Express Scripts said Monday that its biggest client, Anthem, will not renew its contract with the pharmacy benefit manager after the current agreement expires at the end of 2019.
The announcement is the culmination of a spat that has lasted more than a year in which Anthem claimed that the PBM failed to pass along billions of dollars in savings from negotiated drug prices.
Express Scripts' shares plummeted more than 10% in the wake of the news that it lost its largest client. Anthem's contract accounts for about 18% of Express Scripts' revenue.
"The company was recently told by Anthem management that Anthem intends to move its business when the company's current contract with Anthem expires," Express Scripts said in the announcement.
Anthem declined to comment on the announcement.
In March 2016, Anthem sued Express Scripts for $15 billion in damages and the ability to end its contract, saying Express Scripts overcharged the insurer by $3 billion annually. Express Scripts later fired back with a lawsuit of its own denying Anthem's allegations.
Anthem and Express Scripts have been working under a 10-year pricing contract since 2009, when Express Scripts agreed to buy Anthem's struggling in-house PBM for $4.7 billion.
"It is difficult for us to understand why Anthem has not recognized the potential value which could be brought forth by engaging in meaningful discussions regarding a mutually beneficial pricing arrangement for the remaining term of our contract and beyond," Express Scripts CEO Tim Wentworth said in the statement. "No other party can offer Anthem savings prior to 2020, and no other party can provide updated pricing terms beyond 2019 without the risk and disruption of a lengthy and complicated implementation."
