Lawsuit against Express Scripts over Anthem ties dismissed
By Brendan Pierson
NEW YORK (Reuters) - A federal judge on Tuesday dismissed a lawsuit brought against Express Scripts Holding Co (NASDAQ: ESRX) by shareholders who accused the pharmacy benefits manager of inflating its share price by hiding its deteriorating relationship with its largest customer, Anthem Inc (NYSE: ANTM).
U.S. District Judge Edgardo Ramos in Manhattan, who dismissed an earlier version of the lawsuit last August, said shareholders failed to support their claim that Express Scripts knowingly misled them. Unlike last year, Ramos did not leave the shareholders permission to file a new version of their case.
A lawyer for the shareholders, who were led by the Teachers Insurance and Annuity Association of America, could not immediately be reached for comment. Express Scripts also could not be reached.
The plaintiffs accused the St. Louis-based company of hiding its souring relationship with Anthem from investors for more than a year, causing its share price to drop when Anthem sued Express Scripts for $15 billion in March 2016.
In that lawsuit, which is pending before Judge Ramos, Anthem claimed Express Scripts was overcharging it by $3 billion a year and sought to be let out of its 10-year contract.
In April 2017, Express Scripts said Anthem was unlikely to renew its contract when it expired in 2019, and that any new contract would likely be on less favorable terms.
In addition to Express Scripts, the shareholders also sued the company's current Chief Executive Tim Wentworth and his predecessor, Chairman George Paz.
(Reporting by Brendan Pierson in New York; additional reporting by Jonathan Stempel in New York; editing by Jonathan Oatis and Tom Brown)