A national class action has been filed against prescription drug plan operator Express Scripts, Inc. on behalf of all U.S. citizens who were or are participants in or beneficiaries of any employer-provided prescription benefit plan (1) that required participants or beneficiaries to pay a percentage co-pay for prescription drugs and (2) for which Express Scripts, Inc. or one of its predecessors-in-interest or subsidiaries serves or has served as the plan's provider of prescription drugs at any time from October 1, 1997, through the present. The action is brought under the Employee Retirement Income Security Act (ERISA) and claims that Express Scripts breached its fiduciary duty to plan participants and beneficiaries in several ways. The participants are seeking declaratory and injunctive relief and a court order requiring Express Scripts to make an accounting of and reimburse consumers and benefit plans for all monies earned through allegedly unlawful activities.

This action arises from what the participants allege is a breach of Express Scripts' fiduciary duty to plan members and the plans themselves. According to the participants, Express Scripts engages in fraudulent and willful misconduct, the goal of which is to unjustly enrich itself. It is claimed that this activity takes many forms--all of which utilize Express Scripts' fiduciary status as the prescription drug provider to various plans. The participants allege that:

(1) Express Scripts uses its position to create "pricing spreads" through which Express Scripts enriches itself at the expenses of the various plans to which it provides drugs.

(2) Express Scripts contracts with various manufacturers to provide prescription drugs to plan participants as well as offer medications for sale through its mail order catalog.

(3) Express Scripts does not disclose at what rate it purchased these drugs to plan administrators and therefore can set a price "spread" between the cost of the drugs and the amount that Express Scripts contracts to be reimbursed by the plan.

(4) The profit created by the spread is pocketed by Express Scripts and not disclosed. This profit, in fact, belongs to the various benefit plans and not Express Scripts.

The participants also allege that Express Scripts uses its relationship with manufacturers to manipulate the drug offerings available in a plan as a means to unjustly enrich itself. According to the participants, Express Scripts has relationships with drug manufacturers and wields a large amount of power because it can determine which drugs to purchase. Frequently, there are several similar drugs available in the marketplace, often from the same manufacturer. These drugs, participants claim, have different prices--despite similar or identical medicinal value. The participants claim that Express Scripts has a duty to provide them with the most cost-effective drugs. However, the participants claim that Express Scripts often determines which drug to offer based on how much "soft money" it can pocket in terms of rebates, mail-order discounts, kickbacks from manufacturers and other incentives offered by manufacturers. The participants claim that Express Scripts will often purchase the more expensive drugs from manufacturers. Participants also claim that these "soft dollars" are not passed on to the plan, but are retained by Express Scripts.

The participants further allege that Express Scripts conspires with drug manufacturers to artificially inflate the cost of drugs. Because many drugs are purchased by the federal government, drug companies desire their drugs to have a high dollar value. The federal government requires that manufacturers certify to them the "best price" for prescription drugs. This price is based on the average wholesale price of the drugs plus any rebates or incentives the company may offer to third-party purchasers, such as Express Scripts. The participants allege that manufacturers will conspire with companies such as Express Scripts to purchase certain drugs based on other factors than certain discounts and rebates it must offer to the government. This may include kickbacks, sales information fees and other "soft money." According to participants, this artificially inflates the cost of certain drugs to the detriment of the various plans serviced by Express Scripts.

According to the participants, these actions represent a breach of Express Scripts' duty to the various plans it services and to the participants and beneficiaries of these plans. The participants allege that Express Scripts is obligated to discharge its duties according to the sole interest of its customers, not its own. Under this obligation, the participants claim that Express Scripts must act with scrupulous good faith and candor, a standard more strict than the requirements of the marketplace. However, the participants allege that Express Scripts frequently, through the actions described above, acts on its own behalf and to the detriment of those it has a duty to serve.