Express Scripts, Inc. v. Walgreen Co.

Filing 1

COMPLAINT (as redacted for confidentiality) filed by Express Scripts, Inc.; Filing fee $ 350, receipt number 0752-6354317. (Attachments: # 1 Exhibit 1 (redacted), # 2 Exhibit 2 (redacted), # 3 Exhibit 3 (redacted), # 4 Exhibit 4, # 5 Exhibit 5, # 6 Exhibit 6, # 7 Exhibit 7, # 8 Exhibit 8)(White, James)

EXHIBIT 3

atig

1104 Wilmot Road, MS-1426
!Deerfield, Illinois 60015
(Phone: [phone]
!Fax; 047-374-2645
Email: [e-mail]

August 5, 2011
VIA FEDERAL EXPRESS
Ms. Julia G. Brncic
Assistant General Counsel
Express Scripts
One Express Way
St. Louis, MO 63121
Dear Ms. Brncic:
I write in response to your letter to WHS Legal (MU) dated July 27, 2011, in whkh
Express Scripts, Inc., ("ESI") objects to Walgreens providing a letter to patients enrolled
in Medicare Part D prescription drug plans managed by ESI on the grounds that the letter
may violate the "Medicare Marketing Guidelines" ("Guidelines") issued by the Centers
for Medicare and Medicaid Services ("CMS") and certain provisions of the Pharmacy
Provider Agreement between ESI and Walgreens that is effective through December 31,
2011. For the reasons stated below, Walgreens disagrees that its letter is subject to the
Guidelines, thereby rendering violation of those Guidelines impossible, and also disputes
that it has violated the Pharmacy Provider Agreement.
As a threshold matter, Walgreens is compelled to address ESI's claim that "numerous"
Medicare Part D plan enrollees were confused by our letter and are "unnecessarily
anxious" about their ability to obtain their drugs at Walgreens pharmacies in 2011. This
allegation is entirely inconsistent with the letter's self-evident purpose — to reassure its
impacted patients (including, but not limited to, Medicare Part D patients) that they
would have no disruption in accessing their prescription drugs at Walgreens during 2011.
Indeed, our letter states four times — twice in the body and twice in the "Frequently
Asked Questions" section — that all enrollees in ESI-administered plans, including
Medicare Part D plans, may continue to fill their prescriptions at Walgreens pharmacies
through the end of 2011. The two statements in the body of the letter are in bolded type
and the second is set off in a text box. Walgreens clearly took extraordinary care to
emphasize and reiterate this point in order to prevent confusion among recipients of the
letter and to reassure them that there would be no disruption during 2011.
Turning to the substantive allegations in your letter, ESI's assertion that the letter at issue
may violate various aspects of the Guidelines is premised on the erroneous conclusion
that all communications to plan enrollees from pharmacies that are contractors or
subcontractors to Medicare Part D plan sponsors are subject to the Guidelines. As you
selectively quoted, Section 70.12.2 of the Guidelines does provide that plan sponsors are
to "ensure that any providers contracted (and its subcontractors, including downstream
providers or agents) with the plan sponsor comply with the requirements outlined [in the
Guidelines]." However, in language you chose to omit, Section 70.12.2 also clearly

Ms. Julia G. Brncic, Esq.
Express Scripts
August 5, 2011
Page 2
states that this requirement applies only to providers' activities when providers are acting
on behalf of the plans with which they have contracted: (a) "CMS holds plan sponsors
responsible for any comparative/descriptive material developed and distributed on their
behalf by their contracting providers." (If 1); and (b) "The plan sponsor must ensure that
any providers contracted (including subcontractors or agents) with the plan sponsor to
perfonn functions on their behalf related to the administration of the plan benefit,
including all activities related to assisting in enrollment and education, agree to the same
restrictions and conditions that apply to the plan sponsor through its contract." (1l 2)
(emphasis supplied). Outside of this context, CMS explicitly has acknowledged: "[W]e
have no authority under the [Medicare Prescription Drug, Improvement, and
Modernization Act of 2003] to regulate pharmacies' marketing activities." CMS,
"Medicare Program; Medicare Prescription Drug Benefit," 70 Fed. Reg. 4194, 4270 (Jan.
28, 2005).
Walgreens did not disseminate its letter on behalf of any Medicare Part D plan with
which it currently contracts or expects to contract in 2012. Rather, the letter was solely
funded and disseminated by Walgreens, as a pharmacy, on its own behalf and the letter
itself does not state or suggest otherwise. Accordingly, the letter is not subject to the
Guidelines and thus cannot violate any of the specific requirements described in your
letter.
In addition, your assertions that our letter violates Section 2.10 of the Pharmacy Provider
Agreement and Section 11.7 of the Medicare Addendum to that Agreement are both
without merit.

REDACTED

Section 11.7 of the Medicare Addendum states that
' However, nowhere in
REDACTED
the letter does Walgreens promote or prefer any Medicare Part D plan. The letter merely
informs patients currently enrolled in all ESI-administered plans, not only Medicare Part
D plan enrollees, that Walgreens does not currently plan to be part of ESI's retail
pharmacy network as of January 1, 2012; that, as a result, they will be unable to use the
ESI-administered plans in which they are currently enrolled at Walgreens pharmacies as
of that date; and that those patients who are enrolled in Medicare Part D plans will have
an opportunity later this year to switch plans and thus may switch to a plan for 2012 that
includes Walgreens in its retail pharmacy network. All of this information is objectively
true and publicly available. The letter does not encourage or even ask Medicare Part D
plan enrollees to switch plans and does not offer any incentive to induce them to do so.
To the contrary, the letter assures recipients that Walgreens will do everything it can to
transition enrollees in ESI-administered plans to another pharmacy should that become
necessary.
Section 8.1 of the Pharmacy Provider Agreement conclusively demonstrates that
Walgreens communication of this information to ESI plan enrollees does not violate
Section 11.7 of the Medicare Addendum. Section 8.1 of the Agreement
REDACTED

Ms. Julia G. Brncic, Esq.
Express Scripts
August 5, 2011
Page 3

REDACTED

Walgreens ability to
communicate such information under Section 8.1 necessarily means that those
communications also would not violate Section 11.7; otherwise, the Pharmacy Provider
Agreement would be internally inconsistent. Accordingly, ESI itself, as a party to the
Agreement, has acknowledged that Walgreens communication of information concerning
network status does not "promote or prefer" any plan over another.
Finally, Section 2.10 of the Pharmacy Provider Agreement states that
Walgreens
REDACTED
has not attempted, in this letter or otherwise, to disenroll any individual from its current
plan. Even if some Walgreens patients currently enrolled in Medicare Part D plans
administered by ESI decide to switch plans during the open enrollment period later this
year, those switches would not constitute plan disenrollments, because enrollment in
Medicare Part D plans is limited to a single calendar year and thus terminates every
December 31.
Based on the foregoing, ESI' s cease and desist demand is unfounded.
Very truly yours,

Bryan A. Schoeider
Divisional Vice President
Health Law