Sue Tuck Richmond
December 1, 2014
Earlier this year Express Scripts said the average cost for compounded prescription had risen from about $90 to $1,100 and that in a number of cases less expensive alternatives than compounded prescriptions existed. Express Scripts then took a bold move. It then announced it would deny coverage for approximately 1,000 active ingredients (API) used to make a variety of compounded medicines. Three compounding pharmacies filed a federal lawsuit, claiming Express Scripts is violating federal law.
As I have mentioned before on the blog, I think there is a potential issue of whether these compounding pharmacies have standing to bring this lawsuit. At this point, I will leave that issue to the lawyers in the case and the court to determine.
Assuming this case moves forward on the merits with no one being dismissed for lack of standing, the final results will be ground breaking to say the least. What is also going to be very interesting is the discovery phrase. The underlying documents that these compounding pharmacies may have to produce in discovery could end up being very telling about the industry. In some ways, one might hope that standing isn't an issue just so documents can be produced, interrogatories can be asked and answered, and depositions can be taken. A wealth of information about the compounding industry could be invaluable. There has been some chatting on the internet about this becoming a class action. Wow. Wouldn't that be a "discovery" dream for some to learn all the in's and out's of the compounding industry.
If Express Scripts loses the lawsuit filed against them by three compounding pharmacies, what have they lost? Sure compounding pharmacies will claim victory and tout how they fought for patient's rights. Sure Express Scripts will have lost legal fees involved in the litigation, but the bottom line is they will just go back to covering API that is used to make compounded medications as they did prior to their announcement to exclude coverage.
The bigger issue is what will the compounding industry lose if they three compounding pharmacies lose this case. There will be binding precedent on that books that allows PBMs to exclude coverage for API used to make compounded medications. Other PBMs and insurance companies could then follow Express Scripts lead to not just restrict coverage but also to eliminate coverage causing compounding pharmacies to lose a bigger piece of the pie than they have already lost. In my opinion the stakes are very high for compounding pharmacies in this lawsuit. In my opinion, it is essential that they win the cases they have filed; otherwise, their decision to sue may have a much larger impact than compounding pharmacies, pharmacists and consumers of compounded drugs have bargained for.
This is definitely a case to keep a close watch on. It will most likely have a huge impact no matter who wins the case.