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March 21, 2016 at 09:08 AM
(Bloomberg) — Health insurer Anthem Inc. (NYSE:ANTM) is suing Express Scripts Holding Co. (Nasdaq:ESRX), seeking to recover what it called excess payments made for drugs from the pharmacy benefits manager (PBM), deepening a dispute between the firms.
Anthem said it’s also seeking the right to end its relationship with Express Scripts in the suit, which it filed in the U.S. District Court for the Southern District of New York, although it hasn’t made any decision whether to terminate the contract. Express Scripts said the lawsuit is “without merit.”
See also: Anthem not entitled to $3 billion, Express Scripts says of talks
Anthem, the second-largest U.S. health insurer, has said it should be getting $3 billion a year more in prescription-drug savings from Express Scripts, while Express Scripts has disputed that claim. Their clash has been shining a light on the obscure world of managing drug benefits, a unique business where third-party middleman such as Express Scripts, CVS Health Corp. (NYSE:CVS) and Prime Therapeutics are hired by employers or insurers to manage patients’ prescriptions.
“Anthem has worked hard for more than a year to try to get Express Scripts to engage in such good-faith negotiations, but Express Scripts has refused to do so,” the insurer said in its statement. Anthem said it’s also suing over operational issues.
Anthem has relied on Express Scripts to handle drug benefits for its clients, after Express Scripts bought its own PBM in 2009. The 10-year deal struck at the time gives Anthem the right to periodically review what it’s paying for drugs and negotiate new terms.
Seeking $15 billion
In January, Anthem said Express Scripts wasn’t passing on enough savings. Now it took a next step by suing. In an e-mail Monday, Anthem said it’s seeking about $15 billion for past overstatements and future impact through the end of the contract in 2019. The insurer said the suit won’t affect how customers receive their prescriptions.
Express Scripts shares fell 1.9 percent to $68.13 at 11:28 a.m. in New York, reversing gains from earlier in the day. Anthem lost 1.7 percent to $140.28.
