Express Scripts motion to dismiss monopoly case granted

By Angela Underwood | Mar 21, 2018

ST LOUIS – A U.S. District Court for the Eastern District of Missouri judge has dismissed a case against a pharmacy over allegations of breach of contract and violation of the Sherman Act.

In Park Irmat Drug Corp. v. Express Scripts Holding Co. and Express Scripts Inc., Judge Ronnie White dismissed an eight-count complaint against the defendant for the plaintiff’s failure to state a claim in a Feb. 21 opinion.

The eight counts included illegal group boycott, monopoly, tying, breach of contract, promissory estoppel and three counts of Any Willing Provider Laws.

The case background deals with Express Script’s, the nation’s largest pharmacy benefits manager (PBM), dealings with Irmat, a New York pharmacy, that began in 2014 when the two parties entered into a pharmacy provider agreement. 

The opinion states a year later, Express Scripts required Irmat to complete a re-crediting application, which asked several questions about the privately owned drugstore and later approved the application.

In 2016, Express Scripts sent Irmat a cease-and-desist letter informing it that among other allegations, “Irmat misrepresented the nature of its pharmacy operations,” according to the opinion. That is when Irmat filed an eight-count complaint against Express Scripts stating “Express Scripts' conduct violates the Sherman Act, breaches their contract, and violates three states' Any Willing Provider laws,” according to the opinion.

However, Express Scripts saw it differently, countering Irmat failed to state a claim or breach of contract and sought a motion to dismiss. 

Beginning the case discussion, White cites McShane Constr. Co. v. Gotham Ins. Co. 2017 to point out that “to survive a motion to dismiss, ‘a complaint must contain sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face."'

But Irmat has cause according to the 33-page opinion, alleging anti-competitive action on behalf of Express Scripts and co-conspirator CVS Health Corp.

“Irmat alleges that, due to the 'market heft' of Express Scripts and its co-conspirators, a mail-order pharmacy without a PBM ownership must be a member of the PBM networks to remain viable,” White wrote. “Because Irmat is compliant with all relevant regulations and has an expertise in dermatological pharmaceuticals, the only reason for Express Scripts to terminate its agreement with Irmat is to eliminate Irmat as a competitor.”

After citing dozens of precedent cases, White concludes that Irmat’s argument is without any real merit.

“In considering Irmat's eight-count complaint raising antitrust, contract, and Any Willing Provider claims, the court has accepted as true all factual allegations; however, the court finds that those allegations fail to state a claim,” White wrote.

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