Oxford Health Insurance and Optum Accused of Overcharging Customers for Prescription Drugs

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A proposed class action has been filed against Oxford Health Insurance, Inc., Optum, Inc., and Optum Rx, Inc. alleging that the defendants engaged in a “fraudulent and deceptive scheme” to overcharge consumers for prescription drugs. According to the suit, Oxford Health Insurance (OHI) offers plans that allow members to share the cost of their prescription drugs with the insurance company in the form of copayments, co-insurance, or deductibles. The Optum defendants allegedly act as OHI’s pharmacy benefit manager, responsible for the relationship between the company and the pharmacies in its network. According to its policies, OHI supposedly promises to charge consumers no more than it agrees to pay its network pharmacies for the drugs. The suit argues, however, that the defendants instead charge “unauthorized and excessive amounts” for the medically necessary drugs, demand “clawbacks” from the pharmacies, and instruct the pharmacies not to disclose to consumers the actual cost of each prescription.

According to the case, the plaintiff was charged $15 copayment to fill her prescription through her OHI insurance plan. “Unbeknownst to [the plaintiff],” the complaint reads, “the $15 copayment Defendants required the pharmacy to collect from her was a premium of over 250% over the contracted fee the pharmacy was paid to fill the prescription.”

The suit argues that the defendants originally allowed pharmacies to keep the extra money they charged consumers, but then began to “claw back” the extra cash for themselves, prompting pharmacies to start disclosing to their customers that paying without insurance could be cheaper. In response, the defendants allegedly threatened pharmacies with termination from the network if they continued revealing the companies’ allegedly illegal practices.