Court rules in Express Scripts’ favor against pharmacies’ poaching allegations
The pharmacies alleged that Express Scripts was unfairly switching customers to its mail-order program without permission.
An Eighth Circuit Court gave Express Scripts and its mail-order pharmacy program a win this week when it upheld a district court ruling dismissing allegations that the pharmacy benefits manager was taking advantage of its role as a pharmacy benefits manager to switch consumers to its mail-order pharmacy program without the consent of either the pharmacy or consumer.
Five independent pharmacies filed a lawsuit last year arguing that Express Scripts (ESI) was in breach of contract as well as good-faith and fair-dealing covenants by requiring pharmacies to provide information about customers. The pharmacy benefits manager would then use to switch customers to switch to Express Script’s mail-in pharmacy program without their or their pharmacy’s authorization, the pharmacies alleged.
Related: CVS sued over mandatory mail-order program
According to the court filing, “The Pharmacies maintain that ESI is using their confidential customer information without authorization to switch their customers to ESI’s own mail-order service when ESI should only use the information to confirm customers’ coverage and to reimburse the Pharmacies.”
In addition, the pharmacies alleged that Express Scripts engaged in unfair competition, and that “ESI shared the Pharmacies’ trade secrets with its affiliates in order to steal the Pharmacies’ customers.”
A major point of contention in the allegations and subsequent rulings was who owns consumers’ health care information and what are the limits on sharing it? The pharmacies argued that Express Scripts was only entitled to information obtained after claims were processed, and that it was collecting unnecessary information in its own self-interests.
Unfortunately for the pharmacies, the contracts they had entered with Express Scripts did not support their arguments. In reviewing the provider manual agreements between the pharmacies and Express Scripts, the district court wrote that “ESI obtains the information from [the Pharmacies] to administer and process pharmacy claims and that information, per the Provider Manual, is under ESI’s control. Moreover, the Provider Manual includes no language precluding ESI from using the customer information independent of ESI’s relationship with [the Pharmacies].”
Overall, the Eight-Circuit Court affirmed the lower court’s ruling that the information required by Express Scripts was not protected in any way, and that the agreements the pharmacies had entered into with Express Scripts allowed it to purse mail-order prescription arrangments with consumers without breaching either their contract or good-faith agreements.
Read more: