LITTLE ROCK – Attorney General Leslie Rutledge is announcing a settlement with Centene Corporation and its subsidiaries Arkansas Total Care, Inc., Centene Management Company, and Envolve Pharmacy Solutions, Inc. This settlement will end General Rutledge’s review of the business practices of Arkansas Total Care and its Pharmacy Benefit Manager (PBM), Envolve, which began with allegations that Centene was using these companies to overcharge the State of Arkansas for medications in its Medicaid program. To settle the claims, Centene must pay $15,228,318.72 to the State of Arkansas.
“I have successfully fought predatory pharmacy benefit managers in the nation’s highest Court, and I continue to hold these providers accountable for gouging Arkansans with unreasonably high costs for their prescriptions,” said Attorney General Rutledge. “I will always fight to protect Arkansans, and this settlement with Centene is a big step in repairing the damage it did by taking advantage of Arkansans.”
Arkansas Medicaid had tasked Envolve to assist in managing its prescription drug program. PBMs, such as Envolve, contract with and reimburse pharmacies for drugs, create preferred drug lists, and negotiate rebates with pharmaceutical companies. Envolve subcontracted its responsibilities for the payment of pharmacies to CVS Caremark. When Envolve reported to Arkansas Medicaid the costs paid to pharmacies for the drugs, Envolve reported inflated amounts of pharmacy costs by failing to disclose substantial discounts in ingredient costs and dispensing fees which Envolve received under the Envolve-CVS subcontract. This conduct by Envolve occurred in 2017 and 2018 and ended with termination of the Envolve-CVS subcontract.
Centene must pay $15,228,318.72 to the State of Arkansas in two installments within the next year and 45 days. Going forward, Centene has agreed to provide Arkansas with full transparency related to the adjudication and payment of all pharmacy benefit claims, including the exact amount paid to the pharmacy for each pharmaceutical claim.
In 2018, Attorney General Rutledge announced an investigation into PBM CVS Caremark. In 2020, Attorney General Rutledge won a unanimous victory at the U.S. Supreme Court upholding Arkansas’s pharmacy benefit manager regulations in Rutledge v. Pharmaceutical Care Management Association. Attorney General Rutledge will continue to aggressively investigate PBMs responsible for overcharging consumers and plummeting medication reimbursement rates paid to local pharmacies. The Attorney General’s Office is actively looking for any violations of the law committed by PBMs in Arkansas and will continue to enforce our laws to protect Arkansas consumers.