United States District Court, E.D. Missouri, Eastern Division
MEMORANDUM AND ORDER
E. JACKSON UNITED STATES DISTRICT JUDGE.
matter is before the Court on the motion of defendants
Express Scripts Holding Company and Express Scripts, Inc.
(collectively, “Express Scripts”) to dismiss
plaintiffs' first amended complaint. Plaintiffs have
responded in opposition, and the issues are fully briefed.
are six individual compounding pharmacies. Express Scripts is
a pharmacy benefit manager (PBM) that contracts with health
plan administrators and insurance payors to manage pharmacy
benefit plans and to facilitate the delivery of prescription
drugs to health plan members and other beneficiaries. The
complaint alleges a conspiracy between the nation's four
largest PBMs-Express Scripts, CVS Health Corporation,
OptumRx, Inc., and Prime Therapeutics, LLC-to jointly boycott
compounding pharmacies and eliminate plaintiffs from the
market by ending insurance coverage for compounded
prescription medications in violation of the Sherman Act, 15
U.S.C. § 1, and state antitrust laws in Florida, Texas
and Virginia. Plaintiffs also assert that Express
Scripts' conduct constitutes unfair competition and
tortious interference with business relations under Florida,
Missouri, Texas and Virginia common law.
eliminate competition from compounding pharmacies, plaintiffs
allege that Express Scripts and its co-conspirators agreed
to: (1) engage in a campaign of misleading statements
impugning the safety and efficacy of compounded drugs through
communications to patients or doctors; (2) drastically reduce
the revenues compounding pharmacies would be reimbursed for
prescribed compounded drugs by eliminating any coverage or
denying claims for compounded medications, even when no
changes were made to underlying health plans; (3) orchestrate
onerous procedural and administrative obstacles for the
compounding pharmacies to fill prescriptions and obtain
reimbursement; (4) conduct abusive audits of compounding
pharmacies on claims the PBMs had approved many months
earlier and then withhold reimbursement payable to
compounding pharmacies on unrelated claims; (5) restrict or
eliminate the use of mail-order delivery of compounded drugs;
and (6) completely remove pharmacies from the networks by
terminating the provider agreements without cause or on a
pretextual basis. Plaintiffs claim that Express Scripts and
its co-conspirators agreed to boycott individual compounding
pharmacies so they could shift the fulfillment of compounded
prescriptions to pharmacies in which they have an economic
interest. Defendants move to dismiss the complaint,
contending that plaintiffs have not pled sufficient
allegations to support their claims.
purpose of a motion to dismiss under Rule 12(b)(6) is to test
the legal sufficiency of the complaint. Fed.R.Civ.P.
12(b)(6). The factual allegations of a complaint are assumed
true and construed in favor of the plaintiff, “even if
it strikes a savvy judge that actual proof of those facts is
improbable.” Bell Atlantic Corp. v. Twombly,
550 U.S. 544, 556 (2007) (citing Swierkiewicz v. Sorema
N.A., 534 U.S. 506, 508 n.1 (2002)); Neitzke v.
Williams, 490 U.S. 319, 327 (1989) (“Rule 12(b)(6)
does not countenance . . . dismissals based on a judge's
disbelief of a complaint's factual allegations.”);
Scheuer v. Rhodes, 416 U.S. 232, 236 (1974) (stating
that a well-pleaded complaint may proceed even if it appears
“that a recovery is very remote and unlikely”).
The issue is not whether the plaintiff will ultimately
prevail, but whether the plaintiff is entitled to present
evidence in support of his claim. Scheuer, 416 U.S.
at 236. A viable complaint must include “enough facts
to state a claim to relief that is plausible on its
face.” Twombly, 550 U.S. at 570; see
id. at 563 (stating that the “no set of
facts” language in Conley v. Gibson, 355 U.S.
41, 45-46 (1957), “has earned its retirement”);
see also Ashcroft v. Iqbal, 556 U.S. 662, 678-84
(2009) (holding that the pleading standard set forth in
Twombly applies to all civil actions).
“Factual allegations must be enough to raise a right to
relief above the speculative level.” Twombly,
550 U.S. at 555.
1 of the Sherman Act prohibits “[e]very contract,
combination in the form of trust or otherwise, or conspiracy,
in restraint of trade or commerce among the several
States.” 15 U.S.C. § 1. To maintain a successful
§ 1 action, plaintiffs must show “(1) that there
was a contract, combination, or conspiracy, i.e., an
agreement or concerted action toward ‘a common goal,
' (2) that the agreement ‘unreasonably'
restrains trade . . . and (3) that the restraint affected
interstate commerce.” T.W. Elec. Serv., Inc. v.
Pac. Elec. Contractors Ass'n, 809 F.2d 626, 632-33
(9th Cir. 1987) (internal citations omitted) (summarizing
Supreme Court doctrine). The first element of a § 1 case
requires that defendants “had a conscious commitment to
a common scheme designed to achieve an unlawful
objective.” Monsanto Co. v. Spray-Rite Serv.
