FILE PHOTO: The office building of health insurer Anthem is seen in Los Angeles, California February 5, 2015. REUTERS/Gus Ruelas/File Photo
August 2, 2017
NEW YORK (Reuters) – A federal judge has dismissed a lawsuit in which Express Scripts Holding Co <ESRX.O> shareholders accused the pharmacy benefits manager of inflating its share price by hiding its deteriorating relationship with its largest customer, Anthem Inc <ANTM.N>.
In a decision made public on Tuesday, U.S. District Judge Edgardo Ramos in Manhattan said shareholders did not show that Express Scripts intended to defraud them, or made false or misleading statements to support their claims.
Shareholders led by the Teachers Insurance and Annuity Association of America accused St. Louis-based Express Scripts of downplaying its sometimes “extremely contentious” relationship with Anthem for more than a year.
They said the truth became known by March 2016, when Anthem sued Express Scripts for $15 billion, claiming it was being overcharged by $3 billion annually and seeking the right to end the companies’ 10-year contract.
Several individual Express Scripts officials were also sued, including current Chief Executive Tim Wentworth and his predecessor, Chairman George Paz.
Ramos dismissed the lawsuit without prejudice, meaning the plaintiffs can file an amended complaint. Their lawyer, Salvatore Graziano, declined to comment on Wednesday.
In April, Express Scripts said Anthem was unlikely to renew its contract, which expires in 2019. Last week, Express Scripts said any new contract would likely contain “significantly less favorable” terms.
Ramos also oversees Anthem’s $15 billion lawsuit, and in March dismissed two of Express Scripts’ six counterclaims.
The case is In re: Express Scripts Holding Co Securities Litigation, U.S. District Court, Southern District of New York, No. 16-03338.
(Reporting by Jonathan Stempel in New York; Editing by Matthew Lewis)