Radar on Drug Benefits

Independent pharmacies have filed separate lawsuits against drug discount provider GoodRx and four of its partner PBMs, accusing the companies of a “conspiracy” to fix prices and suppress reimbursements to pharmacies. Industry experts say the litigation demonstrates how GoodRx, once a disruptive force in the pharmacy benefits sector, has now become more like a PBM itself. 

At the heart of the lawsuits is the GoodRx Integrated Savings Program, which the company launched last year. Four PBMs — CVS Health Corp.’s Caremark, The Cigna Group’s Express Scripts, MedImpact Healthcare Systems, and Navitus Health Solutions — partnered with GoodRx to integrate the discounter’s pricing software into their claims processing systems, according to one of the lawsuits. The PBMs use GoodRx’s algorithm and each other’s negotiated reimbursement amounts to determine pharmacy reimbursements for prescriptions that patients fill with their insurance. Instead of processing the prescription through the patient’s regular PBM, it is processed through GoodRx. The patient is then automatically charged for the lowest rate negotiated by any PBM in the system. 

As their parent companies struggle with elevated utilization that’s impacting their health insurance businesses, CVS Health Corp.’s Caremark, The Cigna Group’s Express Scripts and UnitedHealth Group’s Optum Rx had strong financial results during the third quarter of 2024.  

The Big Three PBMs’ continued success comes as they endure scrutiny from state and federal governments, including an administrative complaint that the Federal Trade Commission (FTC) filed in September. They are also facing pressure from clients that seek more transparency about their pharmacy spending, rebates and other issues. Still, the Big Three, which combined process more than 80% of prescription drug claims, argue that they have been effective at keeping medication costs down and have launched new products to be more accountable and help manage high-cost specialty drugs.  

With the financial performance of its Aetna segment continuing to worsen, CVS Health Corp. last week revealed that it replaced President and CEO Karen Lynch with David Joyner, president of CVS Caremark.  

But is Joyner — even with his experience managing a PBM — the right choice to helm CVS’s turnaround amid plummeting stock prices and ongoing pressure from investors? Securities and credit rating analysts appear to have mixed opinions. 

“A bit of a concern I had when Karen [Lynch] left the company was that the primary issues right now revolve around Aetna,” says Brad Ellis, senior director in Fitch Ratings’ North American insurance rating group. “She grew up in the health insurance sector, so she knew a lot about that business…I was somewhat hopeful that she would be able to turn around the health insurance business.”  

In a newly proposed rule, the Biden administration builds upon guidance it released earlier this year and requires private health insurers, for the first time, to cover over-the-counter (OTC) birth control. That includes Opill (norgestrel), which in 2023 became the first daily oral contraceptive approved for use in the U.S. without a prescription. 

The news that insurers will be required to cover OTC birth control did not come as a surprise, as CMS in October 2023 released a request for information (RFI) asking for input about the “benefits and challenges” that would be associated with requiring coverage of OTC preventive products, including contraception.