For Florida, the stakes are concentrated in the independent pharmacy sector, which is disproportionately important in rural counties and in neighborhoods where chain drugstores have closed. The state has recorded a steady contraction in independent pharmacy locations over the past decade, and pharmacy owners have testified repeatedly in Tallahassee that below-cost reimbursement is the primary driver.

What the lawsuit alleges

According to the complaint, Prime Therapeutics and Express Scripts entered into an agreement in December 2019 under which Prime adopted the lower reimbursement rate schedule that Express Scripts already used. The state alleges the arrangement took effect in April 2020, has been extended multiple times since, and remains operative today.

The practical effect described in the filing is a sharp reduction in what pharmacies collect. The state alleges reimbursement rates for brand-name drugs fell by roughly 80 percent and rates for generic drugs fell by roughly 70 percent under the arrangement, with some fills reimbursed at less than what the pharmacy paid to acquire the medication. The complaint asserts that Prime realized approximately $2.5 billion in cost savings in the first three years of the agreement.

The legal theory is that two competitors agreed on the prices they would pay a common set of suppliers, which is a form of price fixing on the buying side of a market. Antitrust law treats horizontal agreements among competitors with particular suspicion, whether the agreement concerns what firms charge customers or what they pay vendors, because in both cases the agreement removes the competitive pressure that would otherwise set the price.

Neither company has been found liable, and the allegations remain unproven. Both firms have contested similar claims brought elsewhere, generally arguing that their contracting practices lower drug costs for plan sponsors and patients and that reimbursement schedules reflect market conditions rather than coordination.

The Florida context

Florida has taken an unusually aggressive posture toward pharmacy benefit managers relative to other states. Lawmakers passed legislation in 2023 imposing new licensure, transparency and conduct requirements on the industry, including restrictions on steering patients toward pharmacies affiliated with the benefit manager and limits on certain contractual clauses. The Office of Insurance Regulation was given expanded authority to examine these firms.

That statutory framework matters for this case because it established a record. Regulatory filings, complaint data and examination findings generated under the 2023 law gave state attorneys a body of Florida-specific evidence about reimbursement patterns that would have been harder to assemble beforehand.

The independent pharmacy sector in Florida is a meaningful part of the state's health infrastructure. Independent stores frequently serve as the only pharmacy within a reasonable drive in parts of the Panhandle, the Big Bend and inland agricultural counties. When one closes, residents typically face a longer trip or shift to mail order, an option that works poorly for acute prescriptions and for patients without reliable delivery addresses.

How reimbursement works

When a customer presents a prescription, the pharmacy transmits a claim to the benefit manager, which returns an approved reimbursement amount. The pharmacy has already purchased the drug from a wholesaler at a price it does not control. If the reimbursement is lower than the acquisition cost plus dispensing expense, the pharmacy loses money on that fill.

Pharmacies have limited leverage to refuse. Benefit managers administer coverage for large blocks of patients, and a pharmacy that declines a network contract loses access to every patient covered under it. Contracts are often offered on a take-it-or-leave-it basis, and pharmacies typically cannot see the full rate schedule before agreeing to participate.

Clawbacks add a further layer. Under some arrangements, a benefit manager can retroactively reduce payments already made, meaning a pharmacy's revenue for a given month is not final when the month closes. Florida's 2023 law addressed some of these practices, but the reimbursement rate itself, which is the subject of this lawsuit, was not capped.

What it means for Floridians

Patients do not pay pharmacies directly for the reimbursement rate, so the immediate effect of this litigation on out-of-pocket costs is indirect. The clearer consequence is access. If reimbursement remains below cost for common medications, pharmacies respond by narrowing what they stock, limiting hours or closing entirely, and those decisions determine whether a prescription can be filled locally.

Rural Floridians feel that most acutely. In counties where a single independent pharmacy serves a community, closure converts a ten-minute errand into an hour-long trip, which is a genuine barrier for older residents, people without cars and workers who cannot leave a shift. Chronic disease management depends on consistent refills, and interruptions correlate with worse outcomes and higher downstream costs.

