Park Irmat Drug Corp. Plaintiff - Appellant
Express Scripts Holding Company; Express Scripts, Inc. Defendants - Appellees
Submitted: September 26, 2018
from United States District Court for the Eastern District of
Missouri - St. Louis
WOLLMAN, KELLY, and ERICKSON, Circuit Judges.
WOLLMAN, CIRCUIT JUDGE.
Irmat Drug Corporation (Irmat) brought suit against Express
Scripts Holding Company and Express Scripts, Inc. (Express
Scripts), alleging various contract claims, a promissory
estoppel claim, and violations of federal antitrust laws and
state Any Willing Provider laws. The district
court dismissed Irmat's complaint for
failure to state a claim. We affirm.
Scripts is the largest pharmacy benefits manager (PBM) in the
United States. A PBM is a third-party administrator of
prescription drug programs. PBMs process and pay prescription
drug claims made by pharmacies and patients. PBMs also
negotiate drug discounts with pharmaceutical manufacturers,
handle pharmacy benefits for health plans and self-insured
entities, and develop lists of drugs that are approved for
reimbursement. A patient's health insurance plan chooses
which PBM covers their drug-related expenses. Express Scripts
and another PBM, CVS Health (CVS), account for 65% of the PBM
create networks of pharmacies in which PBM members can
receive their prescription pharmaceuticals at covered,
discounted rates. To be successful, independent pharmacies
must participate in the largest PBM networks. These
independent pharmacies contract with PBMs either directly or
through an agent such as a Pharmacy Services Administrative
Organization (PSAO). Ninety-seven percent of retail
pharmacies in the United States participate in Express
Scripts's pharmacy network.
Scripts also operates a mail-order pharmacy that fills
prescriptions by mail nationwide. It is the only mail-order
pharmacy allowed in Express Scripts's PBM network.
According to Irmat, PBMs that own mail-order pharmacies
dominate the mail-order pharmacy service industry.
Nevertheless, independent pharmacies, like Irmat, have been
able to successfully provide mail-order pharmacy services to
customers in the United States.
is a New York-based, independent pharmacy located in midtown
Manhattan. It opened in 1978. For many years, Irmat was a
successful retail pharmacy that filled and sold prescriptions
via its storefront location. In 2013, Irmat began focusing on
dermatological pharmaceuticals. It entered into a patient
assistance program with dermatological drug manufacturers for
pharmaceuticals that often had no generic equivalent. Under
the programs, the manufacturers would pay a portion of a
patient's insurance co-payment to Irmat. Because of its
participation in these programs, Irmat expanded its business
into a nationwide mail-order pharmacy and increased its staff
from twenty employees to 208 employees.
joined Express Scripts's PBM network in 2012 through
AccessHealth, a PSAO, and gained access to more than 100
other PBMs. In October 2014, Express Scripts sent Irmat a
Network Provider Agreement (the agreement) requiring that
Irmat sign or risk termination from its network. The
agreement required Irmat to meet the definition of a
"retail provider," which was defined as a pharmacy
"that primarily fills and sells prescriptions via a
retail, storefront location" and that "shall not
include mail order" pharmacies. The agreement also
included recredentialing requirements whereby a retail
provider must disclose updated information to Express
Scripts. Failure to comply with the recredentialing
requirements constituted a breach of the agreement and was
cause for termination from Express Scripts's network.
Finally, the agreement allowed Express Scripts to
unilaterally terminate the contract without cause upon thirty
days written notice. Irmat signed the agreement.
Scripts required Irmat to submit a recredentialing
application in July 2015. Irmat disclosed that 35% of its
business came from its retail pharmacy and that 65% of its
business came from its mail-order pharmacy. On August 7,
2015, Express Scripts sent Irmat an e-mail, the subject line
of which read "Express Scripts credentials
approved," and the text of which stated:
We are pleased to inform you that your recently submitted
credentials have been reviewed and you are approved to
continue in the Express Scripts Holding Company pharmacy
then hired more employees, constructed a multi-million dollar
facility in New York, and spent time and money acquiring
mail-order accreditations. In May 2016, Express Scripts sent
Irmat a letter demanding Irmat cease and desist its
mail-order operations because they were in violation of the
agreement. Irmat responded with a letter referring to the
August 2015 e-mail. On July 15, 2016, Express Scripts replied
that Irmat would be terminated from the network in sixty-one
days, primarily because of Irmat's mail-order business.
Irmat appealed the termination through Express Scripts's
internal appeal process. Express Scripts affirmed its
decision in a letter dated August 22, 2016, which added that
it was also terminating Irmat without cause. Express Scripts
terminated Irmat from its network on or about September 30,
review de novo the grant of a motion to dismiss.
Christiansen v. W. Branch Cmty. Sch. Dist., 674 F.3d
927, 933-34 (8th Cir. 2012). We accept "as true the
complaint's factual allegations and grant[ ] all
reasonable inferences to the non-moving party."
Braden v. Wal-Mart Stores, Inc., 588 F.3d 585, 591
(8th Cir. 2009).
survive a 12(b)(6) motion to dismiss, 'a complaint must
contain sufficient factual matter, accepted as true, to state
a claim to relief that is plausible on its face.'"
McShane Constr. Co. v. Gotham Ins. Co., 867 F.3d
923, 927 (8th Cir. 2017) (quoting Ashcroft v. Iqbal,
556 U.S. 662, 678 (2009)). "We assess plausibility
considering only the materials that are 'necessarily
embraced by the pleadings and exhibits attached to the
complaint.'" Whitney v. Guys, Inc., 700
F.3d 1118, 1128 (8th Cir. 2012) (quoting Mattes v. ABC
Plastics, Inc., 323 F.3d 695, 697 n.4 (8th Cir. 2003)).
"A claim has facial plausibility when the plaintiff
pleads factual content ...