Express Scripts beats class-action suit over Anthem fallout

Legal and regulatory issues
A New York judge dismissed a second complaint against Express Scripts alleging executives misled investors about its Anthem contract. (iStock/BCFC)

A New York judge dismissed a class-action lawsuit against Express Scripts alleging the company misled investors about its eroding relationship with Anthem.

The decision (PDF) comes nearly a year after Judge Edgardo Ramos dismissed a previous version of the lawsuit. On Monday, he ruled that the amended complaint, filed by an Express Scripts investor, “failed to allege new facts” to support the argument the pharmacy benefit manager misled investors about its relationship with Anthem.

In last year’s opinion, Ramos wrote the class-action allegations from Teachers Insurance and Annuity Association (TIAA), a joint stock life insurance company, “amount to little more than a suggestion that defendants should have somehow guessed the outcome of the ongoing negotiations sooner or approached their negotiations with Anthem more pessimistically.”

Ramos referenced the same passage in this week’s dismissal, adding that the plaintiffs failed to provide any new evidence that executives knew that their public statements regarding the company’s relationship with Anthem were incorrect.

“The problem with plaintiff’s claim is the same: Plaintiff has failed to point to any evidence that defendants knew their public statements about renewal (whether embodied in SEC filings or statements made in investor calls) were incorrect,” Ramos wrote.

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In both complaints, TIAA pointed to SEC filings and statements made by executives on earnings calls that downplayed the contractual dispute the company had with Anthem beginning in 2015. But the court ruled those statements didn’t rise to the level of deceiving investors.

After a rash of lawsuits between the two companies over a 10-year contract, Anthem cut ties with Express Scripts in 2017, indicating it would not renew the contract that expires at the end of this year.

Anthem’s decision not to extend the contract ultimately factored into the PBM’s decision to accept a $67 billion offer from Cigna.