Latest news with #OptumRx
Reuters
4 days ago
- Business
- Reuters
Optum picks new fight to kick law firm Motley Rice off opioids case
Aug 7 (Reuters) - (Billable Hours is Reuters' weekly report on lawyers and money. Please send tips or suggestions to opens new tab.) UnitedHealth's pharmacy benefits manager is trying again to get prominent plaintiffs law firm Motley Rice booted from a lawsuit over the company's alleged role in the U.S. opioid crisis, citing the firm's past work for state and local governments. OptumRx last week asked a federal magistrate judge in Utah to disqualify Motley Rice as the attorneys for the state, which has accused OptumRx of having "incredible knowledge and control over the flow of opioids into our communities." Optum has said that all the claims against it are without merit. OptumRx said Motley Rice has obtained confidential information about how the company works through its prior representations of Chicago, the District of Columbia and Hawaii in other investigations, and then began actively litigating against OptumRx in opioid cases around the country. "These ethical violations do not turn on Motley Rice's intentions or on whether the firm's lawyers actually use the confidential information gathered in the government investigations," OptumRx said in its July 31 filing, opens new tab. "It is enough that Motley Rice could use that confidential information in other litigation against OptumRx." Motley Rice, OptumRx and UnitedHealth did not respond to requests for comment. OptumRx is represented in the case by lawyers from Alston & Bird and Parr Brown Gee & Loveless. A spokesperson for the Utah attorney general's office — which is also representing the state — declined to comment. The state said on Wednesday in a court filing that it will oppose OptumRx's bid to bounce Motley Rice from the case. It is common for government entities to bring in private law firms for complex litigation, with payment often contingent on a successful outcome. Companies have criticized and pushed back on the arrangements. DoorDash clashed with the city of Chicago, which tapped Cohen Milstein Sellers & Toll for its lawsuit against the restaurant delivery service, arguing that the arrangement violated its due process rights. The city and DoorDash reached a settlement in principle over their dispute in June. In April, a pro-business legal advocacy group urged U.S. House leaders to examine the District of Columbia's practice of hiring plaintiffs law firms for cases brought by the city's attorney general. OptumRx said Utah's professional rules of conduct prohibit Motley Rice from representing the state, arguing there is "no question that Motley Rice could use the confidential government information to OptumRx's material disadvantage here." OptumRx told the court that it was not challenging Utah's ability to seek the counsel of its choice. The company has tried in other opioid cases to force Motley Rice to sit on the sidelines, but has so far failed. In one of those cases, U.S. District Judge Dan Aaron Polster in Cleveland last year said Motley Rice's "successive and simultaneous" work for private clients, while also "wearing the mantle of authority of a public entity," poses a serious risk that the firm's power could be used to benefit a private client or create a conflict of interest. But Polster ruled against OptumRx's bid to disqualify Motley Rice, finding that the company was already required to turn over all relevant documents in the case, and for not challenging Motley Rice's representation earlier. -- Jones Day partner and judicial nominee Eric Tung, opens new tab disclosed receiving $925,000 in income last year from the firm on a financial disclosure form that he submitted as part of the confirmation process. Tung reported $850,000 for 2023. Tung is a nominee to the San Francisco-based 9th U.S. Circuit Court of Appeals. Tung, based in Los Angeles and a Jones Day partner since 2023, is a former law clerk to both Supreme Court Justice Neil Gorsuch and Supreme Court Justice Antonin Scalia. Financial disclosures are mandatory filings for court and agency nominees, and they can offer a window into pay at law firms and other employers. Tung did not immediately respond to a request for comment. -- Plaintiffs firms Hagens Berman and Cohen Milstein have asked, opens new tab a federal judge in Chicago to award them more than $45 million in legal fees for their work on chicken price-fixing settlements worth $181 million. Their request follows litigation in the 7th U.S. Circuit Court of Appeals over a prior fee award to the firms. The appeals court in July ruled, opens new tab that the firms were entitled to 26.6% of the settlement fund. "This case presented a high-risk conspiracy claim and required the plaintiffs to litigate against numerous defendants, significantly increasing both the burden and complexity of the proceedings," the plaintiffs told U.S. District Judge Thomas Durkin. Read more: Lawyers face objections to multimillion-dollar fees after no-cash settlement with Schwab Uber dials up new fights with plaintiffs lawyers New law firms bank on 'boutique' edge
Globe and Mail
28-07-2025
- Business
- Globe and Mail
Can Optum Support UnitedHealth's Profit Amid Industry Headwinds?
