Express Scripts, once the largest pharmacy benefit manager (PBM) in the country (it was recently overtaken by CVS Health), has been defending itself against a number of lawsuits in recent years, many filed by specialty and compounding pharmacies, alleging that the PBM expelled them from its network on pretextual grounds, depriving them of access to the markets that kept them in business.

Until recently, few of these suits have met with success, as Express Scripts managed to fend off multiple attacks.  In nearly a dozen ongoing lawsuits, however, pharmacies have managed to outmaneuver Express Scripts in the early stages of litigation, and the giant PBM, along with others, appear to be losing some valuable ground.

Many of the lawsuits contain remarkably similar complaints.  Multiple pharmacies that Express Scripts kicked out of its network cite instances in which minor compliance issues have been blown up into material breaches (often without opportunity to remedy the problem) and disputes over what exactly constitutes the operation of a “mail-order” business as cause for contract termination.  Even the initiation of an audit or investigation by a state or federal agency has led to contract terminations.

The claims that have really gotten the courts’ attention of late, however, are multiple allegations that Express Scripts, along with other PBMs like CVS Health, Optum Rx, and Prime Therapeutics, have colluded to boycott compounding and specialty pharmacies in order to drive them out of the marketplace, capturing those lines of business for their wholly owned pharmacies (Express Scripts’ specialty pharmacy Accredo, for example). In a recent interview for Bloomberg BNA, a spokesman for Express Scripts argued that “Ninety-nine point five percent of in-network pharmacies” are in compliance with Express Script’s standards.  However, as part of that same interview, Fisher Broyles attorney Anthony Calamunci noted that the vast majority of pharmacies targeted for exclusion (those in the 0.5 percent terminated for noncompliance) had one thing in common:  they were all highly profitable and often did a large volume of business in high-profit-margin drugs.*  It is this type of seemingly targeted exclusion that has led pharmacies to make tortious interference and unfair competition claims in multiple actions against Express Scripts.

Express Scripts and companies like it have become the focal point for both public and private concerns over the skyrocketing prices of prescription drugs in the U.S. In addition to the many lawsuits now ongoing against it, state and federal inquiries into Express Scripts and other PBMs and their role in drug pricing are also moving forward.  As also noted in the Bloomberg BNA article, Calamunci sees a “dynamic shift” in the pharmaceutical industry over the course of the next few years as lawsuits, investigations, government regulatory activity, and market forces combine to change the playing field and, hopefully, eliminate the advantages that PBMs like Express Scripts have engineered to their own benefit, but to the detriment of many independent, specialty and compounding pharmacies, and consumers