GoodRx and PBMs Face Legal and Regulatory Scrutiny –
Independent pharmacies have recently filed lawsuits in several different federal courts, alleging that GoodRx, in collaboration with several pharmacy benefit managers (“PBMs”),including CVS Caremark, Express Scripts, MedImpact, and Navitus, engaged in practices to suppress reimbursement rates and increase fees for independent pharmacies.
On February 7, 2025, Kehoe Law Firm, P.C. filed such a class action lawsuit on behalf of C&M Pharmacy Inc., d/b/a Parvin’s Pharmacy & Katz Pharmacy, in United States District Court, Central District of California.
Please click C&M Pharmacy, d/b/a Parvin’s Pharmacy & Katz Pharmacy v. GoodRx, Caremark, et al. to view the antitrust class action complaint.
The lawsuits claim that through GoodRx’s “Integrated Savings Program” (“ISP”), these entities conspired to artificially lower generic drug reimbursement rates and impose higher transaction fees, thereby maximizing their profits at the expense of smaller pharmacies. The ISP allegedly utilizes GoodRx’s pricing algorithm and real-time data from PBMs to determine the prices of generic drug transactions. This system is said to enrich GoodRx and the PBMs while financially harming independent pharmacies.
The lawsuits allege that such practices violate antitrust laws by fixing prices and creating unfair competition, ultimately threatening the viability of independent pharmacies. As a result, independent pharmacies are reimbursed at the lowest rate as determined by the GoodRx algorithm, which often results in lower payments than the rates originally negotiated with the PBMs.
In a related context, the Federal Trade Commission (“FTC”) has been investigating the role of PBMs in the pharmaceutical supply chain. An interim report published in July 2024 highlighted concerns that PBMs, through vertical integration and market concentration, have significant control over prescription drug accessibility and affordability.
The FTC report found that the six largest PBMs manage nearly 95% of all U.S. prescriptions, enabling them to profit at the expense of patients and independent pharmacists. The FTC’s inquiry aims to shed light on PBM practices, including charging fees and clawbacks to unaffiliated pharmacies, steering patients toward PBM-owned pharmacies, and employing opaque reimbursement methods that disadvantage independent pharmacies.
PBMs and Their Alleged Manipulation of Drug Pricing
PBMs allegedly manipulate prescription drug pricing in several ways:
- Dictating Reimbursement Rates: PBMs force independent pharmacies to accept unreasonably low reimbursement rates for dispensing prescriptions, often lower than the pharmacy’s acquisition costs.
- Charging Retroactive Fees: PBMs impose Direct and Indirect Remuneration (“DIR”) fees and other retroactive fees on pharmacies, which can significantly reduce the pharmacies’ margins. These fees are often tied to performance metrics and can be substantial.
- Clawbacks: PBMs sometimes instruct pharmacies to collect higher copays from patients than the actual cost of the drug and then claw back the difference, keeping the excess amount.
- Specialty Drug Pricing: PBMs mark up the prices of specialty generic drugs by significant amounts and reimburse their affiliated pharmacies at higher rates than unaffiliated pharmacies.
- Vertical Integration: Many PBMs are part of vertically integrated conglomerates that include their own mail-order, specialty, and retail pharmacies. This integration allows them to steer patients to their own pharmacies and manipulate pricing to benefit their affiliated entities.
- Opaque Contracts: PBMs offer complex, opaque, and ever-changing contracts to independent pharmacies, often on a take-it-or-leave-it basis, preventing pharmacies from negotiating better terms.
- Exploiting Market Power: PBMs control access to a large share of the market for prescription drug claims, giving them significant leverage over independent pharmacies. They use this power to dictate terms and underpay those pharmacies.
- Data Sharing and Algorithmic Pricing: In the case of the GoodRx Integrated Savings Program, PBMs share real-time pricing data with GoodRx, allowing them to algorithmically select the lowest reimbursement rate from competitors, further suppressing payments to pharmacies.
In July 2024, the House Committee on Oversight and Accountability released a report scrutinizing the practices of the three largest PBMs—CVS Caremark, Express Scripts, and OptumRx.
The report concluded that these PBMs have monopolized the pharmaceutical marketplace by deploying deliberate, anticompetitive pricing tactics that are raising prescription drug prices, undermining community pharmacies, and harming patients across the United States.
The National Community Pharmacists Association (“NCPA”), representing independent pharmacists, has been vocal about the detrimental effects of PBM practices. In a statement submitted to the House Oversight Committee, the NCPA highlighted how PBMs prioritize their interests, often at the expense of patients, employers, taxpayers, and community pharmacies. The association emphasized the urgent need for Congress to enact robust PBM reform legislation to address these issues.
These developments underscore the growing concern among lawmakers and industry stakeholders regarding PBM practices and their impact on independent pharmacies and patient care.
Questions About the Antitrust Class Action Lawsuit Against GoodRx, Caremark, Express Scripts, MedImpact Healthcare and Navitus Health Solutions?
To learn more about the lawsuit or discuss potential legal claims, please send us a message or contact John Kehoe, Esq., (215) 792-6676, Ext. 801, [email protected], [email protected], for a free, no-obligation legal evaluation.
About Kehoe Law Firm, P.C.
Kehoe Law Firm, P.C. is a multidisciplinary, plaintiff-side class action law firm specializing in securities fraud, breaches of fiduciary duties, and corporate misconduct. Collectively, the firm’s partners have served as Lead Counsel or Co-Lead Counsel in high-profile cases that have recovered more than $10 billion for both institutional and individual investors.
Kehoe Law Firm’s legal services are provided on a contingency-fee basis, meaning clients are not responsible for any fees or litigation expenses.
