Case Page

 

Case Status:    ONGOING    
On or around 08/01/2017 (Ongoing date of last review)

Filing Date: May 04, 2016

According to the law firm press release, Express Scripts is the largest independent pharmacy benefit manager ("PBM") in the country. As a PBM, Express Scripts administers the prescription drug benefit component of its customers' health insurance plans. Express Scripts also negotiates drug prices with pharmacies and establishes a network of pharmacies through which patients can fill their prescriptions.

Express Scripts' most important client is Anthem, Inc. ("Anthem"), one of the largest health benefits companies in the United States, which represents approximately 14% of Express Scripts' annual revenues. Pursuant to the Company's contract with Anthem, Anthem may periodically conduct a market analysis to ensure that Anthem is receiving "competitive benchmark pricing" on drugs purchased through plans administered by Express Scripts. If Anthem determines that the pricing terms under the agreement with the Company are no longer market competitive, then Anthem may propose new pricing terms to ensure that Anthem is receiving competitive benchmark pricing, and Express Scripts is obligated to negotiate in good faith over the proposed new pricing terms.

Throughout the Class Period, Express Scripts repeatedly assured investors that its relationship with Anthem remained strong and that it was providing Anthem, and all of its customers, with high quality service. Express Scripts also touted that it was performing at a high level financially and operationally. In addition, the Company addressed the ongoing drug pricing negotiations with Anthem, stating that Express Scripts was committed to reaching a mutually beneficial agreement, and continuing its successful working relationship with its most important client. As a result of these misrepresentations, Express Scripts stock traded at artificially inflated prices during the Class Period.

The truth began to be revealed on January 12, 2016, when Anthem publicly threatened to terminate its relationship with Express Scripts unless the Company would renegotiate its agreement with Anthem to deliver more than $3 billion in annual savings to Anthem. Then, on March 21, 2016, Anthem sued Express Scripts alleging that the Company breached its contract with Anthem by failing to negotiate drug pricing terms in good faith. The lawsuit revealed a conflict between Express Scripts and Anthem dating back to at least February 2015, including allegations that Express Scripts was experiencing severe operational problems that interfered with its ability to adequately serve Anthem and exposed Anthem to increased regulatory scrutiny. More importantly, investors learned that Anthem would almost certainly either renegotiate its contract to pay billions of dollars less to Express Scripts, or worse, seek to engage a competing PBM resulting in the complete loss of Anthem's business. These disclosures caused a material decline in the price of Express Scripts stock.

On July 27, 2016, the Court issued an Order consolidating related actions, appointing Lead Plaintiff, and approving Lead Counsel. Lead Plaintiff filed an amended complaint on October 14.

On August 1, 2017, the Court issued an Order granting Defendants' motion to dismiss. Plaintiffs were given leave to amend their complaint.

COMPANY INFORMATION:

Sector: Healthcare
Industry: Healthcare Facilities
Headquarters: United States

SECURITIES INFORMATION:

Ticker Symbol: ESRX
Company Market: NASDAQ
Market Status: Public (Listed)

About the Company & Securities Data


"Company" information provides the industry and sector classification and headquarters state for the primary company-defendant in the litigation. In general, "Securities" information provides the ticker symbol, market, and market status for the underlying securities at issue in the litigation.

In most cases, the primary company-defendant actually issued the securities that are the subject of the litigation, and the securities information and company information relate to the same entity. In a small subset of cases, however, the primary company-defendant is not the issuer (for example, cases against third party brokers/dealers), and the securities information and company information do not relate to the same entity.
COURT: S.D. New York
DOCKET #: 16-CV-03338
JUDGE: Hon. Kimba M. Wood
DATE FILED: 05/04/2016
CLASS PERIOD START: 02/24/2015
CLASS PERIOD END: 03/21/2016
PLAINTIFF FIRMS NAMED IN COMPLAINT:
  1. Bernstein Litowitz Berger & Grossmann LLP (New York, NY)
    1285 Avenue of the Americas, 33rd Floor, Bernstein Litowitz Berger & Grossmann LLP (New York, NY), NY 10019
    212.554.1400 212.554.1444 · blbg@blbglaw.com
No Document Title Filing Date
COURT: S.D. New York
DOCKET #: 16-CV-03338
JUDGE: Hon. Kimba M. Wood
DATE FILED: 10/14/2016
CLASS PERIOD START: 02/24/2015
CLASS PERIOD END: 03/21/2016
PLAINTIFF FIRMS NAMED IN COMPLAINT:
  1. Bernstein Litowitz Berger & Grossmann LLP (New York, NY)
    1285 Avenue of the Americas, 33rd Floor, Bernstein Litowitz Berger & Grossmann LLP (New York, NY), NY 10019
    212.554.1400 212.554.1444 · blbg@blbglaw.com
No Document Title Filing Date