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UnitedHealth Accused of Gouging Customers on Prescription Drugs

  • Customers say insurer had secret system to reap excessive fees
  • Company demanded ‘clawback’ co-payments from pharmacies

Some UnitedHealth Group Inc. customers claim the health insurer defrauded them by setting up a system that secretly overcharged for prescription drugs.

UnitedHealth customers made co-payments far in excess of the costs of actual drugs, sometimes paying $50 for a drug that cost the insurer less than $15, according to a lawsuit filed Tuesday in Minnesota.

The accusations follow recent scandals over inflated drug prices involving Mylan NV’s EpiPen allergy treatment and former Turing Pharmaceuticals Chief Executive Officer Martin Shkreli’s more than 5,000 percent price hike for the drug Daraprim in 2015. Turing’s medicine treats a rare parasitic disease.

UnitedHealth’s overcharges were “improper and illegal” since the insurer was already paid to provide prescription drugs through health-insurance premiums, according to the complaint. The lawsuit, which seeks class-action status on behalf of tens of thousands of customers, also accuses the insurer of clawing back the excess payments from pharmacies to improve its bottom line. 

Pharmacy Benefits

UnitedHealth hasn’t yet been served with the complaint, spokesman Tyler Mason said Wednesday.

“Pharmacy benefits are administered in line with the coverage described in the plan documents,” Mason said in an e-mail.

It’s not the first time UnitedHealth has been accused of overcharging customers for prescription drugs. The Minnetonka, Minnesota-based insurer was sued in 2000 for allegedly forcing consumers to hand over co-payments higher than specified by their plan contracts.

UnitedHealth agreed to pay about $10 million to resolve the over-charging claims spanning a three-year period starting in 1997. The insurer didn’t admit wrongdoing as part of the settlement, according to court filings.

The new case is Mohr v. UnitedHealth Group Inc., 16-cv-03352, U.S. District Court for the District of Minnesota.

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