Express Scripts says significance of subpoenas still unclearReprints
(Reuters) — Pharmacy benefit manager Express Scripts Holding Co. on Wednesday said it is too soon to know the significance of three government subpoenas it has received since February, which asked about the company's business dealings with U.S. and European drugmakers.
Express Scripts on Tuesday in a regulatory filing said it had received subpoenas from federal prosecutors in Rhode Island, from the Attorney General of New Jersey and from the U.S. Department of Labor, and would cooperate with all of them.
In a conference call with industry analysts on Wednesday to discuss its first-quarter earnings, Express Scripts officials did not provide any new details about the subpoenas and said it would take time to understand their significance.
“I tell you we have very strong compliance programs here at Express Scripts, so I don't know where all these things take us or what they are looking for,” Chief Executive George Paz said on the call. “But I feel good about what we do, so we will just have to see how these things play out.”
St. Louis-based Express Scripts, the country's largest PBM, administers drug benefits for employers and health plans and also runs large mail-order pharmacies. Its shares were down 6% in afternoon trading on the Nasdaq.
“We have no comment beyond what was disclosed yesterday in our regulatory filing,” company spokesman Brian Henry said, when asked by Reuters for more details about the subpoenas.
The regulatory filing said Express Scripts received a subpoena on Feb. 27 from the U.S. Department of Justice, District of Rhode Island. It requested information on the company's contractual arrangements with Pfizer Inc., Bayer AG, Biogen Idec Inc. and EMD Serono Inc., a unit of Germany's Merck KGaA, concerning multiple sclerosis drugs Betaseron, Rebif and Avonex.
A subpoena received on March 31 from the Attorney General of New Jersey sought information regarding arrangements made by Express Scripts and Medco — a leading PBM that Express Scripts bought in 2012 — with British drugmaker AstraZeneca P.L.C. concerning heartburn drug Nexium.
The third subpoena came April 8 from the U.S. Department of Labor, and asked for information regarding Express Scripts' and Medco's client relationships from 2009 until present, Express Scripts said in the filing.
Express Scripts late on Tuesday posted a lower-than-expected first-quarter profit and decreased its earnings forecast for full-year 2014, saying adjusted prescription volume would be less than it had anticipated.
Results were hurt by severe winter weather in the quarter as well as later-than-expected enrollment in public health insurance exchanges under the Affordable Care Act, the company said.