November 12, 2015
By Alex Keown, BioSpace.com Breaking News Staff
NEW YORK – Horizon Pharma lashed out at Express Scripts Inc.’s decision to terminate its relationship with specialty pharmacy company called Linden Care, which Horizon uses to distribute some of its medications to patients.
Express Scripts, the largest manager of drug benefit plans in the United States, announced its plans to terminate the relationship with Linden, which caused Horizon’s stock to plummet nearly 20 percent, from $22.38 to $17.99, on Wednesday. According to a report in The Street, Express Scripts accused Linden Care of being a “captive” pharmacy that only distributes medication for Horizon Pharma. Express Scripts also filed a lawsuit against Horizon, seeking $140 million in damages.
Timothy Walbert, chairman and chief executive officer of Dublin-based Horizon, said his company’s policy of ensuring patients get the medications prescribed is “Express Scripts’ profiteering and exposing what we believe is a lack of care for patients and respect for physicians.”
He said the idea that Linden is a “captive pharmacy” is a false statement. Walbert said Express Scripts is being reckless in its allegations and may be attempting to mislead investors.
In a statement Walbert said Express Scripts is a direct competitor to Linden, which creates a conflict of interest as Express Scripts stands as both overseer of Linden and a competitor.
“In fact, Express Scripts’ specialty pharmacy, Accredo Health Group, Inc., is the largest in the United States with more than 28 percent market share. Based on its Accredo ownership, it’s not surprising that Express Scripts would target small, competitive independent specialty pharmacies in order to force those pharmacies from its network, attempt to dominate the U.S. specialty pharmacy medicine distribution channel and further boost its own profits at the expense of patients,” Walbert said.
Walbert said Horizon has a relationship with Accredo to provide one of its orphan drugs to patients and that company accounts for higher revenue than any other specialty pharmacy. He said less than 5 percent of Horizon’s net sales is from prescriptions filled by Linden. However, Walbert said Horizon will reexamine its relationship with Accredo following that company’s $60 million fraud settlement with the U.S. Department of Justice.
The lawsuit filed by Express Scripts relates to a decision made in 2014 by Horizon to terminate a contract with Express Scripts after “Express Scripts failed to live up to its contractual obligations,” Walbert said in a statement. He said Express Scripts did not respond to Horizon’s concerns, and the benefits manager is now attempting to recover funds lost due to the termination of that contract.
This is not the first time Horizon has had issues with its specialty pharmacy relationships. In October a New York Times article zeroed in on Horizon’s $1,500 price tag of its pain reliever Duexis, which it described as a combination of the generic equivalents of Motrin and Pepcid. According to the Times’ article, Horizon encourages physicians to submit prescriptions for the high-priced medication to a mail-order pharmaceutical company associated with Horizon. Horizon told the Times if an insurance company refuses to pay for Duexis, the patient already has the drug and Horizon absorbs the cost. Additionally, the pharmaceutical company said patients receiving Duexis have co-pays of no more than $10. If the two generic equivalents were prescribed for pain, the Times claims the price would range between $20 and $40.
The specialty pharmacies have been used for a while, most often to dispense costly treatments for cancer and rare genetic disorders. Ronny Gal, a pharmaceutical analyst at Bernstein, told the Times the specialty pharmacies began as a way to administer costly drugs “has been co-opted as a sales/marketing tool to drive the growth of minor differentiation standard retail drugs.”
Horizon said any pharmacy that distributes its medication is independent of the parent company. It also said the specialty pharmacies do not have exclusive contracts with Horizon and may fill prescriptions from other drug manufacturers.
“Horizon does not own or have an ownership stake in any pharmacy and does not possess an option to purchase any pharmacy. In addition, the relationship with these pharmacies is non-exclusive where each of these pharmacies may also fulfill prescriptions for other drug manufacturers,” the company said in a statement.
