One of the country’s largest Pharmacy Benefit Managers, St. Louis, Missouri-based Express Scrips has sent an alert to pharmacies that they will start to expand their network offerings to “pharmacies predominately engaged in mail-order practice.”
The network expansion represents a willingness to engage with online pharmacy businesses in order to “evolve with industry trends,” according to the company’s letter.
The news comes as the company moves towards closing its $52 billion acquisition by health insurer Cigna as part of an effort to modernize and insulate itself from the threat of new entrants to the healthcare industry.
The move, which was first reported by Axios, represents a bit of a reversal for the company which had previously gotten into legal trouble for attempting to kick online pharmacies off of its network.
In 2016, the company threatened to boot mail-order pharmacy startup PillPackcare from its network for “misrepresenting itself” as a retail pharmacy when it was acting as a mail-order pharmacy.
While the initial dispute was resolved, the two companies found themselves in the midst of another disagreement earlier this year after Express Scripts said its PillPack contract was set to expire without an agreement on payment rates going forward. As of now, PillPack still lists Express Scripts as one of its PBM partners on its website.
Earlier this year the company was sued by another online pharmacy startup, San Francisco-based Carezone, which alleged Express Scripts was engaging in anti-competitive practices by planning on barring the company from the PBM’s network.
The startup accused Express Scripts of using its market position to unfairly bolster its own mail-order business, which represents a little less than half of its revenue.
With this most recent network expansion, Express Scripts opens up the ability to less acrimoniously partner with pharmacy startups like CareZone and PillPack, which was acquired by Amazon for $1 billion.
The terms through which mail order pharmacies can contract with Express Scripts has not yet been released, but the détente represents the need to be flexible in an industry bracing itself for disruption from new entrants like Amazon.
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