As UnitedHealth Group UNH is set to unveil second-quarter earnings on July 29, all eyes are on its dynamic platform, Optum. With a quarter filled with regulatory challenges and margin pressures in the health insurance space, Optum's performance can be a stabilizing force that assures investors. Optum's diverse business model, which covers everything from pharmacy services to data analytics and value-based care, gives UNH a solid advantage. In the second-quarter 2025, even as medical costs are expected to have surged due to a rise in outpatient visits and elective procedures, Optum's growth is likely to have provided a buffer. In 2024, Optum's revenues grew 12%, followed by 4.6% growth in 1Q 2025. In 2Q 2025, the Zacks Consensus Estimate for Optum's revenues indicates a 7.3% year-over-year increase from the year-ago level of $62.9 billion. OptumHealth is ramping up its value-based care model, which encourages better health outcomes while keeping costs down. This approach helps to cushion the impact of rising claims in the sector. OptumInsight is making waves with its tech and data-driven services, boosting operational efficiencies not only for external clients but also within UNH itself. OptumRx has established itself as a stable player by leveraging its scale in pharmacy benefit services. However, the current administration's scrutiny of PBM pricing practices poses a significant operational risk. If this quarter shows either stable or improved margins from Optum, it could boost investor confidence, suggesting that UnitedHealth's integrated strategy still has long-term potential, even in the unpredictable world of healthcare. How Are Competitors Faring? Some of UNH's major competitors in the healthcare service provider space are Elevance Health Inc ELV and The Cigna Group CI. Elevance is doubling down on its Carelon services brand, focusing on analytics, digital health and pharmacy. The segment's operating revenues rallied 36.1% year over year in the second quarter of 2025. Elevance's operating revenues rose 14.3% year over year in the same quarter. Cigna's health services division, Evernorth, offers a range of services, including pharmacy benefits, behavioral health support and data analytics. The unit's adjusted revenues climbed 16% year over year in the first quarter of 2025. Cigna is set to report on its second-quarter results on July 31. UnitedHealth's Price Performance, Valuation & Estimates Shares of UNH have declined 44.5% in the year-to-date period compared with the industry 's fall of 36.7%. Image Source: Zacks Investment Research From a valuation standpoint, UnitedHealth trades at a forward price-to-earnings ratio of 12.2, above the industry average of 11.2. UNH carries a Value Score of A. Image Source: Zacks Investment Research The Zacks Consensus Estimate for UnitedHealth's 2025 earnings is pegged at $21.15 per share, implying a 23.5% drop from the year-ago period's actual. The stock currently carries a Zacks Rank #4 (Sell). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. 5 Stocks Set to Double Each was handpicked by a Zacks expert as the favorite stock to gain +100% or more in the months ahead. They include Stock #1: A Disruptive Force with Notable Growth and Resilience Stock #2: Bullish Signs Signaling to Buy the Dip Stock #3: One of the Most Compelling Investments in the Market Stock #4: Leader In a Red-Hot Industry Poised for Growth Stock #5: Modern Omni-Channel Platform Coiled to Spring Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor. While not all picks can be winners, previous recommendations have soared +171%, +209% and +232%. Download Atomic Opportunity: Nuclear Energy's Comeback free today. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. UnitedHealth Group Incorporated (UNH): Free Stock Analysis Report Cigna Group (CI): Free Stock Analysis Report Elevance Health, Inc. (ELV): Free Stock Analysis Report
Globe and Mail
18-07-2025
- Business
- Globe and Mail
CVS Health's Caremark to Lead CalPERS' PBM Vision: What's at Stake?
Rising prescription drug costs remain a top healthcare concern, with pharmacy benefit managers (PBMs) facing heightened scrutiny for their role in managing prescription drug benefits for insurers and health plans. CVS Health 's CVS Caremark business recently secured a new pharmacy benefits contract with The California Public Employees' Retirement System (CalPERS) — the largest public pension fund in the United States. The five-year agreement replaces OptumRx, UnitedHealth Group 's UNH PBM, which had served CalPERS members over the past nine years. Starting Jan. 1, 2026, Caremark will provide outpatient prescription drug benefits to nearly 587,000 members enrolled in Basic or Medicare HMO and PPO plans, which is roughly 40% of CalPERS' 1.5 million beneficiaries. CVS will also work closely with CalPERS to develop a range of options for managing formulary changes that could affect copays or require switching to an equally effective alternative. Essentially, CVS Caremark was selected over other vendors for its ability to deliver more affordable drug benefits, and its commitment to strong contract terms around accountability, transparency and groundbreaking financial guarantees. The company puts $250 million at risk if it fails to meet targets for controlling pharmacy benefit costs and delivering clinical quality outcomes tied to improving care for high blood pressure and diabetes. The contract positions CVS Caremark at the forefront of CalPERS' efforts to create a model that can serve as 'a blueprint for purchasers nationwide'. This year, CVS Health also opted to prefer Wegovy over Zepbound on its commercial template formularies. The move is designed to promote competition in reducing drug costs and enable broader, more affordable coverage for weight management medications. Clients using CVS Caremark's template formularies could save 10-15% annually in the anti-obesity medication space as a result of this strategic change. Updates From CVS Health's PBM Peers The global PBM market is expanding, with CVS Caremark, OptumRx and Express Scripts (Cigna) dominating the market. Other prominent players include Elevance Health ELV, which offers pharmacy services through its CarelonRx unit. ELV had just released its second quarter-2025 earnings results, with higher CarelonRx product revenues driving a 33% year-over-year increase in Carelon operating gains. The growth in CarelonRx operating revenues was mainly due to higher prescription volume from rising pharmacy membership and contributions from recent acquisitions. Humana HUM, too, operates a PBM business under its Insurance segment. Humana recently announced a partnership with healthcare software company Epic, becoming the first health insurer to integrate health plan information directly into the MyChart accounts. This enables Humana Medicare Advantage members to access their insurance details, such as vital coverage information, benefits, contacts and other resources, in the same platform where they manage the rest of their care. CVS' Price Performance, Valuation and Estimates In the past year, CVS Health shares have risen 6.3% against the industry's 17.7% fall. CVS shares are trading at a forward one-year price-to-earnings ratio of 9.60 compared to the industry average of 14.00. The stock carries a Value Score of A. Image Source: Zacks Investment Research Analyst estimates for the company's 2025 and 2026 earnings are showing an upward trend. Image Source: Zacks Investment Research CVS stock currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today's Zacks #1 Rank stocks here. 5 Stocks Set to Double Each was handpicked by a Zacks expert as the favorite stock to gain +100% or more in the months ahead. They include Stock #1: A Disruptive Force with Notable Growth and Resilience Stock #2: Bullish Signs Signaling to Buy the Dip Stock #3: One of the Most Compelling Investments in the Market Stock #4: Leader In a Red-Hot Industry Poised for Growth Stock #5: Modern Omni-Channel Platform Coiled to Spring Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor. While not all picks can be winners, previous recommendations have soared +171%, +209% and +232%. Download Atomic Opportunity: Nuclear Energy's Comeback free today. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. UnitedHealth Group Incorporated (UNH): Free Stock Analysis Report Humana Inc. (HUM): Free Stock Analysis Report CVS Health Corporation (CVS): Free Stock Analysis Report Elevance Health, Inc. (ELV): Free Stock Analysis Report
Time of India
16-07-2025
- Health
- Time of India
Many US employers plan to pare health benefits as weight-loss spending soars
