Malpractice News: Express Scripts and CIGNA settle New York Drug Lawsuit

Malpractice News: In August 2008, Express Scripts Inc. and CIGNA Corp. settled a lawsuit filed by New York State accusing the companies of inflating prescription drug costs for Empire Health Plan, New York’s largest employee health plan.

The lawsuit alleged the companies inflated the costs of generic drugs. The complaint also alleged the companies engaged in fraudulent and deceptive practices by encouraging physicians to engage in drug switching and prescribe patients with drugs manufactured by another drug maker. Express Scripts would then receive money from the second drug company.

Under the settlement, the two companies will jointly pay $27 million for their alleged fraudulent acts that caused Empire’s drug costs to rise. From 1999 to 2003, Empire’s prescription drug costs rose from $455 million to $1 billion.

In May 2008, Express Scripts and the attorneys general for 28 states and the District of Columbia reached a separate settlement that also involved prescription drug switching. In this case, Express Scripts agreed to pay $9.3 million to the states and would also provide $200,000 to reimburse patients who incurred expenses related to the prescription switches.

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