New Mexico Public School Insurance Authority sues pharmaceutical broker [The Santa Fe New Mexican]

Oct. 23—The agency that administers health insurance coverage for New Mexico's public school employees is attempting to claw back about $4.5 million in prescription drug discounts and rebates it says it was shorted between 2018 and 2020 by a company paid to negotiate prescription prices for members.

The New Mexico Public Schools Insurance Authority is accusing Express Scripts Inc. — a subsidiary of Cigna — of breach of contract, breach of fiduciary duties and violations of the Unfair Trade Practices Act, says a civil complaint filed recently in state District Court.

Public Schools Insurance Authority attorney Marty Esquivel said Monday there has a been a nationwide push in recent years for greater transparency and increased regulation of so-called pharmacy benefit managers like Express Scripts, which serve as middlemen between insurance companies and pharmaceutical firms, due to the complicated nature of drug pricing and sometimes "opaque" contractual clauses.

"They offer the idea of these great discounts and rebates, but the process itself is not clear, so folks rely on whatever they say is due," Esquivel said. "They offer guarantees, but they are also doing business with pharmaceutical companies, and it's just not crystal clear where those cost savings are coming from or whether they are actually doing what they advertise they are supposed to be doing."

Express Scripts representatives did not respond to an email seeking comment.

Discrepancies between the cost discounts and rebates Express Scripts was contractually obligated to provide to the authority and what the authority actually received was discovered through an audit published in August 2022, Esquivel said.

The authority gave Express Scripts a chance to address the audit findings before filing the lawsuit, he added.

"We told them we felt we were shorted ... but when confronted with the audit, they really didn't come back with any specifics" while disagreeing with the findings, he said. "We didn't feel as though Express Scripts gave us any adequate answer to address a pretty monumental discrepancy on what was owed."

The authority provides health benefits for about 21,800 public school employees and their family members, bringing the total number receiving coverage through the agency to about 45,000 people, Esquivel said.

Express Scripts is one of the largest pharmacy benefit managers in the country, online company profiles say. Cigna purchased the company in 2018 for $67 billion, according to a Dec. 20, 2018, report by news organization Fierce Healthcare.

Esquivel said the state did business with Express Scripts from 2018 through 2022. He wasn't certain whether the state stopped contracting with the company because of the alleged failures to deliver on contractual promises or because the state found a better deal elsewhere.

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