New York: More than half of large U.S. employers plan to scale back healthcare benefits next year as rising costs from weight-loss and specialty drugs squeeze budgets, according to a new survey released by consulting firm Mercer on Wednesday. Among employers with 500 or more workers, 51% said they planned to increase cost-sharing in 2026, including raising deductibles and maximum out-of-pocket costs for workers. That is up from 45% of large employers who said they would increase cost-sharing for 2025. Concern over the cost of GLP-1 weight-loss drugs like Novo Nordisk's Wegovy has surged, with 77% of employers naming them a top issue, the consultancy said. "More clients are saying ... 'I don't know how much longer we can sustain covering these medications'," said Alysha Fluno, a pharmacy innovation leader at Mercer, in an interview. While some employers have covered GLP-1s hoping for long-term health savings, rising prices are forcing a rethink: "Some employers facing big cost increases in 2026 may feel this coverage is out of reach," Fluno said. Greater competition in the weight-loss drug market in coming years will give pharmacy benefit managers more negotiating power with drugmakers and drive meaningful cost reductions, said Fluno. Novo's Wegovy and Eli Lilly's Zepbound are listed at $1086 and $1059, respectively, but many patients pay less through their health plans. Prescription drug costs jumped 8% last year, according to the survey. Mercer has forecast a 5.8% rise in overall health benefit costs for 2025. Employers are also eyeing alternatives to traditional pharmacy benefit managers (PBMs), according to Mercer. PBMs such as CVS Caremark, Cigna's Express Scripts and UnitedHealthcare's Optum Rx act as middlemen between drug companies and consumers. They negotiate volume discounts and fees with drug manufacturers on behalf of employers and health plans, create lists of medications that are covered by insurance, and reimburse pharmacies for prescriptions. Drugmakers say they take an undisclosed cut of the discounts they receive rather than sharing them with patients and payers. Regulatory scrutiny and calls for transparency are fueling interest in new models and emerging PBMs, with 34% of employers considering a switch. The survey found 40% of employers are considering alternative contracting models for their prescription medicine benefits, such as those that price drugs based on the wholesale price that retail pharmacies pay for them. Regulators have criticized the three largest pharmacy benefit managers for steering patients toward more expensive drugs and inflating prices to generate revenue gains, an accusation that the industry denies. California pension fund CalPERS, the second-largest public purchaser of health benefits in the U.S., announced on Tuesday that Caremark would replace UnitedHealth's Optum Rx as the fund's PBM in 2026. CalPERS said its five-year contract with Caremark requires the PBM to boost transparency and oversight.
Reuters
16-07-2025
- Business
- Reuters
As weight-loss spending soars, US employers plan to pare health benefits
NEW YORK, July 16 (Reuters) - More than half of large U.S. employers plan to scale back healthcare benefits next year as rising costs from weight-loss and specialty drugs squeeze budgets, according to a new survey released by consulting firm Mercer on Wednesday. Among employers with 500 or more workers, 51% said they planned to increase cost-sharing in 2026, including raising deductibles and maximum out-of-pocket costs for workers. That is up from 45% of large employers who said they would increase cost-sharing for 2025. Concern over the cost of GLP-1 weight-loss drugs like Novo Nordisk's ( opens new tab Wegovy has surged, with 77% of employers naming them a top issue, the consultancy said. "More clients are saying ... 'I don't know how much longer we can sustain covering these medications'," said Alysha Fluno, a pharmacy innovation leader at Mercer, in an interview. While some employers have covered GLP-1s hoping for long-term health savings, rising prices are forcing a rethink: "Some employers facing big cost increases in 2026 may feel this coverage is out of reach," Fluno said. Greater competition in the weight-loss drug market in coming years will give pharmacy benefit managers more negotiating power with drugmakers and drive meaningful cost reductions, said Fluno. Novo's Wegovy and Eli Lilly's (LLY.N), opens new tab Zepbound are listed at $1086 and $1059, respectively, but many patients pay less through their health plans. Prescription drug costs jumped 8% last year, according to the survey. Mercer has forecast a 5.8% rise in overall health benefit costs for 2025. Employers are also eyeing alternatives to traditional pharmacy benefit managers (PBMs), according to Mercer. PBMs such as CVS Caremark, Cigna's Express Scripts and UnitedHealthcare's Optum Rx act as middlemen between drug companies and consumers. They negotiate volume discounts and fees with drug manufacturers on behalf of employers and health plans, create lists of medications that are covered by insurance, and reimburse pharmacies for prescriptions. Drugmakers say they take an undisclosed cut of the discounts they receive rather than sharing them with patients and payers. Regulatory scrutiny and calls for transparency are fueling interest in new models and emerging PBMs, with 34% of employers considering a switch. The survey found 40% of employers are considering alternative contracting models for their prescription medicine benefits, such as those that price drugs based on the wholesale price that retail pharmacies pay for them. Regulators have criticized the three largest pharmacy benefit managers for steering patients toward more expensive drugs and inflating prices to generate revenue gains, an accusation that the industry denies. California pension fund CalPERS, the second-largest public purchaser of health benefits in the U.S., announced on Tuesday that Caremark would replace UnitedHealth's Optum Rx as the fund's PBM in 2026. CalPERS said its five-year contract with Caremark requires the PBM to boost transparency and oversight.
