In a RICO suit filed in the Southern District of Texas in December 2017, Cedra Pharmacy is claiming that UnitedHealth Group is excluding its new locations in California and Texas from its pharmacy benefits manager (PBM) network, Catamaran/OptumRX, in an attempt to lower competition in the specialty-drug market. Specifically, Cedra claims that the Defendants are engaging in “a pattern of economic extortion and anti-competitive conduct.”
Cedra began operating in New York and sought to expand to California and Texas, as these are the three largest prescription drug markets. Cedra stated that it believes that companies like UnitedHealth are excluding independent pharmacies like itself in favor of their own in-house mail-order pharmacies.
UnitedHealth’s group benefits manager is OptumRX, which merged in 2015 with Catamaran to create Catamaran/OptumRX. This new benefits manager oversees about 20 percent of the prescription drug claims across the United States. Catamaran/OptumRX, along with the two other major PBMs in the United States, CVS Caremark and Express Scripts, control the prescription benefits market. This same 2015 merger saw the acquisition of two specialty pharmacies as well, BriovaRX and Salveo, which Cedra claims gave Catamaran/OptumRX even more of a reason to exclude other pharmacies from its network. Exclusion from Catamaran/OptumRX in these large markets will push “a pharmacy into insolvency.”
In this complaint, Cedra states that their applications for joining the PBMs in California and Texas have been unfairly delayed, when state and federal law demands that pharmacies be allowed to join PBMs if they meet the same conditions and standards as other pharmacies on these networks. Cedra claims that Catamaran/OptumRX is taking an undue amount of time to approve their Los Angeles application and that their Houston application is being held up because of fraudulent claims, despite the Houston pharmacy opening recently. Cedra also contends that UnitedHealth conveniently audited all of its pharmacies in New York during this same time frame.
The specialty drug market is currently a $100 billion market and expected to grow to $400 billion by 2020. As these companies continue to buy and consolidate business in-house, more of these suits may arise. For more information about RICO issues, contact the expert RICO and Qui Tam attorneys at Parker Straus, LLP.