Express Scripts ESRX, +0.41% the largest USA pharmacy-benefit manager, said it had terminated Linden Care pharmacy from its network after it “found that it predominantly dispensed Horizon prescription drugs” and failed to fulfill Express’s pharmacy network agreement. The pharmacy benefit manager indicated that it is also evaluating several other pharmacies that it said appeared to dispense mostly Horizon medications.
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Express Scripts, along with other pharmacy benefit managers and health insurers, has been evaluating its network of drug dispensaries after recent allegations of questionable practices at Valeant Pharmaceuticals global Inc’s partner pharmacy, Philidor Rx Services. Indeed, after we notified Express Scripts of its breaches, Express Scripts made no effort to cure the breaches, let alone respond to our notice, within the contractual deadline to terminate the contract.
Last month, Express Scripts cut ties with specialty pharmacy Philidor as well, after reports that Valeant and Philidor collaborated to vastly inflate drug prices and create a network of “phantom” pharmacies.
Additionally, Express Scripts has filed a lawsuit against Horizon Pharma claiming that Horizon Pharma owes it approximately $140 million in rebates tied to a prior agreement.
Less than five percent of our net sales are from prescriptions that are filled by Linden Care and processed by Express Scripts.
Mr. Walbert said it is patients who suffer because of Express Scripts “profiteering”. At best Express Scripts is being reckless in its allegations and at worse it is intentionally attempting to mislead investors.
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Horizon said it doesn’t have an ownership stake or possess an option to purchase any pharmacy, and all pharmacies that distribute Horizon branded medicines are fully independent. Further, Horizon says that Express Scripts’ lawsuit isn’t related to this matter. If those other payers also decide to shut off Horizon Pharma’s specialty pharmacies, then Horizon Pharma could be forced to rely on traditional pharmacies for fulfillment and that could lead to more prescriptions for its drugs being shifted to non-Horizon Pharma alternatives. The area that we feel has been the company’s primary weakness has been its disappointing return on equity. Horizon’s global headquarters are in Dublin, Ireland.
