UHC Sued By Investors, Kroger Beaten By ExpressScripts, & Top PBMs of '24

Hey all,

Happy Tuesday! I was especially struck by how Kroger, which is 25 and the Fortune 500, doesn’t have sufficient scale to battle ExpressScripts. That plus the Drug Channels PBM post show just how much power PBMs have in the United States. Enjoy the rundown!

Jacob Brody (Co-Founder & CEO, ZorroRX)

(STAT) CalPERS Lawsuit Against UnitedHealth Over Medicare Advantage Scheme

CalPERS, the largest U.S. public pension fund, has accused UnitedHealth Group of deceiving investors by hiding an illegal upcoding scheme in its Medicare Advantage program, allowing top executives to profit from inflated stock prices while defrauding taxpayers. The amended class-action lawsuit, citing STAT’s Health Care’s Colossus series and recent federal investigations, claims UnitedHealth used in-home visits, pressure tactics, and questionable diagnostic tools to exaggerate patient conditions and boost revenue, while publicly denying wrongdoing. Dodging accountability to patients and members is practically a job requirement at UHC—but doing it to investors? Now that’s a plot twist. Full Article

(Milliman) Kroger’s Exit from Express Scripts’ Medicare Part D Network

Kroger’s departure from Express Scripts’ Medicare Part D network on January 1, 2023, resulted in a major market shift, with the grocer retaining only 44% of its prior prescription volume over the following six months. Most of this retention came from direct contracts with health plans, plan sponsors switching PBMs, and beneficiaries enrolling in new plans where Kroger remained in-network. The disruption funneled 94.2% of displaced prescriptions to competing retail pharmacies, especially national chains like Walgreens, and may have contributed to decreased star ratings for some impacted Part D plans. The case highlights the operational and financial complexities pharmacies face in today’s PBM landscape and the need for strategic relationships to preserve patient access. Full Article

(Drug Channels) Top Pharmacy Benefit Managers of 2024

Express Scripts claimed the top spot among pharmacy benefit managers in 2024, processing nearly 1.9 billion 30-day equivalent prescription claims—up 40% from 2023—largely due to its new contract with Centene. While the “Big Three” PBMs—Express Scripts (Cigna), CVS Caremark (CVS Health), and Optum Rx (UnitedHealth Group)—still control about 80% of the market, recent contract shifts, acquisitions, and legal challenges reflect a changing industry landscape marked by growing vertical integration and pressure on smaller players. Full Article.