A Blueprint for Action: Michigan’s Lawsuit Against Express Scripts and Prime Therapeutics Signals a Turning Point for Independent Pharmacies, Plan Sponsor, Patients, and State Enforcement

On April 28, 2025, the Michigan Attorney General’s Office filed a groundbreaking antitrust lawsuit in federal court against Express Scripts, Inc., Evernorth Health, Inc., and Prime Therapeutics LLC, alleging a long-running conspiracy to fix pharmacy reimbursement rates, eliminate competition in the retail pharmacy services market, and drive independent pharmacies out of business. The complaint meticulously documents an alleged illicit horizontal agreement—referred to as the “Prime-ESI Agreement”—that has reshaped the state’s prescription drug marketplace to the detriment of pharmacies, plan sponsors, and patients alike.

This legal action is more than a state-specific dispute. It could be used as a playbook for other Attorneys General across the country to follow. The facts presented, the legal theories asserted, and the broad public harm alleged provide a replicable framework for enforcing state and federal antitrust laws against pharmacy benefit managers (PBMs) that abuse their dominant market positions.

The Alleged Cartel: Fixing Pharmacy Payments Through Collusion

At the heart of the lawsuit is a 2019 agreement between Express Scripts, one of the “Big Three” PBMs, and Prime Therapeutics, a smaller competitor but considered one of the Top 6 PBMs. In a competitive market, Prime would negotiate its own pharmacy contracts and offer higher reimbursement rates to entice pharmacies to join its network—particularly given its smaller market share. But instead, the complaint alleges, Prime agreed to adopt Express Scripts’ reimbursement rates and fee structures wholesale, eliminating competition in the retail pharmacy services market. The Michigan AG made sure to allege that Express Scripts and Prime did not otherwise combine operations or services; the alleged agreement was limited only to reimbursement rates and fees.

According to the Michigan AG, this was no mere subcontracting arrangement—it was an unlawful horizontal conspiracy. Prime not only mirrored Express Scripts’ reimbursement terms, it also abandoned its own pharmacy negotiations entirely. In exchange, Prime received access to Express Scripts’ buying power, and ESI received administrative fees on each Prime claim, effectively turning what should have been a competitor into a profit-generating extension of ESI’s market dominance.

This collusion, the complaint contends, suppressed pharmacy reimbursement on Prime claims by at least 20%. Critically, these suppressed rates were not passed on to health plans or consumers, but retained by Express Scripts and Prime, inflating their profits while forcing pharmacies to operate below cost.

The Impact: Devastation of Michigan’s Pharmacy Landscape

The numbers speak for themselves. As detailed in the complaint, in just the first six months of 2024, 272 pharmacies closed in Michigan—more than any other state. Approximately half of Detroit’s neighborhoods are now classified as “pharmacy deserts.” Northern Michigan residents must drive over 45 minutes to fill a prescription. The decline of both independent and chain pharmacies—accelerated by artificially low reimbursement rates—has had cascading effects on access to care, medication adherence, and public health outcomes.

In Michigan’s Medicaid and commercial markets, the complaint alleges that Express Scripts now controls an astounding 89% of the PBM services market—possibly the largest market share held by any PBM in any state. In regions like Jackson and Muskegon, the complaint shows that figure exceeds 94%. This concentration of power, the Michigan AG argues, enables Express Scripts to dictate where patients can access medications and steer business to its affiliated mail-order and specialty pharmacies—“Express Scripts Pharmacy” and “Accredo”—at the expense of unaffiliated community providers.

The lawsuit highlights how concentration in this industry is not only economic—it is existential. When pharmacies close, residents lose access to vaccinations, emergency contraception, naloxone, and personalized counseling. Elderly and low-income patients disproportionately suffer. And in rural areas, the local pharmacy is often the only touchpoint in the healthcare system.

A Tale of Vertical Integration and Self-Dealing

The Michigan complaint calls out vertical integration as a root cause of market dysfunction. As the complaint explains, Express Scripts is owned by The Cigna Group, which also owns the insurer Cigna Healthcare and its own pharmacies. This vertical integration, Michigan alleges, suppresses outside competition, steers patients to affiliated pharmacies, and recaptures profit margins internally.

