Express Scripts 2009 Annual Report Download - page 35

Express Scripts 2009 Annual Report
33
c
hanges and other uncertainties related to industry pricing benchmarks, which could have the effect o
f
r
educing prices and margins, or which could otherwise create turbulence within the industr
y
changes in industry pricing benchmarks such as average wholesa
l
e price (“AWP”) and average manufacturer
price (“AMP”), which could have the effect of reducing prices and margins
i
ncreased compliance risk relating to our contracts with the Department of Defense (“DoD”) TRICAR
E
M
anagement Activity and various state g
o
v
ernments and agencies
uncertainties and risks regarding the Medicare Part D prescription drug benefit, including the financial impac
t
to us to the extent we participate in the program on a ris
k
-
b
earing basis, uncertainties of client or member
losses
to
o
ther providers under Medicare Part D, implementation of regulations that adversely affect our
profitability or cash flow, and increased regulatory ris
k
the possible loss, or adverse modification of the terms, of relationships with pharmaceutical manufactur
e
r
s
o
r
dist
r
ibuto
r
s
,
or changes in pricing, discount or other practices of pharmaceutical manufacturers or
i
nterruption of the supply of any pharmaceutical products
i
n connection with our specialty pharmacy business, the possible loss, or adverse modifica
t
i
on of the terms o
f
our contracts with a limited number of biopharmaceutical companies from whom we acquire specialty
pharmaceuticals
the use and protection of the intellectual property, data, and tangible assets that we use in our business,
the
misuse o
f
our data by others, or infringement or alleged infringement by us of intellectual property claimed by
othe
r
s
general developments in the health care industry, including the impact of increases in health care costs,
government programs to control health care costs, changes in drug utilization and cost patterns and
i
ntroductions of new drugs
i
ncrease in credit risk relative to our clients due to adverse economic trends or other factors
other risks described from time to time in our filings with the SE
C
Thes
e and other relevant factors, including those risk factors in “Item 1
A
—
Risk Factors” in this Annual Report
—
and any other information included or incorporated by reference in this Report, and information which may be contained
i
n our other filings with the
SEC, should be carefully considered when reviewing any forward
-
l
ooking statement.
It
e
m 1
A
—
R
i
s
k Fa
c
t
o
r
s
G
eneral Risk Factor
s
S
tate and Federal regulations could restrict our ability to conduct business
.
Numerous state and federal laws and regulations affect our business and operations. The categories include, but
are not necessarily limited to
:
•
h
ealth care fraud and abuse laws and regulations, which prohibit certain types of payments and referrals as well as
fal
se
c
laim
s
ma
de
in
co
nn
ec
ti
o
n
w
ith h
e
a
l
th benefit program
s
•
ERISA and related regulations, which regulate many health care plan
s
•
s
tate legislation regulating PBMs or imposing fiduciary status on PBMs
•
c
onsumer protection and unfair trade practice laws and regulation
s
•
n
etwork pharmacy access laws, including “any willing provider” and “due process” legislation, that affect aspects of
o
ur pharmacy network contract
s
•
wholesale distributor laws, including pedigree paper laws
•
l
egislation imposing benefit plan design restrictions, which limit
h
ow our clients can design their drug benefit plans
•
v
arious licensure laws, such as managed care and third party administrator licensure laws
•
drug pricing legislation, including “most favored nation” pricing and “unitary pricing” legislatio
n
•
pharmacy laws and regulations
•
privacy and confidentiality laws and regulations, including those under HIPA
A
•
t
he Medicare prescription drug coverage law
•
o
ther Medicare and Medicaid reimbursement regulations
•
t
he Prescription Drug Marketing Act
•
potentia
l
regulation of the PBM industry by the U.S
.
Food and Drug Administratio
n
•
pending legislation regarding importation of drug products into the United State
s
•
s
tate laws regulating the business of insurance