Express Scripts 2013 Annual Report Download - page 23

Download and view the complete annual report

Please find page 23 of the 2013 Express Scripts annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 124

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124

23 Express Scripts 2013 Annual Report
services industry in general could alter the industry dynamics and adversely affect our ability to attract or retain clients. Such
industry shifts could result from, among others: a large intra- or inter-industry merger, a new entrant (including the
government), a new business model, a general decrease in drug utilization, reduced USPS service or the consolidation of
shipping carriers, or the necessary changes or unintended consequences of the federal Patient Protection and Affordable Care
Act, as amended by the Health Care and Education Reconciliation Act of 2010 (the “Health Reform Laws”). Our failure to
anticipate or appropriately adapt to changes in the industry could negatively impact our competitive position and adversely
affect our business and results of operations.
We operate in a complex and rapidly evolving regulatory environment. Changes in applicable laws, rules or regulations, or
their interpretation or enforcement, or the enactment of new laws, rules or regulations, could require us to make significant
changes to our business operations or result in the imposition of fines or penalties. Further, we may be required to spend
significant resources in order to comply with new, changing or existing laws, rules and regulations.
Numerous state and federal laws, rules and regulations affect our business and operations and include, among
others, the following:
• healthcare fraud and abuse laws and regulations, which prohibit certain types of payments and referrals as well
as false claims made in connection with health benefit programs
• ERISA and related regulations, which regulate many aspects of healthcare plan arrangements
• state legislation regulating PBMs or imposing fiduciary status on PBMs
• consumer protection and unfair trade practice laws and regulations
• network pharmacy access laws, including “any willing provider” and “due process” legislation, that affect
aspects of our pharmacy network contracts
• wholesale distributor laws
• legislation imposing benefit plan design restrictions and requirements, which limit how our clients can design
their drug benefit plans
• various licensure laws, such as managed care and third-party administrator licensure laws
• drug pricing legislation, including “most favored nation” pricing
• pharmacy laws and regulations
• state insurance regulations applicable to our insurance subsidiaries
• information privacy and security laws and regulations, including those under the HIPAA omnibus rule
• Medicare prescription drug program participation requirements including coverage standards and beneficiary
protections
• other Medicare and Medicaid reimbursement regulations, including subrogation
• the federal Patient Protection and Affordable Care Act, as amended by the Health Reform Laws, including
regulations applicable to clients operating qualified health plans through the state and federal marketplace
(“Health Insurance Exchange”)
• federal laws related to our Department of Defense arrangement
• federal antitrust laws related to our pharmacy, pharmaceutical manufacturer and client relationships
• international laws
These and other regulatory matters are discussed in more detail under “Part I — Item 1 — Business —
Government Regulation and Compliance” above.
We believe that we are operating our business in substantial compliance with all existing material legal
requirements applicable to us. However, significant uncertainties exist regarding the application of many of these legal
requirements to our business. From time to time, state and federal law enforcement agencies and regulatory agencies have
initiated investigations or litigation involving certain aspects of our business or our competitors’ businesses and, consequently,
we cannot provide any assurance that one or more of these agencies will not interpret or apply these legal requirements in a
manner adverse to our business, or, if there is an enforcement action brought against us, that our interpretation would prevail. In
addition, there are numerous proposed healthcare laws, rules and regulations at the federal and state levels, many of which
could materially affect aspects of our business or adversely affect our results of operations. We are unable to predict whether