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In the latest spin-offs on the role played by specialty pharmacies in stimulating prescription drug sales, Express Scripts has terminated a contract with a company that uses Horizon Pharma to distribute some of its drugs.
Express Scripts canceled its contract with Linden Care after determining that the mail-order pharmacy apparently distributed drugs primarily manufactured by Horizon, according to a spokesperson. Express Scripts, which is the country's largest pharmacy benefit manager, scrutinizes what it calls captive pharmacies. These captive pharmacies seem to sell products for most drug manufacturers.
In response, Linden brought a lawsuit accusing Express Scripts of "making a trumped up accusation that Linden Care is shipping drugs out of the state in violation of contract [its] ". Express Scripts failed to provide adequate notice that the contract was terminated. Express Scripts sent notice of termination yesterday, Nov. 10
For his part, Horizon issued a statement saying that "the notion that Linden Care is a so-called" captive pharmacy "of Horizon Pharma is entirely false. Less than 5% of our net sales come from prescriptions filled by Linden Care and processed by Express Scripts … And no pharmacy that participates in our primary care patient support programs accounts for more than 13% of our sales net. "
These changes come in the context of increased surveillance of specialty pharmacies, which are regularly used to ship drugs requiring special storage or further education of patients. But some drug companies, such as Valeant Pharmaceuticals and Horizon, are also using them to dispense more common drugs and to request greater reimbursements from drug benefit managers.
The practice has been undergoing a microscope examination in recent weeks after Valeant revealed that she had the option of buying Philidor Rx Services, a specialized pharmacy. These links provoked speculation that the drug manufacturer used Philidor to improperly increase repayments. Philidor accounted for approximately 7% of Valeant's revenues. The drug maker has since cut ties with the pharmacy, which is closing.
This relationship prompted Express Scripts and other PBMs, including CVS Health and OptumRx, to stop doing business with Philidor and, more importantly, to review their contracts with many specialty pharmacies. In the letter of termination sent to Linden, Express Scripts argued that Linden violated its contract because it operates primarily as a mail order pharmacy.
Specialized pharmacies play an important but little understood role. Drug manufacturers favor these operations because insurers and pharmacists are less likely to attempt to replace a branded prescription with a less expensive generic drug. This helps explain why drug manufacturers like Valeant and Horizon find these pharmacies attractive.
Separately, Express Scripts also filed a lawsuit yesterday against Horizon, seeking $ 140 million because the drug maker failed to pay rebates. Horizon maintained that the lawsuit stems from a separate dispute that erupted more than a year ago.
Like Valeant, Horizon has also been criticized for its awards. For example, Horizon increased the price of Vimovo pain tablets after purchasing AstraZeneca's rights at the end of 2013. In January 2014, Vimovo's first day of sales, Horizon raised the price of 60 tablets to $ 959.04, a jump of 597%. According to Truven Health Analytics, which publishes price data, the price rose again to $ 1,678.32 last year.
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