Independent pharmacy in Iowa sues UnitedHealth and CVS
Optum Rx forced pharmacies to grant it discretion in calculating DIR fees they had to pay, the lawsuit claims.
Photo: Terry Vine/Getty Images
Osterhaus Pharmacy in Iowa has brought a class action complaint against UnitedHealth Group and affiliates Optum and Optum Rx for allegedly violating antitrust law for alleged breach of contract and on four other claims.
Optum Rx denied pharmacies access to its network of Medicare Part D beneficiaries to fill and dispense their prescriptions unless the pharmacy also entered into a second transaction compelling it to pay "DIR" (direct and indirect) remuneration fees for the services, according to the lawsuit filed in federal court on Dec. 18.
Optum Rx forced pharmacy services providers to agree to grant it discretion in setting metrics for and calculating the DIR fees pharmacies must pay, the lawsuit said.
"Optum Rx then exercised that discretion in bad faith and thereby breached the covenant," the lawsuit said.
Osterhaus is claiming breach of contract and breach of the covenant of good faith and fair dealing. It wants a declaratory judgment that the DIR fees that Optum Rx imposed are unconscionable and also a return of these fees in a claim of unjust enrichment.
A sixth claim is for "quantum meruit," or a reasonable sum of money that would require Optum Rx to pay Osterhaus and other members of the proposed class for the value of the DIR services they provided.
It wants to recover treble damages, the cost of the lawsuit and reasonable attorneys' fees for Optum Rx's alleged violations.
Optum Rx said the lawsuit is without merit.
"We are proud to partner with community pharmacies across the country to deliver care, improve the pharmacy experience and provide our members with access to the lowest possible cost for drugs and best possible care. This lawsuit is without merit and we will defend against these allegations," the company said by statement.
In September, Osterhaus brought a similar lawsuit against CVS and Caremark.
WHY THIS MATTERS
Osterhaus is bringing this action on behalf of itself individually and on behalf of a proposed class of pharmacy services providers, including but not limited to retail pharmacies, compounding pharmacies and physician dispensaries.
Osterhaus was sold to another independent pharmacy in 2022 because of the actions of pharmacy benefit managers, including Optum Rx, the complaint said.
"Independents are closing in significant numbers in key locations across the nation. They face increasing financial pressure from PBMs, which keep reducing reimbursements to increase their own profits. The trend toward vertical consolidation in the pharmaceutical services industry has exacerbated matters, as PBMs now benefit by placing Independents at a disadvantage to their in‐house pharmacies," the lawsuit said.
THE LARGER TREND
In 1965, Bob and Ann Osterhaus purchased the family‐owned pharmacy. Their son, Matt Osterhaus, began working at the pharmacy in 1983 and eventually operated it with his wife Marilyn Osterhaus, court records said.
Until Jan. 1, 2022, Osterhaus operated as Osterhaus Pharmacy and M&M Care in Maquoketa, Iowa, when it was sold to Greenwood Pharmacy, another father-son owned pharmacy based out of Waterloo, Iowa.
According to a University of Iowa study cited in the complaint, 1,231 of the 7,624 independent rural pharmacies in the nation closed between 2003 to 2018.
Twitter: @SusanJMorse
Email the writer: SMorse@himss.org
