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Primary Care Pharmacy, LLC v. Express Scripts, Inc.

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

July 17, 2018

PRIMARY CARE PHARMACY, LLC, Plaintiff,
v.
EXPRESS SCRIPTS, INC., Defendant.

          MEMORANDUM AND ORDER

          RONNIE L. WHITE UNITED STATES DISTRICT JUDGE.

         This matter is before the Court on Defendant Express Scripts, Inc.'s Motion to Compel (ECF No. 30), Defendant Express Scripts, Inc.'s Motion to Deem its Requests for Admission Admitted (ECF No. 33), and Plaintiff Primary Care's Motion for Protective Order (ECF No. 46).

         BACKGROUND

         In its Verified Complaint and Jury Demand (ECF No. 1, hereinafter "Complaint"), Plaintiff Primary Care Pharmacy, LLC ("Primary Care") seeks damages because Defendant Express Scripts, Inc. ("Express Scripts") "improperly recoup[ed] from Primary Care $520, 042.83 attributable to diabetic testing strips and diabetic testing supplies, which Primary Care had purchased and distributed to Express Scripts' members and beneficiaries." (Complaint, ¶1).[1]

         Express Scripts is a Pharmacy Benefit Manager ("PBM"). PBMs are third-party contractors that administer the prescription drug benefit plans of insurance carriers and Medicare Part D plan sponsors. (Complaint, ¶¶12, 15). PBMs contract with a network of retail, mail order, and specialty pharmacies, such as Primary Care, to provide and dispense covered prescription services to members. (Complaint, ¶17). Primary Care entered into a contract with Express Scripts, which consisted of a Pharmacy Provider Agreement ("Agreement") and a Network Provider Manual ("Provider Manual").

         Express Scripts conducted an audit of Primary Care beginning on March 23, 2016 to validate that Primary Care purchased the products for which it had billed Express Scripts. (Complaint, ¶21). Primary Care provided Express Scripts with numerous invoices pertaining to Primary Care's purchase of various products, including documentation related to diabetic testing strips and diabetic testing supplies. (Complaint, ¶22). Express Scripts also requested numbers and proof of product origination for billed OneTouch and Freestyle products, two brands of diabetic testing strips and testing supplies. (Complaint, ¶23). Express Scripts claimed to have identified purchase shortages for multiple drugs, which resulted in a discrepancy of $520, 042.83. (Complaint, ¶24). Express Scripts then "recouped" this amount from Primary Care, but Express Scripts' members and beneficiaries allegedly retained the corresponding diabetic strips and testing supplies. (Id.) Primary Care learned that Express Scripts would not accept the purchases made by Primary Care from wholesalers where Primary Care did not provide pedigree[2] information to validate its purchases. (Complaint, ¶25). Primary Care asserts that Express Scripts' full recoupment of $520, 042.83 was not warranted based on Primary Care's ability to provide documentation to validate its purchases of diabetic testing strips and testing supplies from several wholesalers in compliance with the contracts that governed the parties' relationship.

         Primary Care brings this case for Breach of Contract (Count One), Unjust Enrichment (Count Two), and Breach of the Implied Covenant of Good Faith and Fair Dealing (Count Three).

         On June 2, 2017, Express Scripts filed its First Amended Answer and Affirmative Defenses to Plaintiffs' Complaint and Counterclaim. (ECF No. 21). In its Counterclaim, Express Scripts seeks to recover amounts owed to Express Scripts by Primary Care as a result of Primary Care's "contractual breaches and unjust enrichment." (ECF No. 21 at 11, ¶1). Express Scripts seeks "reimbursement for claims paid to Primary Care that were subsequently reversed by Primary Care and for amount Express Scripts, Inc. is entitled to recover due to discrepancies identified in a field audit." (ECF No. 21 at 11, ¶2) Express Scripts brings claims for Breach of Contract (Count I) and Unjust Enrichment (Count II). Express Scripts claims that "Primary Care breached the Agreement by submitting invalid claims to Express Scripts, Inc. which Express Scripts, Inc. paid, and by not refunding the amounts paid by Express Scripts, Inc. after Primary Care reversed the invalid claims." (ECF No. 21 at 21, ¶59).

         LEGAL STANDARD

         Rule 37 of the Federal Rules of Civil Procedure governs motions to compel discovery. See Fed. R. Civ. P. 37 (a)(1) ("On notice to other parties and all affected persons, a party may move for an order compelling disclosure or discovery."). Likewise, Rule 26 governs the scope of discovery in federal matters:

Unless otherwise limited by court order, the scope of discovery is as follows: Parties may obtain discovery regarding any nonprivileged matter that is relevant to any party's claim or defense and proportional to the needs of the case, considering the importance of the issues at stake in the action, the amount in controversy, the parties' relative access to relevant information, the parties' resources, the importance of the discovery in resolving the issues, and whether the burden or expense of the proposed discovery outweighs its likely benefit. Information within this scope of discovery need not be admissible in evidence to be discoverable.

Fed.R.Civ.P. 26(b)(1).

         "A party may move for an order protecting disclosure or discovery, which is granted only upon a showing of good cause." Heller v. HRB Tax Grp., Inc., 287 F.R.D. 483, 485 (E.D. Mo. 2012) (citing Fed.R.Civ.P. 26(c)). The party moving for the protective order has the burden to demonstrate good cause for issuance of the order. Miscellaneous Docket Matter No. 1 v. Miscellaneous Docket Matter No. 2,197 F.3d 922, 926 (8th Cir. 1999). "Because of liberal discovery and the potential for abuse, the federal rules' confer[ ] broad discretion on the [district] court to decide when a protective order is appropriate and what degree of protection is required.'" Id. at 925 (quoting Seattle ...


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