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Precision Rx Compounding, LLC v. Express Scripts Holding Co.

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

May 7, 2018

PRECISION RX COMPOUNDING, LLC, NORTHERN VA COMPOUNDERS, PLLC, TOTH ENTERPRISES, II, PA, THE DAILY DOSE, LP. AND CPRX PHARMACY, LP, Plaintiffs,
v.
EXPRESS SCRIPTS HOLDING COMPANY And EXPRESS SCRIPTS, INC., Defendants.

          MEMORANDUM AND ORDER

          RONNIE L. WHITE UNITED STATES DISTRICT JUDGE

         This matter is before the Court on Express Scripts' Motion to Compel Production of Documents and Incorporated Memorandum in Support (ECF No. 134), Express Scripts' Motion to Compel Production of Documents and incorporated Memorandum in Support (ECF No. 138), and Express Scripts' Motion to Set Deadline for Substantial Completion of Plaintiffs' Document Production and Incorporated Memorandum in Support (ECF No. 147).

         BACKGROUND

         This case alleges an ongoing and multi-faceted conspiracy between the nation's largest pharmacy benefit managers ("PBMs")-including Express Scripts, CVS Health Corporation, Optum Rx, Inc., and Prime Therapeutics, LLC-to jointly boycott compounding pharmacies to eliminate Plaintiffs from the market for pharmaceuticals covered by group and individual health plans (hereinafter a "plan" or "plans"). Plaintiffs further allege that Express Scripts and its coconspirators shifted the filling of patients' prescriptions to pharmacies in which the Defendants and their co-conspirators hold an economic interest. Plaintiffs claim that this type of horizontal group boycott is a "well-established naked restraint of trade barred per se under federal antitrust laws." (ECF No. 1 at 2).

         Plaintiffs claim that Express Scripts and its co-conspirators have collectively employed tactics designed to ensure that the compounding pharmacy industry, and Plaintiffs in particular, cannot survive. Plaintiffs allege that, through their role as the collectively dominant pharmaceutical claim administrators for group and individual health plans, Express Scripts and its co-conspirators improperly decide whether and to what extent pharmacies are reimbursed for prescribed and filled drugs. Plaintiffs claim that Express and its co-conspirators have conspired with each other to boycott compounding pharmacies by eliminating coverage or payment for compounding ingredients, cutting off network access, and deployed a series of unreasonable restrictions and rules that would make it impossible for Plaintiffs and other Pharmacies to fill prescriptions for plan-covered patients and obtain reimbursements that would cover their costs. For example, Plaintiffs allege that Express Scripts and its co-conspirators: (i) engaged in a campaign of misleading statements impugning the safety and efficacy of compounded drugs through communications to patients and/or doctors; (ii) drastically reduced 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 had been made to the underlying health plans; (iii) orchestrated onerous procedural and administrative obstacles for the compounding pharmacies to fill prescriptions and obtain reimbursement; (iv) conducted abusive audits of compounding pharmacies on claims the PBMs had approved many months earlier and then withheld reimbursement payable to compounding pharmacies on unrelated claims; (v) restricted and/or eliminated the use of mail-order delivery of compounded drugs; and (vi) removed pharmacies from the networks altogether by terminating the provider agreements, without cause or on a pretextual basis. (ECF No. 103, ¶IO)

         LEGAL STANDARD FOR MOTION TO COMPEL

         Generally, "[p]arties may obtain discovery regarding any nonprivileged matter that is relevant to any party's claim or defense-including the existence, description, nature, custody, condition, and location of any documents or other tangible things and the identity and location of persons who know of any discoverable matter." Fed.R.Civ.P. 26(b)(1). The Federal rules further provide for limits on discovery requests. Specifically,

the court must limit the frequency or extent of discovery otherwise allowed by these rules or by local rule if it determines that: (i) the discovery sought is unreasonably cumulative or duplicative, or can be obtained from some other source that is more convenient, less burdensome, or less expensive; (ii) the party seeking discovery has had ample opportunity to obtain the information by discovery in the action; or (iii) the proposed discovery is outside the scope permitted by Rule 26(b)(1).

Fed.R.Civ.P. 26(b)(2)(C)(i)-(iii). Rule 37 of the Federal Rules of Civil Procedure governs motions to compel discovery.

         DISCUSSION

         A. Motion to Compel (ECF No. 134)

         Express Scripts asks the Court to compel the production of three categories of documents. (1) Documents from the files of individuals identified in Plaintiffs' Rule 26 initial disclosures. (2) Documents concerning alleged co-conspirators other than CVS Health Corporation, OptumRX, Inc., and Prime Therapeutics, LLC. (3) Documents showing whether Plaintiffs complied with the terms of their respective agreements with Express Scripts and other PBMs.

         1. Documents from the files of individuals identified in Plaintiffs' Rule 26 disclosures

         In their Rule 26 disclosures, Plaintiffs identified eighteen individuals "associated with Plaintiffs who are likely to have discoverable information supporting Plaintiffs' claims in this case." (ECF 134 at 3). Among that group, Plaintiff Northern VA Compounders identified Gregory Chase and Wadid Girgis and Plaintiff Precision identified Randy Leonard. (ECF No. 134 at 4). Plaintiffs advised Express Scripts that the files held by Messrs. Chase, Girgis, and Leonard are "redundant" to those held by other custodians. (ECF No. 134 at 5; ECF No. 136 at 2). Plaintiffs further told Express Scripts that there was no need to search their files because Plaintiffs do not intend to use their documents or introduce their testimony at trial. (ECF No. 134 at 5; ECF No. 136 at 2). Plaintiffs agreed to conduct a search for and produce relevant and responsive, ...


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