In the latest round of actions taken against pharmaceutical companies and pharmacies surrounding drug pricing and distribution models, the country’s largest Pharmacy Benefits Manager (PBM), Express Scripts, has filed suit against drug maker Horizon Pharma Plc, alleging that Horizon Pharma breached a pharmaceutical manufacturer rebate agreement it had executed with the PBM. The suit, which was filed under seal in Delaware State Court, seeks over $140 million in damages.
This suit comes after Express Scripts announced the removal of Linden Care pharmacy from its network, allegedly on the basis that the pharmacy mainly dispensed Horizon Pharma drugs and was allegedly acting as a “mail-order” pharmacy while participating in the retail pharmacy network. Express Scripts has essentially taken the position that Linden Care Pharmacy was a “captive” pharmacy to Horizon Pharma, much like has been alleged with respect to Philidor, a mail-order pharmacy whose relationship with drug maker Valeant Pharmaceuticals International Inc. has recently been questioned and with whom Express Scripts has also recently cut ties.
Express Scripts has made it clear that it will continue to review drug makers’ practices, as well as other similar “captive” pharmacies, which derive most of their prescription business from one drug maker. Pharmaceutical companies and pharmacies alike must be aware of and prepared for potential action by Express Scripts, as well as other PBMs. This latest action has demonstrated that not only will PBMs take direct action against network pharmacies’ contractual participation, but they will also target the drug makers directly through lawsuits.
Frier Levitt has experience in representing pharmaceutical companies and pharmacies in all matters relating to prescription drug pricing, relationship with payors, billing issues, and network contracting. Contact us today if your firm needs assistance in navigating the complex and ever changing world of prescription drug pricing or preparing your company in the event a PBM seeks to take action against you.
