NEW YORK, May 5, 2016 /PRNewswire/ -- Bernstein Litowitz Berger & Grossmann LLP ("BLB&G") announces that on May 4, 2016, it filed a securities class action lawsuit on behalf of its client Melbourne Municipal Firefighters' Pension Trust Fund ("Melbourne") against Express Scripts Holding Company ("Express Scripts" or the "Company") (NASDAQ: ESRX), and certain of its senior executives (collectively "Defendants"). The action, which is captioned Melbourne Municipal Firefighters' Pension Trust Fund v. Express Scripts Holding Company, et al., No. 1:16-cv-03338 (S.D.N.Y.), asserts claims under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 (the "Exchange Act"), 15 U.S.C. §§ 78j(b) and 78t(a), and SEC Rule 10b-5 promulgated thereunder, 17 C.F.R. § 240.10b-5, on behalf of investors who purchased or otherwise acquired Express Scripts common stock during the period from February 24, 2015 to March 21, 2016, inclusive (the "Class Period").
The Complaint alleges that during the Class Period, Defendants violated provisions of the Exchange Act by issuing false and misleading press releases, financial statements, filings with the U.S. Securities and Exchange Commission ("SEC"), and statements during investor conference calls. Express Scripts is the largest independent pharmacy benefit manager ("PBM") in the country. As a PBM, Express Scripts administers the prescription drug benefit component of its customers' health insurance plans. Express Scripts also negotiates drug prices with pharmacies and establishes a network of pharmacies through which patients can fill their prescriptions.
Express Scripts' most important client is Anthem, Inc. ("Anthem"), one of the largest health benefits companies in the United States, which represents approximately 14% of Express Scripts' annual revenues. Pursuant to the Company's contract with Anthem, Anthem may periodically conduct a market analysis to ensure that Anthem is receiving "competitive benchmark pricing" on drugs purchased through plans administered by Express Scripts. If Anthem determines that the pricing terms under the agreement with the Company are no longer market competitive, then Anthem may propose new pricing terms to ensure that Anthem is receiving competitive benchmark pricing, and Express Scripts is obligated to negotiate in good faith over the proposed new pricing terms.
Throughout the Class Period, Express Scripts repeatedly assured investors that its relationship with Anthem remained strong and that it was providing Anthem, and all of its customers, with high quality service. Express Scripts also touted that it was performing at a high level financially and operationally. In addition, the Company addressed the ongoing drug pricing negotiations with Anthem, stating that Express Scripts was committed to reaching a mutually beneficial agreement, and continuing its successful working relationship with its most important client. As a result of these misrepresentations, Express Scripts stock traded at artificially inflated prices during the Class Period.
The truth began to be revealed on January 12, 2016, when Anthem publicly threatened to terminate its relationship with Express Scripts unless the Company would renegotiate its agreement with Anthem to deliver more than $3 billion in annual savings to Anthem. Then, on March 21, 2016, Anthem sued Express Scripts alleging that the Company breached its contract with Anthem by failing to negotiate drug pricing terms in good faith. The lawsuit revealed a conflict between Express Scripts and Anthem dating back to at least February 2015, including allegations that Express Scripts was experiencing severe operational problems that interfered with its ability to adequately serve Anthem and exposed Anthem to increased regulatory scrutiny. More importantly, investors learned that Anthem would almost certainly either renegotiate its contract to pay billions of dollars less to Express Scripts, or worse, seek to engage a competing PBM resulting in the complete loss of Anthem's business. These disclosures caused a material decline in the price of Express Scripts stock.
If you wish to serve as lead plaintiff for the Class, you must file a motion with the Court no later than July 5, 2016, which is the first business day on which the District Court for the Southern District of New York is open that is 60 days after the publication date of May 5, 2016. Any member of the proposed class may move the Court to serve as lead plaintiff through counsel of their choice, or may choose to do nothing and remain a member of the proposed class.
Melbourne is represented by BLB&G, a firm of over 100 attorneys with offices in New York, California, Louisiana, and Illinois. If you wish to discuss this Action or have any questions concerning this notice or your rights or interests, please contact Avi Josefson of BLB&G at email@example.com.
Since its founding in 1983, BLB&G has built an international reputation for excellence and integrity. Specializing in securities fraud, corporate governance, shareholders' rights, employment discrimination, and civil rights litigation, among other practice areas, BLB&G prosecutes class and private actions on behalf of institutional and individual clients worldwide. Unique among its peers, BLB&G has obtained several of the largest and most significant securities recoveries in history, recovering billions of dollars on behalf of defrauded investors. More information about BLB&G can be found online at www.blbglaw.com.
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