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74
Express Scripts 2015 Annual Report
• We are the subject of various qui tam matters:
• United States ex. rel. Steve Greenfield, et al. v. Medco Health Solutions, Inc., Accredo Health Group, Inc.,
and Hemophilia Health Services, Inc. The complaint alleges defendants violated the federal False Claims
Act, the Anti-Kickback Statute, the Civil Monetary Penalty Statute and various state and local false claims
statutes. Greenfield filed an amended complaint in October 2014, and the Company filed an answer and
affirmative defenses in November 2014.
• United States of America ex. rel. Shane Lager v. CSL Behring, LLC, CSL Limited, Accredo Health, Inc.,
and Coram LLC. The complaint, received on June 23, 2015, alleges Accredo violated the federal False
Claims Act. On August 21, 2015, the Company filed a motion to dismiss the complaint under the public
disclosure bar, for failure to state a claim, and for failure to plead fraud with particularity. Relator filed a
response to the motion on October 21, 2015 and the Company filed a reply on November 12, 2015. On
January 20, 2016, the Court granted the Company’s motion, as well as motions filed by the other
defendants, and the case was dismissed with prejudice.
• We have settled the following case during the year ended December 31, 2015:
• United States ex. rel. David M. Kester, et al. v. Novartis Pharmaceuticals Corp., Accredo Health Group,
Inc., BioScrip Corp., CuraScript, Inc., CVS Caremark Corp. The complaint alleges defendants violated the
Anti-Kickback Statute, the federal False Claims Act, and the false claims acts of twenty-seven states.
During the second quarter, the parties settled the case for approximately $60.0 million. The Exjade
program giving rise to this settlement agreement predates the acquisition of Medco Health Solutions, Inc.
by Express Scripts Holding Company.
• We have received and intend to cooperate with various subpoenas from government agencies requesting
information.
• In addition, we are currently in discussions with Anthem regarding the periodic pricing review process pursuant to
the terms of our PBM agreement with Anthem. While we are actively engaged in good faith discussions with
Anthem and intend to continue to comply with the requirements of the agreement, Anthem has made public
statements threatening litigation. We are confident in the strength of our legal position with respect to the periodic
pricing review and that we are in compliance with our obligations under the agreement. At this time we are unable
to provide a timetable or an estimate as to the potential outcome of these events, any of which could result in a
material adverse effect on our business and results of operations.
While we believe our services and business practices are in substantial compliance with applicable laws, rules and
regulations in all material respects, we cannot predict the outcome of these actions at this time. An unfavorable outcome in one
or more of these matters could result in the imposition of judgments, monetary fines or penalties or injunctive or administrative
remedies.
12. Segment information
We report segments on the basis of products and services offered and have determined we have two reportable
segments: PBM and Other Business Operations. Within the Other Business Operations segment, we have aggregated two
operating segments that do not meet the quantitative and qualitative criteria to be separately reported. During 2014, we moved
our business related primarily to pharmaceutical and biotechnology client patient access programs, including patient assistance
programs, from our PBM segment into our Other Business Operations segment. During 2014, our European operations were
substantially shut down. During 2013, we sold our acute infusion therapies line of business and various portions of our UBC
line of business. Our acute infusion therapies line of business was previously included in our PBM segment and the remaining
businesses were previously included in our Other Business Operations segment. The results of operations for these businesses
are reported as discontinued operations for all periods presented in the accompanying information.