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GoodRx, PBMs Hit by Price Fixing Lawsuits

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Independent pharmacies have filed 3 class action lawsuits against GoodRx Holdings and major pharmacy benefit managers (PBMs).

Class action book and gavel | Image credit: Zerbor – stock.adobe.com

Lawsuits claim that an agreement between GoodRx and major PBMs drives down pharmacy reimbursements while increasing fees | Image credit: Zerbor – stock.adobe.com

GoodRx and multiple pharmacy benefit managers (PBMs) have been hit by class action lawsuits alleging the companies conspired to fix prices that PBMs pay for prescription drug claims, therefore reducing reimbursements and increasing fees for independent pharmacies.

The plaintiffs claim that GoodRx and the PBMs leveraged their market power to engage in anticompetitive behavior—including real-time data sharing and strategic transaction allocation—to drive down pharmacy reimbursements while maximizing profits from discount card transactions.1

The first 2 lawsuits were filed in the Los Angeles federal court by Keaveny Drug and Community Care Pharmacy last week.2,3 A third lawsuit from Old Baltimore Pike Apothecary and Smith's Pharmacy was filed last Friday in Providence, Rhode Island.4 While Community Care Pharmacy’s class action lawsuit was only filed against GoodRx, the other 2 lawsuits have the same list of defendants, which were mentioned in Community Care’s lawsuit as well: GoodRx Holdings, CVS Caremark, Express Scripts, MedImpact Healthcare Systems, and Navitus Health Solutions.

PBMs work with insurance companies to set prices for prescription drugs and handle payments to pharmacies when a patient fills a prescription.3 They also offer discount cards to help people pay less for their medications—patients could use the card instead of their insurance if it saved them money, though it wouldn’t count toward their deductible—which were originally aimed at individuals without insurance.

“In their modern form, though, these PBMs have morphed into behemoth middlemen: they can manipulate, and profit from, almost every step in the prescription drug supply chain,” the Keaveny Drug lawsuit stated.2

At the beginning of 2024, GoodRx and the 4 PBMs launched an “Integrated Savings Program” where GoodRx integrated its software and real-time pricing data from competing PBMs into the PBMs' own systems. Now, each time a pharmacy requests reimbursement, the PBMs' algorithm—powered by GoodRx—compares prices from various competitors and sets the pharmacy’s payout at the lowest available rate.

The plaintiffs argue that this setup artificially drives down pharmacy reimbursements while increasing fees, allowing GoodRx and the PBMs to profit at the expense of independent pharmacies. The lawsuits describe the arrangement as illegal price fixing, facilitated by proprietary algorithms that share confidential pricing data. These practices, they claim, have put severe financial strain on independent pharmacies, leading to closures and reducing patients' access to essential health care services.

Nearly two-thirds of all prescriptions in the US are processed by any of these 4 major PBMs; this number jumps up to 97% in some areas of the country. According to Keaveny Drug’s lawsuit, small pharmacies being in network with these PBMs is “a matter of survival.”

“These PBMs—among the largest PBMs in the country—control pharmacies’ access to patients: if a pharmacy is not in a PBM’s network, it cannot obtain reimbursement from health plans associated with the PBM, and those insurers’ members will not patronize that pharmacy,” the lawsuit stated. “Losing access to patients affiliated with one or more PBMs could cost an independent pharmacy its business.”

"Independent pharmacies are the backbone of our communities, providing essential healthcare services to millions of Americans," said Greg Asciolla, JD, partner at DiCello Levitt, the practice representing Old Baltimore Pike Apothecary and Smith's Pharmacy.1 "GoodRx and these PBMs—four of the largest in the United States—have not only hurt small businesses but also the patients who rely on them for their medications. We aim to hold them accountable for the considerable harm caused by their sophisticated price-fixing scheme."

References

  1. Old Baltimore Pike Apothecary, Inc. and Smith’s Pharmacy II, Inc. file class action lawsuit against GoodRx Holdings, Inc. and major PBMs for price fixing. News release. DiCello Levitt. November 4, 2024. Accessed November 5, 2024. https://dicellolevitt.com/old-baltimore-pike-apothecary-inc-and-smiths-pharmacy-ii-inc-file-class-action-lawsuit-against-goodrx-holdings-inc-and-major-pbms-for-price-fixing/
  2. Keaveny Drug, Inc. v GoodRx, Inc. et al. 2:24-cv-9379.
  3. Community Care Pharmacy, LLC v GoodRx, Inc. et al. 2:24-cv-09490.
  4. Old Baltimore Pike Apothecary, Inc. et al v GoodRX Holdings, Inc. et al. 1:24-cv-00453.
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