A group of independent pharmacies must arbitrate their proposed class claims that UnitedHealth-owned OptumRx gatekeeps its network of Medicare prescription patients by imposing unfair fees, a Washington federal judge said Tuesday, concluding the pharmacies haven't shown the arbitration clauses in question are unenforceable.

U.S. District Judge Robert S. Lasnik granted UnitedHealth Group Inc. and OptumRx Inc.'s bid to force Iowa-based Osterhaus Pharmacy Inc. and the other plaintiff pharmacies to individually arbitrate their antitrust claims, pointing to contractual provisions in the underlying contract that delegate any disputes about enforceability to an arbitrator.

While the pharmacies argued they had no choice but to agree to the terms because of OptumRx's market power, the judge concluded they "failed to show that the delegation clauses were unconscionable."

The lawsuit, filed by Osterhaus in December 2023, alleges that OptumRx blocks independent pharmacies from serving its network of Medicare patients unless the pharmacies pay extra fees or penalties. OptumRx is a pharmacy benefit manager, which operates as a middleman between Medicare plan sponsors, pharmacy service providers and drug manufacturers, the pharmacies say.

Washington-based Cammack's Pharmacies Inc., Habor Drug Co. Inc. and Valu Drugs Inc. and Oregon-based Medford Pharmacy Group LLC joined Osterhaus as plaintiffs in the latest version of the suit. The pharmacies assert claims for violation of the Sherman Act and the Medicare Statute and breach of contract, seeking to represent pharmacy service providers who've paid the OptumRx fees at issue since 2019.

Moving to compel arbitration last April, UnitedHealth and OptumRx contended that the fees targeted in the suit are governed by provider agreements that include binding arbitration clauses. The pharmacies joined pharmacy service administrative organizations, or PSAOs, which then contracted with OptumRx for administrative services related to Medicare prescription reimbursements, according to UnitedHealth.

Opposing the motion, the pharmacies countered that OptumRx used its dominant position in the industry to force them to agree to the arbitration clauses and provisions delegating any disputes over arbitrability to an arbitrator. They said OptumRx is one of three PBMs, alongside Express Scripts and CVS Caremark, that together control more than 80% of the prescriptions filled in the U.S.

But on Tuesday, Judge Lasnik said the pharmacies "fail to acknowledge that they enlisted the services of a PSAO to negotiate the pharmacy network agreements at issue."

"There is no evidence that the PSAOs are the weaker party or that they have no ability to negotiate the terms of the pharmacy network agreement, including the arbitration and delegation provisions," the judge said. "In fact, the only evidence in the record is that PSAOs do negotiate the terms of the agreements, including the arbitration provisions."

The pharmacies' arguments as to the validity of those contracts — including whether they were "economically coerced" into joining a PSAO and accepting OptumRx's terms — are for an arbitrator to decide, Judge Lasnik concluded.

The judge stayed the case, saying that once arbitration is completed, the parties may seek to confirm, vacate or set aside the eventual arbitral order.

Representatives of the parties did not immediately respond to a request for comment on Tuesday.

The pharmacies are represented by Beth E. Terrell, Amanda M. Steiner and Blythe H. Chandler of Terrell Marshall Law Group PLLC, Joshua Davis and Julie Pollock of Berger Montague PC and John Roberti, Melissa Maxman, Derek Jackson and Alisa Lu of Cohen & Gresser LLP.

UnitedHealth and OptumRx are represented by Geoffrey Sigler, Clare F. Steinberg and Brian W. Anderson of Gibson Dunn & Crutcher LLP and Heidi B. Bradley and Darin M. Sands of Bradley Bernstein Sands LLP.

The case is Osterhaus Pharmacy Inc. et al. v. UnitedHealth Group Inc. et al., case number2:23-cv-01944, in the U.S. District Court for the Western District of Washington.