New York State Attorney General Eliot Spitzer sued Express Scripts, estimating that the company cheated the state out of as much as $100 million in a contract to manage pharmacy benefits for the state's largest employee health plan, the Empire Plan. Express Scripts denied the allegations, saying it had saved New York more than $2 billion in drug costs since 1998, and called the matter a "contract dispute." The lawsuit alleges that the company conducted elaborate schemes to inflate the cost of generic drugs, divert millions of dollars in manufacturer rebates that belonged to the Empire Plan, and induce physicians to switch patients' prescriptions in favor of companies that paid Express Scripts money. Spitzer said he would seek restitution for any money that should have gone to the state.
The civil suit, filed in New York State Supreme Court, was the culmination of a yearlong investigation, Spitzer said. The Empire Plan, which covers more than 1 million civil service employees and retirees, spent more than $1 billion on prescription drug claims in 2003, according to Spitzer. Express Scripts said it will defend itself against the suit. "During the contract, the state got all rebates for which it contracted, and more rebates than guaranteed, initially deep retail discounts got better, and use of low-cost generic drugs increased," the company said in a news release. -- by Cinda Becker