New York Attorney General Eliot Spitzer filed suit against Express Scripts Inc, accusing the company of inflating prescription drug prices by millions of dollars, Spitzer said on Wednesday.
Spitzer says the practices occurred during a five-year period, and cost the state $100 million in excess costs.
The suit alleges, among other things, that Express Scripts enriched itself by inflating the costs of generic drugs at the expense of New York State's largest employee health plan, the Empire Plan.
Express Scripts is the nation's No 3 US pharmacy benefits manager, a broker that acts as a middleman and buys drugs for employers and health plans.
Pharmacy benefits managers deal directly with pharmaceutical companies and have been under scrutiny for several years because of their ties to drug-makers and the discounts they receive.
"They are using their role as an intermediary to line their own pockets," Spitzer told reporters on a conference call, noting that practices are not limited to Express Scripts but are rampant throughout the sector.