Express Scripts set for new CEO and court fight
A large St. Louis-area employer is preparing for a leadership change as it battles one of its biggest clients in court. Pharmacy benefits manager Express Scripts is being sued by Anthem. The health insurance company claims it should have a bigger piece of the savings Express Scripts negotiates with drug makers.
"We have negotiated in good faith, while fulfilling our contractual obligations," Express Scripts Chief Executive Officer George Paz told analysts Tuesday during his final quarterly conference call as the head of the company.
"While it is unfortunate that we are in this situation, we believe our legal case is strong."
The fight is over drug pricing. Anthem essentially claims Express Scripts has been charging too much and believes it can save around $3 billion a year under a re-worked deal. Express Scripts accuses the health insurer of not following terms of a deal that includes a payment of more than $4.5 billion in 2009.
Anthem first made the claims in January and followed them up with a lawsuit last month. Express Scripts filed a response last week.
Anthem has stated that is has no plans to end the business relationship, at least for now.
The disagreement over billions of dollars comes as Paz prepares to step down from the post he's held since 2005. He's been with the benefits manager since 1998 and moved up through the senior ranks. Paz started as senior vice president and chief financial officer. He moved into the president's office in 2003, before becoming CEO two years later.
The University of Missouri-St. Louis graduate says his goal as head of the company has always been to improve health outcomes.
"You can measure our success in many ways," he told analysts Tuesday.
"But the most important measure is that we have helped millions of people live better lives."
Current Express Scripts President Tim Wentworth will take over as CEO on May 4.