Michigan Attorney General Dana Nessel filed a lawsuit against pharmacy benefit managers OptumRX and ExpressSxripts for their role in the opioid epidemic in the state.
Nessel allegedly filed at the 3rd Circuit Court in Wayne County on Thursday (Oct. 24) that OptumRX and ExpressScripts colluded and conspired with opioid manufacturers for years by negotiating with the manufacturers to award favorable placement on their formularies in exchange for financial kickbacks.
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OptumRX, ExpressScripts, and CVS Caremark hold more than 80% of the Michigan pharmacy benefit market.
Nessel’s lawsuit alleges claims of public nuisance, negligence, and under the Drug Dealer Liability Act against the pharmacy benefit managers (PBMs).
The attorney general alleges the PBMs created common-law and statutory nuisance by allowing and promoting opioid use in Michigan and committed negligence in breaching their own contracts by failing to employ reasonable standards of care in the sale, delivery, and dispensing of opioids.
Nessel also alleges the People of Michigan were injured by those who abused those substances, establishing a claim under the Drug Dealer Liability Act.
A PBM is a third-party company that functions as an intermediary between insurance providers and pharmaceutical manufacturers, ostensibly to reduce the cost of prescription medication for its clients.
It typically negotiates discounts and rebates with drug manufacturers, contracts with pharmacies, and develops and maintains drug formularies or lists of covered drugs.
Because a PBM decides which drugs it covers, it can bargain for rebates from drug manufacturers who want to get their products on its formularies.
PBMs have been largely unregulated for decades. Without federal regulation, states have stepped up to protect consumers and pharmacies, though they have continued to face challenges from the PBM industry.
In February 2024, 39 attorneys general, including Nessel, urged Congress (PDF) to take further action to regulate PBMs at the federal level.
In June, Nessel joined a bipartisan coalition of 32 attorneys general asking the U.S. Supreme Court (PDF) to rule on states' authority to regulate PBMs.
Since taking office in 2019, Nessel has focused intently on combatting the opioid epidemic and holding accountable those responsible for creating and fueling the crisis, resulting in over $1.6 billion to Michigan governments through settlements with McKinsey & Co, Distributors (Cardinal Health, McKesson, Inc., and AmerisourceBergen), Janssen Pharmaceuticals, Teva Pharmaceutical, Allergan Pharmaceutical, CVS, Walmart, and Walgreens.
The money is distributed to the state and local government units for Opioid-use disorder treatment and remediation.
In March, Nessel launched a new website dedicated to opioid settlement distributions.
The website is intended to help residents and local government units find multiple sources of information in one place. It includes an opioid settlement payment estimator searchable by individual settlement, municipality, and year of receipt.
According to the Michigan Department of Health and Human Services (MDHHS), between the years 2000 and 2020, the opioid death rate in Michigan increased on average 13.9% each year.
According to MDHHS, Michigan reported 2,998 overdose-related deaths in 2022.
