A federal judge in Wisconsin has allowed a wrongful death lawsuit to move forward against pharmacy benefit manager Optum Rx and Walgreens after a young man died following a change in prescription coverage that left him unable to afford his asthma medication.

Cole Schmidtknecht, a lifelong asthma patient, died in January 2024 after being unable to afford a refill of his Advair Diskus inhaler, which was previously covered by his health insurance with an out-of-pocket cost of less than $70. When he went to Walgreens to refill the prescription, he was informed that the medication was no longer covered and would now cost $539. According to the complaint, Schmidtknecht was not notified in advance of the change and left the pharmacy without the medication because he could not afford the cost.

Five days later, Cole suffered a severe asthma attack. He lost consciousness during transport to the hospital and never regained awareness. He died on January 21 after six days on life support.

Cole’s parents, Shanon and William Schmidtknecht, filed the lawsuit on behalf of themselves and their son’s estate. They allege that Optum Rx failed to provide proper notice of the coverage change, which they say contributed directly to Schmidtknecht’s death. The complaint also names Walgreens, where Schmidtknecht attempted to fill the prescription, although the recent ruling only addresses Optum Rx’s motion to dismiss.

Optum Rx, a subsidiary of UnitedHealth Group, served as the pharmacy benefit manager for Schmidtknecht’s health plan. PBMs operate as intermediaries between insurance companies, drug manufacturers, and pharmacies. They help determine which drugs are covered and at what cost. In this case, the plaintiffs claim that Optum Rx dropped Advair Diskus from its list of covered drugs due to financial arrangements with manufacturers of competing products, and not for medical reasons.

Wisconsin law requires PBMs to give patients at least 30 days’ advance written notice if a drug is removed from coverage or reassigned to a higher cost tier. The plaintiffs argue that Optum Rx’s failure to provide such notice violated state law and established the grounds for a negligence claim.

Optum Rx moved to dismiss the lawsuit, asserting that the claim was preempted by the federal Employee Retirement Income Security Act (ERISA), which governs employer-sponsored benefit plans. The company argued that the suit amounted to a challenge of a benefit decision and should be addressed under federal law.

U.S. District Judge Byron B. Conway rejected that argument, ruling that the claim, as presented, centers on a failure to notify the patient rather than on a decision to deny coverage. He found that the complaint did not require interpretation of the health plan’s terms and was therefore not preempted by federal law at this stage.

The court also declined to dismiss the plaintiffs’ negligence per se theory, which is based on alleged violations of Wisconsin’s PBM regulations. Judge Conway stated that while the merits of that argument may be evaluated later, it is not grounds for dismissal at this point in the case.