Express Scripts in talks over new Anthem contract, forecasts growthReprints
(Reuters) — Pharmacy benefit manager Express Scripts Holding Co. said it was negotiating the repricing of its contract with Anthem Inc., one of its biggest customers, but it was too soon to know the financial terms of the deal.
Express Scripts made the disclosure during a conference call to discuss its growth outlook for 2016, which was above analysts' estimates.
The company, which manages drug benefits for health insurers like Anthem as well as large corporations, said Tuesday it expected 2016 adjusted earnings of $6.08-$6.28 per share, an increase of 10% to 14% from the company's reaffirmed forecast for 2015.
Analysts were expecting full-year adjusted earnings of $6.04 per share, according to Thomson Reuters I/B/E/S.
Express Scripts' 2016 forecast does not include any financial changes in the Anthem contract as they were not yet known, and it wasn't clear how soon a new agreement would be signed, Chief Executive George Paz said.
The current Anthem contract was structured in 2009 and has several years left on it, he said. It gives the companies the rights to make interim changes that Mr. Paz said would be "mutually beneficial."
He declined to discuss the talks in detail, saying he did not want to negotiate the contract during the conference call.
Express Scripts shares fell 37 cents, or 0.4%, to $86.77 in morning trading.
"We believe ESRX has turned the corner, and that the company should begin to deliver improving net new business trends going forward, as M&A-related churn subsides," JPMorgan Chase & Co. analysts said in an earnings preview note.
The company has become a vocal critic of exorbitant drug prices and recently chose to reimburse a cheaper alternative to the drug Daraprim, after Turing Pharmaceuticals raised its price to $750 from $13.50.