Shares in biotech Horizon Pharma plunged more than 19 percent Wednesday after a pharmacy benefits company sued it for $140 million and dropped a specialty pharmacy from its network.
Express Scripts Holding Co. said Linden Care pharmacy violated its pharmacy network agreement and appeared to dispense mostly Horizon drugs.
Pharmacy benefits managers, such as St. Louis-based Express Scripts, manage and pay for prescription-drug claims for employers and insurers. They often negotiate drug prices and control access to coverage networks.
Horizon, with U.S. headquarters in suburban Chicago, said it has no ownership stake in Linden Care, and that less than 5 percent of its sales are from prescriptions filled by the specialty pharmacy and processed by Express Scripts. It said it has a “diverse group of pharmacies,” and that no one pharmacy accounts for more than 13 percent of sales.
Specialty pharmacies, which sell medications for cancer and certain infectious diseases sometimes under exclusive contract with the pharmaceutical maker, represent a fast-growing, profitable segment of the pharmacy industry. While they represent only 1 percent of all prescriptions, they account for about 20 percent of drug spending, according to the National Business Coalition on Health.
In a statement, Express Scripts said it removed Linden Care from its network after determining that it “predominantly dispensed Horizon prescription drugs and did not fulfill key components of our pharmacy network agreements.”
Express Scripts added that it is evaluating several other pharmacies “that appear to be predominantly dispensing Horizon prescription drugs. In addition, we are reviewing and evaluating all similar captive pharmacy arrangements that we know of and will work to identify others. By captive pharmacies, we mean those pharmacies that derive the vast majority of their prescription volume from one manufacturer and/or one product.”
Horizon said that that accusation is untrue. “The notion that Linden Care is a so-called ‘captive pharmacy’ of Horizon Pharma is entirely false,” Horizon said in a statement. “At best, Express Scripts is being reckless in its allegations and at (worst) it is intentionally attempting to mislead investors.”
Express Scripts’ complaint seeks to recover approximately $140 million from Horizon Pharma. The complaint alleges claims for declaratory relief and breach of contract against Horizon.
Linden Care, based in Woodbury, N.Y., could not be reached for comment.
In trading Wednesday, shares of Horizon Pharma dropped $4.39, or 19.6 percent, to $17.99.