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New York to sue opioid manufacturers over high health insurance premiums

The opioid prescription investigation press conference, pictured from left: Dr. Howard Zucker, state Commissioner of Health, Gov. Andrew M. Cuomo and Linda Lacewell, superintendent of the state Department of Financial Services.
September 11, 2019 06:16 pm Updated: September 11, 2019 09:24 pm

NEW YORK — Gov. Andrew Cuomo announced Tuesday an upcoming state lawsuit against opioid manufacturers and distributors for higher health insurance premiums caused by the opioid crisis.

The lawsuit, brought by the state Department of Financial Services, alleges that the pharmaceutical companies defrauded health insurance companies. In a press conference Tuesday afternoon, Superintendent of Financial Services Linda Lacewell said the fraud resulted in New York consumers shouldering a total cost of $2 billion in higher health insurance rates caused by the opioid crisis.

“It was an industry-wide conspiracy,” Cuomo said. “Health insurance companies were paying these prescriptions. They were then paying for the refill of the prescription…, the emergency room when the person overdoses…, the treatment facility when the person goes into treatment.”

There is an ongoing investigation being conducted by DFS regarding the alleged fraud, including hearings being held across the state, after which the lawsuit will be filed, Cuomo said.

The lawsuit is targeting opioid manufacturers, distributors and pharmacy benefit managers. Former lawsuits have not typically targeted pharmacy benefit managers in the past, who are the intermediaries between opioid manufacturers and health care providers and insurers.

“This opioid scheme has infected our health system and health insurance system,” Lacewell said.

Lacewell said DFS will be fining up to $5,000 per violation plus the amount of the fraudulent claim. Recovered funds may be reimbursed to consumers through rebates or lower premiums in the future, she said.

In the years 2017 and 2018, Columbia and Greene counties, combined, saw 50 deaths, 155 emergency room visits and 23 hospitalizations due to opioid overdoses, according to the New York State Department of Health. As a whole, New York had over 1,700 deaths caused by opioid overdoses in 2018.