Express Scripts Inc. and Anthem Inc. are accused in a proposed class action of breaching their ERISA fiduciary duties by entering into a 10-year, multibillion-dollar prescription-drug agreement that caused plan participants to overpay for benefits (Burnett v. Express Scripts, Inc., S.D.N.Y., No. 1:16-cv-04948, complaint filed 6/24/16).
The lawsuit is the latest development in the $15 billion battle between Anthem and Express Scripts. In March, Anthem sued Express Scripts for allegedly overcharging for prescription drugs in violation of the parties' agreement.
Two months later, two health plan participants sued both companies under the Employee Retirement Income Security Act challenging Express Scripts' alleged overbilling.
The latest lawsuit, filed June 24 in the U.S. District Court for the Southern District of New York, is brought by participants in three medical plans sponsored by Verizon Communications Inc., AmTrust Financial Services Inc., and LG&E and KU Energy LLC. The plans have more than 26,000 participants combined.
Billion-Dollar Agreement
In December 2009, Express Scripts paid approximately $4.67 billion to Anthem for the exclusive right to provide pharmacy benefit management services, the complaint says. Under this agreement, Express Scripts supports Anthem's business in over 24 states and services more than 15 million of its members.
According to the complaint, Anthem breached its ERISA duties by entering into an agreement with Express Scripts that was imprudent and not in the best interests of its members. In addition, Anthem allegedly failed to properly monitor and prevent Express Scripts from overcharging.
The complaint alleges that Anthem used Express Script's nearly $5 billion payment to fund stock buybacks in 2009 and 2010, which ultimately enriched Anthem's stockholders and management, rather than passing this money through to participants.
Read more >>
 |
| [Click to Enlarge] |
Two months later, two health plan participants sued both companies under the Employee Retirement Income Security Act challenging Express Scripts' alleged overbilling.
The latest lawsuit, filed June 24 in the U.S. District Court for the Southern District of New York, is brought by participants in three medical plans sponsored by Verizon Communications Inc., AmTrust Financial Services Inc., and LG&E and KU Energy LLC. The plans have more than 26,000 participants combined.
Billion-Dollar Agreement
In December 2009, Express Scripts paid approximately $4.67 billion to Anthem for the exclusive right to provide pharmacy benefit management services, the complaint says. Under this agreement, Express Scripts supports Anthem's business in over 24 states and services more than 15 million of its members.
According to the complaint, Anthem breached its ERISA duties by entering into an agreement with Express Scripts that was imprudent and not in the best interests of its members. In addition, Anthem allegedly failed to properly monitor and prevent Express Scripts from overcharging.
The complaint alleges that Anthem used Express Script's nearly $5 billion payment to fund stock buybacks in 2009 and 2010, which ultimately enriched Anthem's stockholders and management, rather than passing this money through to participants.
Read more >>