By Brendan Pierson
Nov 13 (Reuters) - Elevance Health ELV.N and Cigna Group's CI.N Express Scripts unit on Monday settled the last pending claim in a long-running contract dispute, clearing the way for Elevance to appeal the dismissal of its $14.8 billion lawsuit accusing Express Scripts of overcharging it for prescription drugs.
Elevance, formerly called Anthem, had sued Express Scripts, a pharmacy benefit manager, in Manhattan federal court in 2016, accusing it of failing to negotiate over drug prices in good faith under a 10-year contract that began in 2009. Elevance said it was entitled to $14.8 billion in damages as a result of the breach.
U.S. District Judge Edgardo Ramos last March dismissed the central claim in the case, finding that Elevance could not show that good faith negotiations would have yielded the billions it claimed. He allowed another claim, accusing Express Scripts of failing to reimburse Elevance for prescription drug claims that Express Scripts approved improperly, among other breaches of the contract, to go forward.
In a court filing on Monday, the two sides said they had settled the outstanding claim on undisclosed terms. That allows a final judgment to be entered in the case, so that Elevance can appeal to the 2nd U.S. Circuit Court of Appeals.
A lawyer for Cigna declined to comment. A lawyer for Elevance did not immediately respond to a request for comment.
Pharmacy benefit managers (PBMs) like Express Scripts act as middlemen between health insurance plans and drug companies, negotiating prescription drug prices and maintaining plans' formularies, or lists of covered drugs.
Elevance previously owned a PBM, NextRx. In 2008, with NextRx's business struggling, Elevance started looking for a larger PBM to buy NextRx and contract to provide Elevance's PBM services.
Express Scripts submitted the winning bid for that process, but Elevance alleged in its lawsuit that after being awarded the contract, it refused to negotiate in good faith.
Express Scripts in turn accused Elevance of bad faith. It dropped that claim earlier this year, but reserved the right to revive it if Elevance's lawsuit is revived on appeal.
Express Scripts was bought by Cigna in 2018. Elevance changed its name from Anthem in 2022.
Elevance in 2015 had announced a plan to acquire Cigna for $54 billion in cash and stock. However, the deal was blocked by a U.S. court and never took place.
The case is Anthem Inc v. Express Scripts Inc, U.S. District Court for the Southern District of New York, No. 1:16-cv-02048.
For Elevance: Claudine Columbres of White & Case
For Express Scripts: Ellison Ward Merkel of Quinn Emanuel Urquhart & Sullivan
Express Scripts says Anthem negotiated in bad faith - court filing
Judge dismisses two Express Scripts claims in Anthem drug pricing lawsuit
U.S. appeals court blocks Anthem bid to merge with rival Cigna
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