Horizon PharmaHZNP -18.77 % PLC on Wednesday fired back a response at Express ScriptsESRX -0.86 % Holding Co.’s business practices after the largest USA pharmacy-benefit manager said it was cutting off a pharmacy that sold medications made by the biopharmaceutical company.
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Horizon denied that Linden is a captive pharmacy for the drugmaker. Nevertheless, if Horizon Pharma fails to swap out script volume to other specialty pharmacies that remain on Express Scripts’ network, losing access to Express Scripts’ patients could be a big blow. Express Scripts is also investigating other pharmacies to see if they also appear to have deep ties to Horizon Pharma. “Express Scripts is not only a pharmacy benefit manager that has significant control over prescriptions that flow to specialty pharmacies, it also operates its own mail-order pharmacy and thus is a direct competitor of small, independent specialty pharmacies throughout the United States”.
The Dublin-based drugmaker’s announcement followed a decision by Express Scripts to remove Linden Care pharmacy from its network.
Less than five percent of our net sales are from prescriptions that are filled by Linden Care and processed by Express Scripts.
“This competitive role, in our view, creates a clear conflict of interest, as Express Scripts stands as both a pharmacy’s overseer and competitor”, he said.
We have removed the Linden Care pharmacy from our network.
Express Scripts says customers have many pharmacy choices for getting their medicines, and it takes action when pharmacies fall out of compliance with network agreements. At best Express Scripts is being reckless in its allegations and at worse it is intentionally attempting to mislead investors. Instead, the suit is tied to a previous contract that Horizon Pharma had terminated after determining that Express Scripts wasn’t fulfilling its obligations.
To top things off, it has filed suit in a DE court alleging breach of contract and seeks to recover ~$140M from Horizon for certain rebates owed to ESRX. Horizon added that it is still reviewing the charges in the lawsuit, which it said involves a prior rebate agreement between the two sides, but it believes the allegations are without merit.
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Koffler reiterated a Buy rating on shares of Horizon Pharma, with a price target of $34, which represents a potential upside of 88.9% from where the stock is now trading.
