A federal judge in Connecticut has denied most of Cigna Health and Life Insurance’s claims in the company’s request to dismiss a lawsuit claiming it artificially inflated prescription drug costs. The move, they claim, violates its clients’ health insurance policies.
The ruling by U.S. District Judge Warren Eginton means that the class-action lawsuit against Cigna and OptumRX Inc. will advance. The insurer hired OptumRX as its benefits manager to negotiate drug prices on behalf of the Cigna network.
Eginton wrote in the ruling, “The court finds the plaintiffs have plausibly alleged more than an entitlement to lower-cost prescription drugs or breach of contract. … The complaint plausibly alleges the defendant CIGNA acted with scienter by alleging that it intentionally sought to charge excess amounts for prescription drugs and that it required the pharmacies to conceal from the insureds the amounts of the prescription drug costs.”
The lawsuit was filed in October 2016 on behalf of five individuals covered by Cigna. The suit alleges both companies conspired over several years to make policyholders pay higher prices for prescription drugs. The plaintiffs allege that the companies misrepresented the costs of the drugs through higher charges to patients and efforts to get a larger portion of patient payments.
Eginton denied the motion to dismiss most of the claims, but the RICO claim against OptumRX was dismissed. The RICO claim against Cigna was not dismissed.
The lawsuit notes numerous examples of the defendants and agents of the defendants taking clawback or spread payments from pharmacies across the country thousands of times per day.
One example cited in the suit showed that a class member paid a $20 co-payment for a prescription drug, which was 1,043% more than the actual $1.75 fee that is paid to the pharmacist. The lawsuit claims that the defendants, without disclosing to the consumer, clawed back the $18.25 overcharge.