Healthcare Insurance Giants Elevance Health, Cigna Settle Long-Standing Contract Dispute, Paving Way To Appeal $15B Lawsuit

Elevance Health Inc ELV and Cigna Group's CI Express Scripts have finally ended their prolonged legal battle by settling the last unresolved claim in a contentious contract dispute, paving the way for Elevance to appeal the dismissal of its massive $14.8 billion lawsuit alleging overcharging by Express Scripts for prescription drugs.

Formerly known as Anthem, Elevance initiated legal proceedings against Express Scripts, a pharmacy benefit manager (PBM), in 2016 at a Manhattan federal court. 

Also Read: Healthcare Insurance Giant Cigna Mulls Offloading Medicare Advantage Business.

PBMs like Express Scripts function as intermediaries between health insurance plans and pharmaceutical companies, negotiating drug prices and managing covered drug lists for plans.

The core accusation centered on Express Scripts' purported failure to engage in good-faith negotiations regarding drug prices under a decade-long contract that commenced in 2009. 

Elevance had asserted its entitlement to $14.8 billion in damages due to this breach.

Citing court filings, Reuters noted that U.S. District Judge Edgardo Ramos dismissed the primary claim last March, stating Elevance's inability to demonstrate that good-faith negotiations would have resulted in the claimed billions. 

However, a secondary claim accusing Express Scripts of failure to reimburse Elevance for improperly approved prescription drug claims was allowed to proceed, Reuters reported.

This development enables the case to conclude officially, empowering Elevance to pursue an appeal to the 2nd U.S. Circuit Court of Appeals.

Express Scripts, now under Cigna's ownership since 2018, had countered Elevance's accusations, alleging bad faith on the latter's part. While this claim was dropped earlier this year, Express Scripts reserved the right to reinstate it should Elevance's lawsuit be resuscitated upon appeal.

Price Action: ELV shares are up by 0.07% at $461.74, and CI shares are down 2.34% at $287.62 on the last check Tuesday.

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.