Urban neighborhoods are not exempt. Several large chains have closed locations across Florida metro areas in recent years, and independents have absorbed some of that demand. Where the independents are also under financial pressure, the result is a thinner network in exactly the places with the highest prescription volume.

Local impact across the state

Miami-Dade and Broward counties have large concentrations of independent pharmacies serving Spanish-speaking and Creole-speaking populations, where staff who share a patient's language provide a service national chains often cannot match. Owners in those markets have been among the more vocal participants in legislative hearings on benefit manager practices.

In Tampa Bay and Central Florida, the pressure has shown up in consolidation, with independent owners selling to larger operators or closing when reimbursement no longer supports the payroll. Pharmacy schools at Florida universities have tracked declining interest in independent ownership as a career path, citing the economics.

North Florida and the Panhandle carry the sharpest access risk. Several counties have only one or two retail pharmacies of any kind, and hospital pharmacy departments in those areas are not structured to absorb routine retail volume.

How the industry is structured

Three pharmacy benefit managers administer the large majority of prescription claims in the United States, and each is affiliated with a major health insurer or retail pharmacy operator. That vertical integration is central to the criticism directed at the sector, because a firm that sets reimbursement rates for competing pharmacies may also own pharmacies of its own.

Prime Therapeutics occupies a somewhat different position, having been formed to administer benefits for a collection of Blue Cross and Blue Shield plans. Express Scripts is among the largest firms in the industry and is part of a broader health services organization. The complaint alleges these two firms, ordinarily competitors for plan sponsor business, coordinated on the rates they paid pharmacies.

Revenue in this business comes from several sources: administrative fees charged to plan sponsors, rebates negotiated with drug manufacturers and, in some contracting models, the spread between what a plan is charged and what a pharmacy is paid. The transparency of each of those streams varies, and Florida's 2023 legislation addressed several of them.

Understanding that structure matters for evaluating the case. The state is not alleging that reimbursement rates were simply too low, which would not be actionable on its own. It alleges that two firms agreed on those rates rather than setting them independently, which is the conduct antitrust law reaches.

What independent pharmacies have reported

Florida pharmacy owners have appeared before legislative committees repeatedly over the past several sessions describing the same pattern: reimbursement below acquisition cost on specific medications, contracts offered without negotiation, and rate schedules that could not be reviewed in advance.

The medications most frequently cited are common maintenance drugs, including generics used for diabetes, hypertension and cholesterol management. Those are high-volume prescriptions, which means a loss of a few dollars per fill accumulates quickly across a month.

Owners have described the operational responses available to them, none of which are good for patients. A pharmacy can decline to stock a medication that is reimbursed below cost, which sends the patient elsewhere. It can reduce staffing, which lengthens wait times. It can reduce hours or close entirely.

The Florida Pharmacy Association and independent owner groups have supported reimbursement floor legislation as the direct remedy. Their position is that litigation, however it turns out, operates on a timeline too long to help pharmacies making closure decisions now.

What is next

The case will proceed in Florida state court, where the defendants are expected to seek dismissal before any discovery on the merits. Antitrust litigation of this kind typically takes years, and a request for a preliminary injunction, if the state pursues one, would be the first point at which a judge weighs the strength of the evidence.

Parallel litigation matters here as well. Independent pharmacy groups have brought their own antitrust claims against Prime Therapeutics over similar allegations, and outcomes in those cases could influence how Florida's suit develops. Federal regulators have also been examining benefit manager practices, and any federal action would shape the legal landscape.

Legislatively, the suit gives momentum to proposals that would set a reimbursement floor tied to the national average drug acquisition cost plus a dispensing fee. Several states have enacted versions of that approach for Medicaid managed care, and Florida lawmakers have discussed extending it to commercial plans. Whether that appears as a bill in the next session will depend in part on how the litigation unfolds over the coming months.