Sixth Circuit Says Ohio’s Antitrust Action Against PBMs Belongs in Federal Court
- January 30, 2026
Ohio’s lawsuit alleging two pharmacy benefit managers (PBMs) conspired to improperly retain rebates from drug manufacturers in violation of the state’s antitrust laws should remain in federal court, the Sixth Circuit held January 27.
Reversing a lower court decision, the Sixth Circuit found the PBMs properly removed the state’s action to federal court under the federal officer removal statute.
In March 2027, Ohio Attorney General Dave Yost sued PBMs Express Scripts and Prime Therapeutics for allegedly creating “a complex ‘pay to play’ rebate system” that pushes manufacturers to increase drug prices and used their power over pharmacies to demand fees and payments based on previous sales.
The lawsuit was brought in a state trial court alleging violations of Ohio’s antitrust law, which prohibits price fixing, controlled sales, and other agreements that restrain trade and hurt competition.
The PBMs, which have contracts with the Federal Employees Health Benefits program and TRICARE, removed the action to federal district court. The state sought remand, arguing that its claims did not challenge “the operation or administration of federal health benefits programs.” A federal district court agreed to remand the action to state court.
On appeal, the Sixth Circuit determined that the PBMs were “acting under an officer of the United States” for purposes of the federal officer removal statute.
Both PBMs had contracts with the Office of Personnel Management for the FEHB program that included specific terms related to fees, discounts, rebates, and disclosure requirements. The appeals court found that contractual control satisfied the “act[ing] under” prong when the PBMs negotiate with drug manufacturers—a task that the government itself would otherwise have to perform. Express Scripts’ contract with the Department of Defense for TRICARE operated similarly.
The Sixth Circuit was not persuaded by the state’s argument that its challenge related only to the PBMs’ conduct relative to non-federal clients, noting that the PBMs conduct a single negotiation with drug manufacturers and pharmacies on behalf of all their clients. “Alleged liability arising from this negotiation process necessarily includes federal conduct,” the appeals court reasoned.
Whether the PBMs could conduct separate negotiations in the future was irrelevant given that the state sought “backward-looking relief through money damages.”
The Sixth Circuit reversed and remanded the action to federal district court.
State of Ohio ex rel. Yost v. Ascent Health Servs. LLC, No. 24-3033 (6th Cir. Jan. 27, 2026).