New Report Says Pharmacy Benefit Giant Obsessed with Secrecy, Involved in Pricing Schemes, Expanding Too Fast, Loaded with Debt and Overvalued
BENSALEM, Pa., Dec. 1, 2010 /PRNewswire-USNewswire/ -- According to a new research report, Express Scripts, the second-largest pharmacy benefit management firm in the country, is alienating clients by engaging in pricing schemes, handling personal data carelessly, expanding so fast the company may be overvalued, and is so loaded with debt its liquidity may be in danger. The report was issued by SEIU Healthcare Pennsylvania, which has 22,000 members including almost 1,000 members employed by Express Scripts, Inc. (ESI) [NASDAQ: ESRX].
Express Scripts, racked up profits of $1.7 billion last year while processing 449 million prescriptions -- 12 percent of all prescriptions filled in the United States. Nevertheless the company is demanding draconian concessions and threatening to close two of its facilities in suburban Philadelphia if the workers don't agree to the concessions by mid-December. The closures would put an estimated 1,000 workers out of jobs in this hard-hit community just before Christmas. As a result, the union is marshaling support from community and union allies, and urging the company's customers and investors to demand the company change its reckless practices.
According to the report, the company's rapid expansion – its profits have grown 400 percent in the last decade – has caused "significant problems."
"Over the past ten years, a number of health plans and state governments have audited and sued ESI, claiming that the company systematically overcharges its clients, and ESI has paid out millions in settlements," the report says. "Shareholders sued ESI and its directors, alleging that executive pay packages were inflated at their expense."
According to the Wall Street Journal's CEO Compensation Study for 2009, ESI CEO George Paz's $10.4 million in direct compensation ranked him 127th out of 458 CEOs in the firms analyzed.
Today's report says the company's recent proposal to close its largest order processing plant in Bensalem "throws new light on the company's increasingly reckless behavior. The closure could threaten ESI's ability to fulfill its commitments to current customers, to pay its creditors, and to meet the demands of new accounts." ESI's creditors include Citibank, Credit Suisse, and J.P. Morgan.
A full copy of the report is available at www.ESIWorkersFightBack.com
SOURCE SEIU Healthcare Pennsylvania