Corp., 465 U.S. 752, 768 (1984). The second element,
unreasonable restraint of trade, can be established under
either a per se rule of illegality or a rule of
reason analysis. E.g., FTC v. Ind. Fed'n of
Dentists, 476 U.S. 447, 457-58 (1986). If a court
determines that the challenged behavior falls within the
discrete category of conduct that is illegal per se,
a plaintiff need not prove its anticompetitive effects.
Flegel v. Christian Hosp., Ne.-Nw., 4 F.3d 682, 686
(8th Cir. 1993).
argue that plaintiffs have failed to adequately allege that
Express Scripts agreed with other PBMs to boycott plaintiffs
or other compounding pharmacies. Defendants contend that the
alleged parallel conduct of other PBMs following Express
Scripts' announcement of its compound management solution
is insufficient to support plaintiffs' conspiracy claims.
Defendants also claim that the PBMs' common perceptions
of the market provide an obvious, non-collusive alternative
explanation for their alleged parallel behavior-that the goal
and effect of their conduct was to reduce the costs of
compounded pharmaceuticals that their third-party payor
clients would be forced to bear.
state a conspiracy claim under § 1 of the Sherman Act,
plaintiffs must allege concerted, as opposed to unilateral,
action. Willman v. Heartland Hosp. E., 34 F.3d 605,
610 (8th Cir. 1994). “Proof of concerted action
requires evidence of a relationship between two or more
legally distinct persons or entities.” Id.
(citing Copperweld Corp. v. Indep. Tube Corp., 467
U.S. 752, 769 (1984)). “[T]he antitrust plaintiff
should present direct or circumstantial evidence that
reasonably tends to prove that the [defendant] and others had
a conscious commitment to a common scheme designed to achieve
an unlawful objective.” Monsanto, 465 U.S. at
764 (quotations and citation omitted). “[I]t is
axiomatic that the typical conspiracy is ‘rarely
evidence by explicit agreements, ' but must almost always
be proved by ‘inferences that may be drawn from the
behavior of the alleged conspirators.'” ES
Dev., Inc. v. RWM Enters., Inc., 939 F.2d 547, 553-54
(8th Cir. 1991) (quoting H.L. Moore Drug Exch. v. Eli
Lilly & Co., 662 F.2d 935, 941 (2d Cir. 1981)).
of parallel conduct and a conclusory assertion of a
conspiracy alone will not suffice to state a plausible
conspiracy claim under § 1 of the Sherman Act.
Twombly, 550 U.S. at 556. However, “[i]t is
possible to infer the existence of an agreement from
consciously parallel conduct if the parallelism is
accompanied by substantial additional evidence-often referred
to as the ‘plus factors.'” Minn.
Ass'n of Nurse Anesthetists v. Unity Hosp., 5
F.Supp.2d 694, 704 (D. Minn. 1998) (quoting In re Potash
Antitrust Litig., 954 F.Supp. 1334, 1350 (D. Minn.
1997)); see Twombly, 550 U.S. at 556-57
(“[W]hen allegations of parallel conduct are set out in
order to make a § 1 claim, they must be placed in a
context that raises a suggestion of a preceding agreement,
not merely parallel conduct that could just as well be
independent action.”). Illustrative plus factors courts
have identified include: “(1) a common motive to
conspire, (2) evidence that shows that the parallel acts were
against the apparent individual economic self-interests of
the alleged conspirators, and (3) evidence of a high level of
interfirm communications.” Mayor & City Council
of Balt. v. Citigroup, Inc., 709 F.3d 129, 136 (2d Cir.
2013); see also In re Musical Instruments & Equip.
Antitrust Litig., 798 F.3d 1186, 1194 (9th Cir. 2015)
(“[P]lus factors are economic actions and outcomes that
are largely inconsistent with unilateral conduct but largely
consistent with explicitly coordinated action.”).
the complaint alleges plus factors in combination with
parallel conduct to support an inference that defendants
agreed with other PBMs to jointly boycott plaintiffs. As to
parallel conduct, the complaint describes a combination of
techniques defendants and their co-conspirators allegedly all
used for the unified purpose of eliminating plaintiffs and
other independent compounding pharmacies from the market.
See SD3, LLC v. Black & Decker (U.S.) Inc., 801
F.3d 412, 427 (4th Cir. 2015) (“A plaintiff establishes
parallel conduct when it pleads facts indicating that the
defendants acted ‘similarly.'” (quoting
Petruzzi's IGA Supermarkets, Inc. v. Darling-Del.
Co., Inc., 998 F.2d 1224, 1243 (3d Cir. 1993)));
Hyland v. HomeServices of Am., Inc., 771 F.3d 310,
320 (6th Cir. 2014) (considering whether the defendants'
actions were “uniform”). Specifically, plaintiffs
allege that, beginning in the summer of 2014, each of the
co-conspirators drastically increased the rejection rates for
claims submitted for compounded medicines, sent misleading
letters to patients and doctors regarding the lack of FDA
approval for compounded medicines, created significant,
meritless obstacles for compounding pharmacies to receive