Express Scripts 2013 Annual Report Download - page 34

Express Scripts 2013 Annual Report 34
• United States ex rel. Steve Greenfield, et al. v. Medco Health Solutions, Inc., Accredo Health Group, Inc., and
Hemophilia Health Services, Inc., (United States District Court for the District of New Jersey, No. 1:12-cv-522)
(unsealed February 20, 2013). This qui tam case was filed under seal in January 2012 and the government declined to
intervene in December 2012. The second amended complaint alleges that defendants Medco, Accredo Health Group,
Inc. (for purposes of this Item 3, “Accredo”) and Hemophilia Health Services, Inc. violated the federal False Claims
Act, the Anti-Kickback Statute, and various state and local false claims statutes when they made charitable
contributions to non-profit organizations supporting hemophilia patients that were allegedly improper rewards or
inducements for referrals of hemophilia patients to Accredo's pharmacy services. The second amended complaint
further alleges that Accredo gave gifts to patients and/or their families that were in excess of the “nominal” gifts
allegedly allowed under the Civil Monetary Penalty Statute and were allegedly improper rewards or inducements for
the use of Accredo's pharmacy services. On May 17, 2013, defendants filed a motion to dismiss the second amended
complaint, which Greenfield opposed in briefings filed on June 17, 2013. On December 30, 2013, the United States
District Court for the District of New Jersey granted defendants’ motion to dismiss relating to Greenfield’s federal
claims, declined to exercise jurisdiction over his state law claims, and provided Greenfield thirty days to file a third
amended complaint. On January 28, 2014, Greenfield filed a third amended complaint in which he asserts claims
similar to those pled in the second amended complaint, but alleges that Accredo gave gifts to patients and/or their
families in violation of the federal Anti-Kickback Statute, as opposed to the Civil Monetary Penalty Statute as
previously pled.
• United States ex rel. David M. Kester, et al. v. Novartis Pharmaceuticals Corp., Accredo Health Group, Inc.,
Amerisource Bergen Corp., BioScrip Corp., CuraScript, Inc., CVS Caremark Corp., Express Scripts, Medco Health
Solutions, Inc., and Walgreens Company (United States District Court for the Southern District of New York, Case No.
1:11-cv-08196-CM) (unsealed January 8, 2014). This qui tam case was filed under seal in April 2013. The federal
government intervened against defendants Novartis Pharmaceuticals Corp. (“Novartis”) and BioScrip, Inc.
(“BioScrip”), and declined to intervene against the remaining defendants, including Express Scripts [sic], Medco,
Accredo and CuraScript, Inc. (“CuraScript”). On January 8, 2014, the United States District Court ordered Kester to
file any second amended complaint by January 30, 2014. On January 30, 2014, Kester filed a second amended
complaint against Accredoand CuraScriptand alleges defendants violated the Anti-Kickback Statute, the federal False
Claims Act, and the false claims acts of twenty-seven states in connection with rebates and discounts provided in
various contracts with Novartis involving the following drugs: Exjade, Gleevec, Tasigna, and TOBI. Kester dismissed
Express Scripts [sic] and Medco from the lawsuit.
• In July 2011, Medco received a subpoena duces tecum from the United States Department of Justice, District of
Delaware, requesting information from Medco regarding its arrangements with Astra Zeneca concerning four Astra
Zeneca drugs. Medco is cooperating with the inquiry. The Company is not able to predict with certainty the timing or
outcome of this matter.
• On October 1, 2012, Accredo received a subpoena duces tecum from the United States Department of Justice,
Southern District of New York, requesting information from Accredo concerning its arrangements with Novartis
Pharmaceuticals Corporation pertaining to the drug Exjade. The Company completed a production of documents and
information to the government in June 2013. This subpoena related to the qui tam lawsuit reported above, United
States ex rel. David M. Kester, et al., in which the government declined to intervene against the Company.
In addition to the foregoing matters, in the ordinary course of our business, there have arisen various legal
proceedings, investigations or claims now pending against us or our subsidiaries. The effect of these actions on future financial
results is not subject to reasonable estimation because the proceedings are in early stages and/or considerable uncertainty exists
about the outcomes. Where insurance coverage is not available for such claims, or in our judgment, is not cost-effective, we
maintain self-insurance accruals to reduce our exposure to future legal costs, settlements and judgments related to uninsured
claims. Our self-insured accruals are based upon estimates of the aggregate liability for the costs of uninsured claims incurred
and the retained portion of insured claims using certain actuarial assumptions followed in the insurance industry and our
historical experience. It is not possible to predict with certainty the outcome of these claims, and we can give no assurance that
any losses in excess of our insurance and any self-insurance accruals will not be material.
Item 4 — Mine Safety Disclosures
Not applicable.