Class action suit seeks to uphold in-network drug benefits for Ligonier pharmacy customers

A federal court could decide whether customers of Ligonier Pharmacy and several additional locations operated by Martella’s Pharmacies can have in-network insurance coverage through Highmark or UPMC Health Plan when they fill their prescriptions.

A Pittsburgh law firm has filed a class-action lawsuit on behalf of customers against those insurers and Express Scripts, a pharmacy benefit manager (PBM) that decided to drop Martella’s from its provider network. PBMs like Express Scripts serve as intermediaries that work with health insurers, pharmacies and drug manufacturers.

The suit contends Highmark and UPMC Health “approved of, participated in and/or directed the (network) termination decisions at issue.”

Attorneys Matthew Scanlon and Timothy Wojton allege the move to drop Martella’s from the provider network was “without legitimate business justification, without reasonable transparency to affected customers and without implementing any transitional safeguards required under Pennsylvania law governing fair trade and consumer protection.”

The class action originally was filed in Cambria County and then removed to federal court. Martella’s is not a participant in the suit.

The plaintiffs are pursuing claims of breach of contract with a third-party beneficiary; interference with prospective economic relations; and unfair trade practices.

The plaintiffs were granted an initial Aug. 15 emergency injunction in Cambria County Court against the PBM dropping Martella’s from the network. After a court ruling that the injunction had expired, Express Scripts notified Martella’s once more it was being dropped, effective Oct. 21 — without sufficient warning to the affected pharmacies or their customers, the suit states.

According to the suit, Martella’s termination from the network was indicated as being effective on the same day as it received the notice.

Scanlon and Wojton are asking the federal court to award their clients damages and coverage of attorney fees and to order an injunction that would restore Martella’s to Express Scripts’ pharmacy network.

Several customers who stopped Friday afternoon at Ligonier Pharmacy to fill prescriptions were unaware of the class-action suit or had pharmacy coverage through an insurer other than Highmark or UPMC.

Susan Bonacuro, 75, of Cook Township is among customers whose accounts were transferred to Ligonier Pharmacy after another independent pharmacy in Ligonier — LVRx — closed its doors July 28.

A Facebook post by the store attributed the decision to low reimbursement rates it was receiving from PBMs for the medications it provided to customers.

“PBMs who own their own mail order pharmacies have been reimbursing pharmacies under cost,” the post stated.

Bonacuro said she’s always had to turn to yet a third pharmacy for a particular brand name prescription medication.

“It’s just so inconvenient,” she said.

So far, she said, she’s had no other problem using her UPMC Health Plan to obtain prescriptions at Ligonier Pharmacy, including a less-available medication for her husband.

But she lamented the loss of LVRx and worried about her future access to prescriptions, given developments in the pharmacy industry.

“I’m just disgusted with the whole thing,” she said. “I don’t like all this.

“The other pharmacy we used to go to went out of business because of it. We were loyal to them; they took care of us.”

Now, at Ligonier Pharmacy, she said, “I hope that they stay in business, because you get to know your pharmacist.”

Another Ligonier Pharmacy customer, Jerry Stalnaker, 88, of Ligonier, said he isn’t insured by either UPMC or Highmark, but he expressed sympathy for others whose in-network coverage may be threatened.

“I’m lucky,” he said. “I feel sorry for a lot of people; they’re getting squeezed.

“Its really a messy situation. A lot of pharmacies have gone out of business.”

The class-action suit contends the defendants’ decision to drop Martella’s as an in-network provider was deceptive because it was not clearly disclosed to patients and was allegedly intended “to steer patients to PBM-affiliated or preferred chain pharmacies for profit, without regard to patient harm. …

“When Express Scripts ousts Martella’s from defendants’ networks, thousands of Pennsylvania patients lose affordable access and are automatically funneled to large, PBM-controlled pharmacies.”

The suit also argues the defendants’ actions suppress competition and reduce pharmacy options in rural and underserved areas — “creating pharmacy ‘deserts’ that deprive Pennsylvania residents of reasonable local access to medications.

Scanlon and Wojton said Martella’s customers they represent are subject to increased out-of-pocket costs and travel expenses by switching to PBM-affiliated pharmacies.

The customers, they said, also face “loss of continuity in pharmacist counseling, adherence support and medication safety checks” along with “heightened risk of medication error.”

The Martella’s-affiliated store and a Giant Eagle supermarket are the primary remaining outlets for prescription medications in Ligonier.

According to its website, Martella’s has other pharmacy locations in Johnstown and in Central City and Windber, in Somerset County. It operates a prescription center in Boswell, Somerset County.

An Express Scripts spokesperson said in a statement: “Martella’s Pharmacies has been removed from our pharmacy network due to its repeated failure to properly disclose it and its affiliated pharmacists’ disciplinary histories and actions relating to the safeguarding and dispensing of controlled substances.

”We previously notified affected members of the decision to terminate Martella’s Pharmacies and provided options for transferring prescriptions to several other in-network pharmacies. We delayed Martella’s Pharmacies’ termination while awaiting the court’s guidance, and during that time, we repeatedly offered support if members were experiencing any issues with their prescriptions.”

Brad Wasser, an attorney representing Martella’s owner Jackie Martella, declined comment because of the ongoing litigation, as did a Highmark representative. UPMC did not respond to a request for comment.

Express Scripts on Oct. 27 moved to dismiss the class-action suit. The motion argues the plaintiffs don’t have standing to pursue a breach of contract claim or to sue to enforce any agreement involved in Martella’s relationship with the PBM.

The motion argues the plaintiffs can’t claim interference with economic relations “because to the extent any harm resulted from the termination of Martella’s from Express Scripts’ pharmacy network, it is Martella’s, not its customers, who would suffer any resulting harm.”

As for a claim of unfair trade practices, Express Scripts states in its motion “there is no wrongful act or representation on which plaintiff or the putative class allegedly justifiably relied.”