A new lawsuit from the Virgin Islands Department of Licensing and Consumer Affairs claims the country’s largest pharmaceutical providers have conspired to increase prices while reducing consumer choice.
The 87-page suit filed Tuesday in the Superior Court alleged CVS Health-subsidiary CaremarkPCS Health, Cigna-subsidiary Express Scripts, and OptumRx — the United States’ three largest pharmacy benefit managers — and Zinc Health Services, Ascent Health Services, and Emisar Pharma Services — their group purchasing organizations — violated the Virgin Islands’ consumer protection act, as well as the consumer fraud and deceptive business practices act.
The suit claims the pharmacy and drug purchasers used the country’s “complex and opaque” prescription drug pricing system “to siphon increasing amounts of money from the pharmaceutical supply chain through an unfair and deceptive scheme …”
The DLCA alleged the companies’ hidden actions increased consumers’ out-of-pocket costs, limited consumers’ access to effective and less expensive prescription drugs, unfairly enriching themselves while undercutting independent pharmacies that were not part of the alleged scheme.
Contrary to their actions, the companies frequently touted their efforts to lower prices and provide better service, the suit claimed.
“Instead, Defendants have capitalized on their role as middlemen between drug manufacturers, pharmacies, health insurance plans, and consumers to siphon increasing revenue to themselves, drive up prices to consumers, restrict consumers’ choices of prescription drugs and pharmacies, and protect their own role and profits by shrouding them in secrecy and misleading marketing,” the DLCA suit alleged.
The suit claimed the pharmacy companies used the intermediary group purchasing organizations to retain savings from negotiated lower prices rather than passing the savings on to consumers.
“This additional, non-transparent layer to the system makes it even more difficult (if not impossible) for health plans to know what rebates and other fees manufacturers are paying to Defendants and whether the health plans are receiving their fair share of those fees,” according to the suit.
Since at least 2012, Virgin Islanders had fewer choices, paid more, and may have been denied access to safer or more effective drugs, the suit said.
“For example, Ozempic is sold in the United States for $969 per month, compared to $122 in Denmark and $59 in Germany, while Wegovy is sold in the United States for $1,349 per month, compared to $186 in Denmark and $137 in Germany,” the suit said.
Further, the suit alleged the pharmacy and group purchasing companies pushed drugs for which they could get the largest rebates even if equally effective, lower-priced drugs were available.
The suit asks the court to block the companies’ actions, impose the maximum civil penalty, and collect all allegedly ill-gotten money.
The Federal Trade Commission launched a similar lawsuit against pharmacy groups in 2024.
