Some of the most influential players in our healthcare system are three companies you may never have heard of.
They're called prescription benefit managers, and they oversee the prescription-drug insurance plans offered by businesses, governments and other organizations.
And, if the attorneys general of California and 27 other states are correct, they've been pocketing money from pharmaceutical companies to steer patients into name-brand drugs.
The attorneys general announced a $9.5-million settlement last week with Express Scripts Inc., which handles the drug benefits of about 50 million workers.
The settlement with Express Scripts, the third-biggest prescription benefit manager, followed a $38.5-million settlement this year with rival CVS Caremark Corp. and a $29.3-million settlement with Medco Health Solutions Inc. in 2004. The three companies collectively administer prescriptions for more than 200 million people.
Each company denied any wrongdoing.
"We have not been doing what they claim we've been doing," said Steve Littlejohn, an Express Scripts spokesman.
He said the company agreed to the settlement to put the matter behind it and avoid further legal costs.
"Now we can focus on what we do best," he said. "Our whole thrust is to work to drive down costs."
The settlements followed allegations from state officials that the companies enjoyed too-cozy relationships with drug makers that resulted in money changing hands to push favored medicines.
"What we found is that, very often, they would get rebates from the manufacturers but wouldn't pass it along to the plans," said Al Shelden, a senior official in California Atty. Gen. Jerry Brown's office.
He was unable to provide a precise dollar amount involved but said it ran in the "multimillions."
Along with administering drug insurance plans, prescription benefit managers run their own mail-order pharmacies. This lets them buy in bulk from drug makers and offer medicine at lower prices than conventional drugstores -- basically the same way Costco can undercut your local grocery store.
Prescription benefit managers keep lists of "preferred" drugs for which people will pay less than for non-preferred drugs. Typically, a drug will be preferred if a pharmaceutical maker cuts the wholesale price in return for greater access to a prescription benefit manager's patients.
