CareZone sues Express Scripts for defamation following contract fight

Lawsuit document
CareZone says defamatory statements by Express Scripts caused "irreparable damages." (Getty/eccolo74)

A mounting battle between Express Scripts and online pharmacy CareZone just got a little more heated.

Weeks after CareZone accused Express Scripts of anticompetitive practices, a new complaint (PDF) filed in the U.S. District Court for the Northern District of California claims Express Scripts posted false statements on its website that impacted CareZone’s profits.

Specifically, CareZone takes issue with a June 19 post on the Express Scripts site titled “Some Facts About CareZone” that announced the pharmacy benefits manager was removing CareZone from its network because two locations were violating state laws.

CareZone maintains it is licensed and in good standing in all 50 states and the District of Columbia, but the accusations would “needlessly draw the attention of state and federal regulators” and “dissuade vulnerable patients” from using pharmacies owned by CZ Services, a CareZone partner.

CareZone also claims it will suffer “irreparable damage” in the form of lost profits, adding that the company’s “growth trajectory and business have already been impaired and will likely continue to be impaired” as a result of the false statements.

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The company said Express Scripts used a similar approach during a 2016 contract dispute with PillPack, an online pharmacy recently acquired by Amazon. Express Scripts and PillPack ultimately resolved their differences, but that contract is set to expire this month.

An Express Scripts spokesperson said its post “speaks for itself.”

The legal spat comes as Express Scripts looks to close a $67 billion deal with Cigna, which is being closely reviewed by the Justice Department. Shareholders at both companies are scheduled to vote on the merger on Aug. 24.

CareZone is not the first to take issue with Express Scripts' business practices. The PBM is also facing a lawsuit from Pharmacy First, a national network of more than 2,300 independent pharmacies, which alleges the company engaged in “anticompetitive conduct” by terminating its agreement with the organization and entering into exclusive contracts with four pharmacy services administration organizations.