Arkansas Attorney General Tim Griffin announced two new lawsuits Monday and Tuesday. One suit targets two pharmacy benefit managers, companies he says financially profited from the opioid crisis. The other was against the online retail site Temu for allegedly using malware on customers.
Pharmacy Benefit Managers
Pharmacy benefit managers work as the middle men between pharmacists and health insurance companies. They negotiate for rebates with pharmaceutical companies.
Arkansas' suit is specifically against the companies Optum and Express Scripts. Both rake in billions of dollars each year in profit. Griffin says both groups profited from the opioid crisis “pill by pill and dollar by dollar.”
The list of drugs an insurance company will cover are grouped on a “formulary.” These companies decide drug pricing using formulary tiers. The drugs with the highest tier have the lowest costs for the consumer, often with a higher cost for the insurance company. Consumers are often prevented from paying lower tiered drugs at reduced prices.
Griffin says these two companies colluded “with manufacturers to place opioid drugs on formularies with preferred status.”
He said the companies made less addictive painkillers harder to access and falsely represented their formulary system to “maximize profits.” He also says they dispensed billions of drugs during the opioid crisis in Arkansas which they were well aware of. The suit also says these companies did not adhere to state laws about drugs. They are both being sued for negligence and being a public nuisance.
Temu
Arkansas plans to be the first state to sue the online retailer Temu. Griffin says their app has malware that is targeting user data “far beyond normal consumer data.” He says the Chinese-owned company has access to users “entire device,” their location, and their fingerprint.
“You name it, they have access to it and they are taking it,” Griffin said Tuesday.
Griffin said he wasn't exactly sure what Temu does with the information they collect, but was hoping to learn more through the course of the lawsuit.
“Temu is not simply an online marketplace,” he said. “It is a data theft business that uses the online marketplace as a means to an end.”
Griffin says the code in the app is written to "survive" anti-malware software. He said he told his staff not to download the app, and that they are doing an assessment in his office to see who is using it.
Temu is a popular retail platform where customers can buy items at low prices. Their slogan is “shop like a billionaire” implying that customers can buy many items with little money. Temu has over 100 million downloads on Google Play. Temu's sibling app Pinduoduo was blocked from the Apple App Store in 2023, after malware was found in the app.
“Not everyone who represents themselves through our electronic devices are our friends,” Griffin said.
The suit was filed in Cleburne County, and alleges Temu violated the Arkansas Deceptive Trade Practices Act. The law says “it is unlawful and forbidden to advertise goods or services with no intention to sell them as advertised.”
The lawsuit also says the company's behavior constitutes unjust enrichment. Griffin says he is in contact with other attorneys general about possibly joining in the suit.
