Attorney General's News Release

May 27, 2008

Nixon, 28 other Attorneys General reach settlement with Express Scripts; Missouri to receive $246,053 in payments and costs

Jefferson City, Mo. - Missouri will receive $246,053 in payments and costs as part of a nationwide settlement with Express Scripts Inc., a pharmacy benefits management (PBM) company, Attorney General Jay Nixon announced today. Missouri is one of 28 states plus the District of Columbia to reach the $9.3 million agreement with the company, which resolves allegations about the company's drug switching program.

As part of the settlement, Express Scripts is required to significantly change its business practices so that patients and prescribers have more information about health care costs. In addition, the company will pay up to $7 million to the states in reimbursement for switches related to certain cholesterol-controlling drugs, of which Missouri will receive $181,053. The remaining $2.3 million Express Scripts will pay is for the states' investigation costs, with Missouri receiving $65,000.

Nixon filed assurance of voluntary compliance in Cole County Circuit Court today, which resolves the concerns of Nixon and the other Attorneys General that Express Scripts engaged in deceptive business practices by encouraging doctors to switch patients to different brand name prescription drugs while representing that the patients and/or health plans would save money.

"Doctors, however, were not adequately informed of the effect this switch would have on costs to patients and health plans," Nixon said. "We are pleased that these policies will be addressed through this settlement."

The settlement generally prohibits Express Scripts from soliciting drug switches when:

• The net drug cost of the proposed drug exceeds the net drug cost of the originally prescribed drug;
• The cost to the patient will be greater than the cost of the originally prescribed drug;
• The originally prescribed drug has a generic equivalent and the proposed drug does not;
• The originally prescribed drug's patent is expected to expire within six months; or
• The patient was switched from a similar drug within the last two years.

The settlement requires Express Scripts to:

• Inform patients and prescribers what effect a drug switch will have on a patient's co-payment;
• Inform prescribers of Express Script's financial incentives for certain drug switches;
• Inform prescribers of material differences in side effects of efficacy between prescribed drugs and proposed drugs;
• Reimburse patients for out-of-pocket expenses for drug switch-related health care costs and notify patients and prescribers that such reimbursement is available;
• Obtain express, verifiable authorization from the prescriber for all drug switches;
• Inform patients that they may decline a drug switch and the conditions for receiving the originally prescribed drug;
• Monitor the effect of drug switches on the health of patients; and
• Adopt a certain code of ethics and professional standards.

PBMs enter into contracts with employers and governmental health plans to process prescription drug claims for drugs provided to patients enrolled in the health plan; negotiate with drug companies to obtain volume discounts; negotiate discounts with participating retail pharmacies to provide dispensing services at a discount; and dispense drugs to patients through PBM-owned mail order pharmacies. In the 30 years since the first PBM appeared, their services have evolved to include complex rebate programs, pharmacy networks, and drug utilization reviews.

Inquiries from consumers should be directed to consumer@ago.mo.gov or 1-800-392-8222 (from within Missouri) or 573-751-3321 (outside Missouri).

All media inquiries should be directed to Press Secretary John Fougere.

E-mail      Phone: 573-751-8844         Fax: 573-751-5818