The legal warning shots have been fired and the story is playing out like a modern day David and Goliath in the health insurance industry.

Stakes

Irmat Pharmacy indicates it was given notice by healthcare giant OptumRx that the pharmacy services provider will be dropped from the network at the end of January. Park Irmat Drug filed a lawsuit in New York Supreme Court against OptumRx looking to block exclusion or termination. OptumRx runs a similar mail-order pharmacy that is in competition with Park Irmat Pharmacy, especially in the dermatologic medicine field.

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Pharmacy

Irmat Pharmacy is a compounding, specialty, mail-order pharmacy that has focused on dermatologic products for 30 years. They have a large client and prescriber base that services wide and expansive geographical areas. With this current action, they and their employees are at risk of losing a substantial portion of their Business and livelihood.

Perspective

According to Reuters, Irmat is the latest dropped by an insurance company after drug maker Valeant Pharmaceuticals International Inc was accused of using its influence with Philidor Rx Services to incorrectly inflate profits. Valeant has denied the allegations and cut ties with Philidor, prompting other payers to follow suit.

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OptumRx

OptumRx is a division of UnitedHealth Group, Inc based in Minnetonka, Minnesota. UnitedHealth Group is a Fortune 500 company ranking of sixth in the United States. They provide healthcare and plan services to more than 70 million people in the U.S., with revenues of $11 billion. In 2010 UnitedHealthcare was readers’ choice, “Best health plan provider” by Business Insurance magazine.

Consolidation

Stakeholders, patients, manufacturers, and providers have all been hit with the consequences of rising health care utilization and concurrent costs.

The far-reaching scope of the action has yet to be determined. As the population increases and more and more people use pharmaceutical medications as a way to lower costs of hospital and physician visits, health insurers will continue to look for ways to consolidate delivery and reduce overall costs.

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