United States District Court, E.D. Missouri, Eastern Division
MEMORANDUM AND ORDER
CATHERINE D. PERRY, District Judge.
This matter is before me on plaintiff's motion for preliminary injunction. Plaintiff Alternative Medicine and Pharmacy, Inc., d/b/a Omniplus Pharmacy (Omniplus) brought this suit against defendants Express Scripts, Inc., and Medco Health Services, Inc. (collectively referred to here as Express Scripts). Omniplus, who is currently part of Express Scripts' provider network, sued after Express Scripts sent notice that it was terminating their contract for cause. Express Script's stated reason for the termination was that Omniplus had misrepresented that it did not waive co-payments. Omniplus contends that it does not waive copayments, and argues that if Express Scripts is allowed to terminate the contract it will put Omniplus out of business. I will deny the motion for preliminary injunction for the reasons that follow.
OmniPlus is a community and compounding pharmacy with a mail order business. Express Scripts is a pharmacy benefits manager. OmniPlus has a contract (Provider Agreement) with Express Scripts to provide pharmacy services to members of health plans managed by Express Scripts. The parties' relationship is also governed by a Provider Manual. Approximately 25 percent of OmniPlus' patients are managed by Express Scripts, and those patients represent about 51 percent of its revenue.
On July 31, 2014, Express Scripts sent a letter to OmniPlus terminating its membership in Express Scripts' pharmacy network effective September 1, 2014, alleging contractual violations and asserting a termination for cause. OmniPlus disputed the termination with Express Scripts and then filed suit in this Court on August 25, 2014, alleging breach of the Provider Agreement and violation of Texas law. OmniPlus sought a temporary restraining order and a preliminary injunction preventing its termination from the Express Scripts' pharmacy network. After the parties entered into a stipulation agreeing that Express Scripts would not terminate OmniPlus' Provider Agreement pending the resolution of the preliminary injunction motion, I denied the motion for temporary restraining order. The parties conducted limited discovery and the preliminary injunction hearing was held on September 25, 2014. At the hearing OmniPlus offered one witness, Scott Breimeister, who has worked for the company for nine months and became President at the end of August. Express Scripts also offered one witness, John Gavin, who is a Senior Manager with Express Scripts' fraud, waste, and abuse team and participated in the decision to terminate OmniPlus.
Section 2.4 of the Provider Agreement states that OmniPlus "shall collect from Members... the applicable Copayment indicated by [Express Scripts]" and further provides that "[c]opayments may not be waived or discounted...." [Doc. #38-1 at 3]. The Provider Manual explains what will happen to OmniPlus if it fails to collect co-payments:
Network Provider may not institute Member copayment discount program or otherwise alter a Member Copayment, unless such waiver or discount is required by law. If [Express Scripts] becomes aware of any copayment or cost-sharing discounts being offered by Network Provider - either through audit, investigation, Member statements, or review of Network Provider's website or other advertising materials - Network Provider may be subject to immediate termination. For clarification, if [Express Scripts] identifies fliers, advertisements, or other statements from Network Provider suggesting that copayments will be a flat fee or that copayments will be discounted, capped, or waived will result in termination of Network Provider.
The Provider Agreement provides Express Scripts with an immediate right to terminate OmniPlus from the provider network in the event that:
1. OmniPlus "fails to comply with [Express Scripts'] policies and procedures, including, but not limited to, the Provider Manual";
2. OmniPlus "fails to comply... with Section 2.4 of this Agreement [dealing with copayments]; or
3. OmniPlus "no longer meets credentialing requirements."
[Doc. #38-1 at 4]. The Provider Manual contains a similar provision, except it also includes a right to immediate termination upon notice if "any representation to [Express Scripts] or any response to a question set forth on the Provider Certification is untrue or becomes untrue, " or if OmniPlus "breaches any of its representations and warranties set forth in this Agreement or any other document provided to OmniPlus." [Doc. #25-2 at 4]. Section 4.2 of the Provider Agreement permits Express Scripts to terminate OmniPlus without cause upon 90 days written notice.
The Provider Manual also includes a Texas-specific addendum. Section 5 of the addendum provides in relevant part as follows:
5.1 [Express Scripts] shall provide a written explanation to [OmniPlus] of the reason(s) for termination at least ninety (90) days prior to the effective date of such termination to the extent required by law. On request... and before the effective date of the termination, and within at most sixty (60) days of request, [OmniPlus] shall be entitled to such review and formal, though non-binding, recommendation from [Express Scripts] in ...