Court dismisses Pharmacy First's antitrust suit against Express Scripts

By Charmaine Little | Feb 14, 2019

ST. LOUIS – The U.S. District Court in the Eastern District of Missouri recently granted a motion by Express Scripts to dismiss a lawsuit filed by Wholesale Alliance, doing business as Pharmacy First, claiming tortious interference and breach of the covenant of good faith and fair dealing.

In a Feb. 4 ruling, U.S. District Judge Audrey G. Fleissig dismissed the suit in which Pharmacy First also alleged Express Scripts violated antitrust laws under the Sherman Act. 

As a a pharmacy services administrative organization (PSAO), Pharmacy First offers services to pharmacies and pharmacy benefit managers, such as Express Scripts, court filings said. Pharmacies often partner with Express Scripts because of its access to 83 million insured patients. Some pharmacies outsource negotiations and administrative responsibilities to PSAOs (i.e. Pharmacy First, who manages roughly 2,300 independent pharmacies nationwide). 

Pharmacy First and Express signed a PSAO agreement in which Express Scripts allowed Pharmacy First to work for its affiliated pharmacies for negotiations, court filings said. In its lawsuit, Pharmacy First claimed Express Scripts ended the relationship without cause, with Pharmacy First alleging it was because Express Scripts had relationships with other PSAOs.

In its motion to dismiss the suit, Express Scripts argued that Pharmacy First didn’t properly state a claim under Section 1 of the Sherman Act in its first two counts concerning an exclusive dealing agreement and a tying agreement, court filings said. 

Express Scripts said that if the two counts are tossed, the court should not exercise supplemental jurisdiction for counts three and four, which Express said should be dismissed for failure to state a claim, court filings said. Count III is a claim for tort interference, alleging Express Scripts interfered with Pharmacy First’s contracts with affiliated pharmacies. Count IV claims Express Scripts conducted a breach of the covenant of good faith and fair dealing implied by law in a PSAO services agreement. 

“Pharmacy First fails to plausibly plead action among horizontal competitors," the ruling said in dismissing the first count. "The complaint contains no facts plausibly demonstrating that the four PSAOs conspired or colluded amongst themselves to enter into an agreement with Express Scripts requiring Express Scripts to refuse to deal with Pharmacy First or other PSAOs.”

As for the second count, the tying claim, the court dismissed the claim saying Pharmacy First failed to plead properly under the Sherman Act,

The court did not exercise supplemental jurisdiction on the remaining counts.

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