The original complaint charges Express Scripts and certain of its officers and directors with violations of the Securities Exchange Act of 1934. The complaint alleges that during the Class Period, defendants caused Express Scripts' shares to trade at artificially inflated levels through the issuance of false and misleading statements and other illegal practices, including its improper practice of changing patients' medications. Ultimately, Express Scripts disclosed a number of investigations into those improper practices, recorded additional litigation reserves of $15 million and the Company was sued by the New York Attorney General. The New York Attorney General lawsuit alleged that Express Scripts conducted an elaborate scheme that inflated by millions of dollars the costs of prescription drugs to New York state's largest employee health plan, the Empire Plan. The lawsuit alleged that Express Scripts: (i) '(e)nriched itself at the expense of the Empire Plan and its members by inflating the cost of generic drugs;' (ii) 'diverted to itself millions of dollars in manufacturer rebates that belonged to the Empire Plan;' (iii) '(e)ngaged in fraud and deception to induce physicians to switch a patient's prescription from one prescribed drug to another for which Express Scripts received money from the second drug's manufacturer;' (iv) '(s)old and licensed data belonging to the Empire Plan to drug manufacturers, data collection services and others without the permission of the Empire Plan and in violation of the State's contract;' and (v) '(i)nduced the State to enter into the contract by misrepresenting the discounts the Empire Plan was receiving for drugs purchased at retail pharmacies.'
NOTE: Express Scripts is one of the largest Pharmacy Benefit Management ('PBM') companies in North America providing PBM services to members through facilities in eight states and Canada. Express Scripts serves thousands of client groups, including managed care organizations, insurance carriers, third-party administrators, employers and union-sponsored benefits plans.
On October 15, 2004, the Court entered the Order consolidating all actions under 4:04CV1009 SNL. The consolidated action shall be entitled In re Express Scripts, Inc. Securities Litigation. On September 13, 2005, the plaintiffs filed a Consolidated Complaint. The defendants responded by filing a motion to dismiss the Consolidated Complaint on October 28, 2005. On June 28, 2010, the defendants' motion to dismiss was granted. The case is now dismissed.
On July 29, 2010, the plaintiffs filed a Notice of Appeal, and on August 30, 2010, the Court entered the Mandate from the U.S. Court of Appeals for the Eighth Circuit. The appeal was dismissed.