Express Scripts Caught Up in Pharmacy Feud


Increased litigation by independent pharmacies against one of the country’s leading pharmacy benefit managers spotlights the high stakes faced by independent pharmacies kicked out of a PBM network: It’s nearly impossible for the independents to compete for customers outside the network system.

Some specialty and compounding pharmacies that have been excluded are fighting back by suing PBMs, and most notably Express Scripts, claiming the network terminations breach their provider contracts. Express Scripts, now the second-largest PBM, trumped up minor violations as an excuse to end the pharmacies’ network agreements, they allege. And, as an extra added benefit, the terminations allowed Express Scripts to steer customers to its wholly owned subsidiary specialty pharmacy, Accredo, thereby keeping the specialty drug profits in-house as well, the pharmacy plaintiffs claim.

An Express Scripts spokesman who talked to me denied the allegations without commenting on any particular case. Brian Henry told me the company rarely ends network provider contracts and, when it does, it has good reasons for doing so. Accredo, he said, competes for specialty pharmaceutical business, just like everyone else. And if customers are switching to Accredo, it’s because the Express Scripts subsidiary provides exceptional service.

Lawyers for the pharmacies, however, told me they’ve found that the excluded pharmacies are almost always very profitable providers of high-cost specialty drugs to treat conditions such as HIV and hepatitis C. And the pharmacies all tell virtually the same story regarding the reasons Express Scripts dropped them from its network, the attorneys say.

Express Scripts prevailed in early cases, but a few recent court decisions have rejected its efforts to end newer lawsuits before trial. Attorneys for the pharmacies have taken this as a sign the pharmacies claims are gaining traction and ultimately will succeed.

Read my story about the cases and the parties’ positions here.

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