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Express Scripts Wins Dismissal of Medco Purchase Claims

Aug. 28 (Bloomberg) -- Express Scripts Inc. persuaded a judge to dismiss most of the legal claims filed by groups of retail drug stores challenging its $29.1 billion acquisition of Medco Health Solutions Inc.

The National Association of Chain Drug Stores, the National Community Pharmacists Association and independent pharmacies sued Express Scripts and Medco in March, claiming the pharmacy-benefit managers’ merger would reduce competition and make fewer services available to retail customers.

U.S. District Judge Cathy Bissoon in Pittsburgh yesterday threw out the retailers’ claims made as buyers of national, full-service benefit-management services, saying any injuries they’d suffer from a loss of competition would be compensable with cash while they’d sought only injunctive relief.

Bissoon provisionally dismissed other claims -- including those the retailers said arose as potential competitors in the prescription benefits management business -- and gave the plaintiffs until Sept. 10 to re-plead them.

“Plaintiffs provide no indication that they are competitors in this market other than that unspecified members of the ‘Associations’ tried and failed to enter the market in the recent past,” the judge said.

Still, Bissoon added, allowing the petitioners to amend the claim if possible wouldn’t be futile and she gave them permission to do so.

Choke Competition

Finally, the judge declined to toss retailer claims the Express Scripts/Medco combination could choke off competition in the dispensation of medicine requiring special handling, also known as clinical specialty drugs.

“NACDS and NCPA appreciate that the judge has maintained several claims in this lawsuit,” the groups said today in a statement. “We are reviewing the decision to determine our next steps with regards to the case.”

Express Scripts completed the acquisition on April 2 after receiving Federal Trade Commission approval. On April 25, Bissoon denied the retailers’ request she suspend the merger until ruling on their claims.

Brian Henry, a spokesman for St. Louis-based Express Scripts, declined to comment on the court’s decision.

The case is National Association of Drug Stores v. Express Scripts Inc., 12-cv-395, U.S. District Court, Western District of Pennsylvania (Pittsburgh).

To contact the reporters on this story: Andrew Harris in Chicago at aharris16@bloomberg.net; Tom Schoenberg in Washington at tschoenberg@bloomberg.net

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net

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