HELENA, Mont. – Insurance Commissioner Matt Rosendale filed administrative actions today against pharmaceutical industry companies for violating the Montana Insurance Code.
Prime Therapeutics and Express Scripts are both multi-billion-dollar pharmacy benefit managers (PBMs). Prime Therapeutics is owned by Health Care Service Corporation (HCSC), the parent company of Blue Cross and Blue Shield of Montana.
The State Auditor’s office alleges that Prime Therapeutics has operated without a license in Montana since 2013. Prime has handled nearly 6 million claims in the state without a proper license. Each of those claims is a separate violation of Montana law, and each violation carries a total maximum fine of up to $30,000 (separate fines of $25,000 and $5,000 for each violation).
Prime has also failed to comply with the State Auditor’s information requests in Commissioner Rosendale’s ongoing investigation of the prescription drug industry.
The State Auditor’s office alleges that two subsidiaries of Express Scripts violated Montana licensing requirements in the course of their work with Aetna Health of Utah (formerly Altius Health Plans). Aetna contracted with the Montana Health CO-OP from 2013 until December of last year. Aetna and both Express Scripts companies have failed to fully comply with the State Auditor’s information requests. The companies could face a fine of up to $30,000 for each violation of the law.
Consequences, including fines, against the companies will be determined in the coming weeks through the administrative action process.
“During our work to shine a light on the pharmaceutical industry’s activities, we uncovered serious violations of Montana’s insurance laws,” Rosendale said. “These companies need to understand that we are serious about consumer protection and that they will be held accountable for their actions. We might be a small, rural state, but Montanans won’t put up with this type of nonsense from the prescription drug industry.”
Rosendale has been fighting for greater transparency in the health care and prescription drug industries as Montana’s insurance commissioner, and the State Auditor’s office has taken the lead on addressing the high cost of prescription drugs since the 2017 legislative session. Today’s agency actions come after months of investigation by Rosendale and the State Auditor’s legal department.
Pharmacy benefit managers (PBMs) are third-party administrators of prescription drug programs, acting as the “middle men” who negotiate contracts and pricing among drug manufacturers, insurance companies, and pharmacies. Montana requires third-party administrators like PBMs to be licensed and comply with insurance regulations overseen by the Commissioner of Securities and Insurance.
President Donald Trump’s Health and Human Services secretary has also called for examining the role of PBMs in the prescription drug industry.
Rosendale supported SB 362 (Buttrey, R-Great Falls) and HB 123 (Curtis, D-Butte) in the 2017 legislative session to bring more transparency into the health care industry. HB 123 died in conference committee as SB 362 went to the governor (it was vetoed). Rosendale also supported Rep. Jonathan Windy Boy’s (D-Box Elder) HJ 17 resolution to study prescription drug costs. The Legislature ranked the pharmacy study in their top three most important interim efforts, and Rosendale’s office has been the lead investigator bringing information to the legislative interim committee.
The Notice of Proposed Agency Action against Prime Therapeutics is available HERE.
The Notice of Proposed Agency Action against Express Scripts, Inc., Express Scripts Administrators, LLC, and Aetna Health of Utah is available HERE.