Independent pharmacies sue GoodRx over price-checking strategy
The pharmacies have accused the discount provider of using an automated algorithm to fix reimbursement rates.
At least four independent pharmacies are suing GoodRx, a prescription discount program manager, over the company’s new relationships with pharmacy benefit managers.
GoodRx helps uninsured and underinsured patients avoid having to pay the list price for prescriptions.
The pharmacies have accused GoodRx of teaming up with the the PBMs this year to push down the payments the pharmacies get and to increase the amount of transaction fees GoodRx gets for sending the patients to the pharmacies.
Related: CVS, GoodRx to launch drug discount program for commercially insured
Community Care Pharmacy of Garden City, Michigan, and Keaveny Drug of Winstead, Minnesota, each filed suits last week in the U.S. District Court for the Central District of California.
Old Baltimore Pike Apothecary and Smith’s Pharmacy II, two pharmacies in Pennsylvania, joined to file a third suit in the U.S. District Court for the District of Rhode Island.
Representatives from GoodRx were not immediately available to comment.
What it means: For brokers and employer-sponsored health plans, the suit may be an indication that, at least for now, the GoodRx relationships with PBMs produce produce discounts big enough to get pharmacies’ attention.
Party details: All of the plaintiffs are asking for court permission to represent classes consisting of most U.S. independent pharmacies, and all are accusing GoodRx of violating the federal Sherman Act antitrust law provision that prohibits restraint of trade.
Old Baltimore Pike Apothecary and Smith’s Pharmacy are also accusing GoodRx of violating the Sherman Act provision that prohibits companies from joining together to fix prices.
Separate law firms brought all of the three suits, and the language in three complaints is different.
The Rhode Island suit and the Community Care suits both use the same PBM ownership and PBM services’ market share charts from a recently released Federal Trade Commission interim staff report on PBMs.
Keaveny estimates in its complaint that the class of independent pharmacies affected by the GoodRx relationships with PBMs may include about 20,000 U.S. independent pharmacies.
Suit details: The pharmacies that filed the three suits present similar arguments.
PBMs help health insurers, self-insured employer health plans and other payers provide prescription drug benefits. They often encourage or require patients to fill prescriptions at pharmacies that have agreed to accept pre-negotiated rates.
The usual PBM strategy cuts an independent pharmacy’s share of the prescription revenue to just 3 cents per pill dispensed, and the GoodRx relationships with the PBMs cut the independent pharmacies’ share of the revenue even more, according to the Keaveny complaint.
Last year, GoodRx teamed up with PBMs to create discount-checking alliances, Keaveny says.
Now, when a patient brings a GoodRx card to a pharmacy and a pharmacy sends a transaction request to the patient’s PBM, the PBM “selects the lowest available rate at which to reimburse the pharmacy,” Keaveny says.
The PBM arrangements artificially suppress the rates the independent pharmacies get, and that kind of arrangement is “illegal under the federal antitrust laws,” according to Keaveny.
GoodRx and PBMs “may not accomplish this forbidden price-fixing activity by passing their pricing information through an algorithm,” Keaveny says.
Old Baltimore and Smith’s, the pharmacies that filed the suit in Rhode Island, predict that letting the GoodRx relationships with PBM continue would hasten the death of independent pharmacies.
An average of one independent pharmacy shut down every day in 2023, and a National Community Pharmacists Association survey shows that about one-third of the 10,000 owners and managers surveyed said they were thinking about shutting down in 2024, according to Old Baltimore and Smith’s.