This structure is not limited to Express Scripts. All of the Big Three PBMs—ESI, CVS Caremark, and OptumRx—are vertically integrated with insurers and pharmacy operations. The Michigan AG’s complaint echoes what healthcare stakeholders have argued for years: vertical integration enables PBMs to act as both payer and provider, manipulating reimbursement, pharmacy access, and benefit design to enrich themselves at the cost of everyone else in the system.

The complaint even cites internal presentations and public statements by PBM executives admitting that patient steering to affiliated pharmacies is a primary driver of revenue. That strategy includes not just mail-order and specialty drug dispensing, but also tactics like formulary manipulation, network exclusion, and post-adjudication clawbacks through DIR (direct and indirect remuneration) fees and performance penalties.

Legal Claims and Remedies Sought

The Michigan Attorney General brings a well-structured series of claims under both federal and state law:

• Section 1 of the Sherman Act – For unlawful agreement in restraint of trade.
• Michigan Antitrust Reform Act – The state-law analogue of the Sherman Act.
• Public Nuisance – Asserting that the defendants’ conduct harmed public health and access to care.
• Unjust Enrichment – Seeking disgorgement of unlawfully obtained profits.

The complaint seeks injunctive relief, trebled monetary damages, and the unwinding of the Prime-ESI Agreement. But its significance goes beyond litigation remedies—it positions state enforcement as a powerful counterweight to federal inaction and regulatory capture.

A Playbook for Other Attorneys General

For AGs in other states, Michigan’s lawsuit offers a detailed factual and legal blueprint. It sets forth a credible theory of harm that connects PBM market conduct with real-world effects on pharmacies, plan sponsors, and patients. It does so using extensive economic data, Federal Trade Commission (FTC) research, industry admissions, and internal PBM statements. It also focuses on a singular alleged conduct – an illegal agreement – as opposed to broad allegations of general unfair competition.

The complaint’s framework can be replicated and tailored to conditions in other states:

• Market Definition: Michigan clearly defines the relevant market (retail pharmacy dispensing services in the United States, or at least in Michigan).
• Anticompetitive Conduct: The complaint establishes that PBMs, as horizontal competitors, cannot lawfully agree to align reimbursement terms or eliminate price competition and articulates PBMs’ role in suppressing provider reimbursement.
• Market Effects: Data on pharmacy closures, rate suppression, vertical self-preferencing, and inflated plan costs are specific, actionable, and devastating.

Any AG investigating PBMs in their own jurisdiction should consider:

1. Gathering pharmacy reimbursement data and DIR fee disclosures.
2. Identifying existing or past network “partnerships” between large and mid-sized PBMs.
3. Interviewing independent pharmacy owners about coercive contracting and exclusionary conduct.
4. Consulting with Medicaid and public sector plan administrators on cost inflation, plan design manipulation, and drug access limitations.
5. Using parens patriae authority to bring civil enforcement actions on behalf of residents and the state economy.

The Broader Policy Context

Michigan’s lawsuit arrives at a moment of heightened national scrutiny of PBMs. The FTC continues its sweeping investigation into PBM business practices while its lawsuit against PBMs regarding insulin prices is pending. Congressional committees are holding hearings on transparency and vertical integration. And multiple states—including Arkansas, Oklahoma, and Texas—have enacted PBM reform laws over the past five years.

But direct enforcement is still lacking. The PBM industry has complex pricing models, rebate opacity, and contractual clauses making enforcement difficult. Michigan’s complaint brings sunlight to those practices, describing them essentially as anticompetitive conduct designed to extract supracompetitive profits from a captive marketplace.

It also reframes the pharmacy access issue not just as a healthcare or rural development problem, but as a competition law problem. That shift is essential to empowering enforcement agencies to act decisively.

Conclusion: A Turning Point for State Action

Michigan’s action against Express Scripts and Prime Therapeutics is a detailed and aggressive PBM enforcement case. It could be used as a model—not just for judicial remedy, but for strategic intervention by state Attorneys General on behalf of residents, small businesses, and health plan fiduciaries.