Jun 20, 2018 - Health

CareZone sues Express Scripts over pharmacy contract

CareZone alleges Express Scripts is stifling other mail-order pharmacies. Photo: Tom Kelley/Getty Images

CareZone, an online service that delivers prescriptions to people's homes, is suing Express Scripts for allegedly engaging in anticompetitive behavior by locking out mail-order firms.

The bottom line: This dispute shines another light on how pharmacy benefit managers like Express Scripts profit from the drug supply chain — in this case, how it is more beneficial for PBMs to prefer their own mail-order pharmacies over others. Express Scripts denies CareZone's allegations.

The details: Express Scripts just threatened to end its contract with CareZone, CNBC reported this week. And now CareZone is retaliating by arguing Express Scripts took that action "to steer as many patients as it can to its own mail-order pharmacy, in order to thwart competition from innovative market entrants, and thereby increase profits."

  • PBMs determine which pharmacies are in-network for health insurance plans. Express Scripts specifically owns pharmacies that mail drugs to people at home.
  • Owning mail-order pharmacies and controlling contracts with insurance plans gives PBMs an incentive to direct patients to their own mail-order pharmacies even if cheaper options exist — thus, keeping all revenue.
  • The lawsuit alleges Express Scripts "allows pharmacies to sell prescription drugs to consumers through the 'retail, storefront' channel only, and expressly prohibits pharmacies from making sales to consumers through 'mail order.'"

Yes, but: CareZone's "innovative" model also is a complex business arrangement. The pharmacy, CZ Services, is separate from the mail-order company, CareZone, but they work together. Express Scripts' contract termination comes against CZ Services even though CareZone technically mails the drugs.

  • Express Scripts created a website that maintains CareZone broke the law with how it dispenses drugs.

Go deeper

Orion Rummler
16 mins ago - Health

At least 48 local public health leaders have quit or been fired during pandemic

Former California public health director Dr. Sonia Angell on Feb. 27 in Sacramento, California. Photo: Justin Sullivan/Getty Images

At least 48 local and state-level public health leaders have retired, resigned or been fired across 23 states since April, according to a review by the AP and Kaiser Health News.

Driving the news: California public health director Dr. Sonia Angell resigned on Sunday without explanation, a few days after the state fixed a delay in reporting coronavirus test results that had affected reopenings for schools and businesses, AP reports.

Go deeper (1 min. read)Arrow
Marisa Fernandez
39 mins ago - Politics & Policy

House will not hold votes until Sept. 14 unless stimulus deal is reached

Photo: Mandel Ngan/AFP via Getty Images

House Majority Leader Steny Hoyer (D-Md.) announced Monday that the House will not hold any floor votes until Sept. 14, though members will remain on 24-hour notice to return to Washington in case a deal on coronavirus stimulus is reached.

Why it matters: Democrats and the Trump administration remain deadlocked and have not met since negotiations broke down without a deal on Friday.

Go deeper (1 min. read)Arrow
Axios
Updated 58 mins ago - Politics & Policy

Coronavirus dashboard

Illustration: Annelise Capossela/Axios

  1. Global: Total confirmed cases as of 3 p.m. ET: 19,936,547 — Total deaths: 732,467 — Total recoveries — 12,144,510 — Map.
  2. U.S.: Total confirmed cases as of 3 p.m. ET: 5,063,770 — Total deaths: 163,156 — Total recoveries: 1,656,864 — Total tests: 61,792,571 — Map.
  3. Business: Richer Americans are more comfortable eating out.
  4. Public health: How America can do smarter testing.
  5. Sports: The cost of kids losing gym class — College football is on the brink.
  6. World: Europe's CDC recommends new restrictions amid "true resurgence in cases."
Go deeper (<1 min. read)Arrow