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Real Time Pharmacy Services, Inc. v. Express Scripts, Inc.

United States District Court, E.D. Missouri, Eastern Division

March 30, 2017




         This matter is before the Court on Plaintiff's Motion for Temporary Restraining Order, [Doc. No. 9]. On March 30, 2017, the Court held a telephone hearing on this matter, at which both parties were represented by counsel. Arguments were presented at that time. For the reasons set forth below, Plaintiffs' Motion for a Temporary Restraining Order and Preliminary Injunction is denied.

         Facts and Background

         Plaintiff is a pharmacy in Miami, Florida. Plaintiff and Defendant entered into a contract which consisted of a Pharmacy Provider Agreement (“Agreement”) and a Network Provider Manual.

         On November 3, 2016, Defendant initiated an investigation of Plaintiff. The purpose of the investigation was to validate that Plaintiff purchased diabetic testing supplies for which it had billed Defendant. Defendant requested extensive amounts of information from Plaintiff from July 1, 2016 until October 31, 2016. The request was to confirm that Plaintiff purchased sufficient quantities of the diabetic testing strips for which it had billed Defendant.

         Plaintiff contacted its supplier in an effort to comply with Defendant's request. Plaintiff requested the supplier, Masters Pharmaceutical to provide Defendant with information necessary to validate its purchases.

         On November 18, 2016, Defendant sent an additional letter to Plaintiff. It confirmed that Plaintiff and Masters had responded to its request. The letter stated that it needed additional information. Defendant requested lot numbers and proof of product origination for invoices submitted by Masters on behalf of Plaintiff in cooperation with Defendant's request for three brands of diabetic testing strips. Defendant claimed Plaintiff had obtained these strips from an “unauthorized” distributor of the products.

         Masters notified Plaintiff and Defendant that it did not maintain the lot numbers and proof of product origination because it was not legally required to do so. Until the recent investigation, Defendant had never requested the lot number or proof of origination from Plaintiff or Masters.

         On December 5, 2016, Plaintiff contacted Defendant and included a November 23, 2016 letter from Masters wherein Masters states that it only purchased test strips from fully qualified vendors, each of which had signed a Continuing Supplier Warranty providing that the products Masters purchases are authentic, lawfully sourced and in full compliance with the law. This letter also made clear that Plaintiff had conducted substantial due diligence to verify the legitimacy of Masters and the diabetic testing supplies it purchased from Masters. Plaintiff also noted that moving forward, it would secure the lot number and proof of product origination for all products.

         ON January 12, 2017 Defendant sent another letter to Plaintiff and stated that Defendant identified discrepancies totaling $160, 414.14. On January 26, 2017, Plaintiff again asserted its position that Defendant's claim of purchase discrepancies and recoupment was incorrect and improper where Plaintiff was able to prove it purchased its products from legitimate wholesalers.

         On March 16, 2017, Defendant notified Plaintiff that it was terminating its relationship with Plaintiff and that Plaintiff would no longer be considered a provider or participating pharmacy in any of Defendant's networks. Plaintiff claims this decision would effectively destroy its business.

         The Provider Manual sets forth specific policies and procedures that Plaintiff was required to follow when submitting claims to Defendant for reimbursement. When submitting claims for diabetic supplies, including testing strips, the Provider Manual expressly required Real Time (1) to ensure that the diabetic supplies were purchased from authorized manufacturers, and (2) to maintain pedigree or proof of origin documentation for the products:

[Plaintiff] will validate the authenticity of all products purchased and fully vet their wholesalers and suppliers. [Plaintiff] will be required upon request to furnish pedigree or proof of origin of products regardless of whether the products submitted are prescription drugs or DME products, including but not limited to diabetic supplies, testing strips, lancets and glucometers. In the case of DME products, [Plaintiff] is responsible for ensuring products are purchased from suppliers that are authorized by the manufacturer to distribute these products.

         Plaintiff's obligation to maintain records on the origins of diabetic testing products is repeated in the Provider ...

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