Express Scripts...a more detailed coverage of the settlement

From John Curry, July 30, 2008

Courant.com

CIGNA, Express Scripts Settling Case With New York State

By DIANE LEVICK
Courant Staff Writer
July 30, 2008

Express Scripts Inc. and CIGNA are paying a total of $27 million to settle a 2004 lawsuit by the state of New York that accused Express Scripts of getting doctors to switch patients' drugs and pocketing rebates from drug companies.

The allegations involved prescription benefits for New York's Empire Plan, which covered more than 1 million active and retired state and local government employees and dependents at the time. The suit also said Express Scripts inflated the cost of generic drugs for the plan.

CIGNA is involved in the settlement announced Tuesday because it insured the state's prescription drug plan and subcontracted Express Scripts to manage the drug plan benefits.

St. Louis-based Express Scripts was supposed to negotiate the lowest possible prices from drug makers for the New York plan and return any rebates to the state, New York said.

Eliot Spitzer, New York's attorney general at the time, said Express Scripts committed fraud by disguising rebates as administrative or other fees and keeping them. He had sought as much as $100 million in reimbursements, plus penalties and fines.

CIGNA and Express Scripts did not admit any allegations in the settlement, and neither company would disclose what share of the $27 million they are paying.

"In order to facilitate that settlement, we agreed to make a contribution, as prolonged litigation is not in anyone's best interest," CIGNA said in a written statement. "We believed that at all times, CIGNA fulfilled its obligations to the state of New York."

The 24-page settlement lays out a broad range of rules concerning drug-switching and disclosure of payments from drug makers to Express Scripts. But the company said Tuesday, "Express Scripts' business practices already comply with essentially all requirements of the settlement. Only minor adjustments in certain procedures will be needed due to the settlement."

Express Scripts said it did not conduct brand-drug "therapeutic interchange programs" (drug-switching) for the Empire Plan. The company also said it does not recommend switches to higher-cost drugs and does not accept drug makers' funding for such programs.

The settlement also applies to any pharmacy benefit plan that has its main place of business in New York and that is served by either Express Scripts or CIGNA.

Contact Diane Levick at dlevick@courant.com.