Express sells unit tied to pricey drug
Express Scripts is trimming some of its ties to a $35,000-a-vial medicine made by Mallinckrodt, selling a unit that helps patients access some high-priced drugs.
Avista Capital Partners, a private equity firm, will buy Express Scripts’ United BioSource division, the firms said. United BioSource’s website says it helps “maximize product access and commercialization,” helps drug companies “overcome access and adherence challenges” and provides drug testing services.
It also runs a free drug program that gives away Acthar to patients who can’t afford it, Express Scripts said this year.
Acthar, which is used to treat lupus, forms of arthritis and several other diseases, has faced questions from health insurers, investors and politicians over its price.
In May, investor Jim Chanos said he was shorting shares of both Mallinckrodt and Express Scripts, claiming a “murky alliance” between the companies that has helped raise drug prices.
“Acthar is the epitome of excessive drug prices,” Chanos said in the slide presentation at an investor conference, noting that the list price has increased “exponentially” from $40 a vial in 2001. Most of those increases occurred before Mallinckrodt took ownership of the drug in 2014.
Express Scripts Chief Executive Officer Timothy Wentworth said at a June investor conference that “we do everything we can to get the price down, but Mallinckrodt sets the price of their drug.”
“Mr. Chanos’ claims are without merit,” Express Scripts spokesman Phil Blando said this week. “Our interests are aligned with our clients to deliver savings and help patients get the drugs they need.”
Express Scripts’ main business is to manage prescription drug benefits on behalf of clients such as employers and insurers to help keep prices down.
The United BioSource division, which primarily serves pharmaceutical manufacturers and was a frequent party to litigation, “presented conflicts of interest” with the core business, Eric Coldwell, an analyst for Robert W. Baird & Co., said. He rates Express Scripts’ stock neutral.
In a securities filing on Nov. 14, Express Scripts said that two new lawsuits named United BioSource as a defendant, including an antitrust lawsuit that also names Mallinckrodt as a defendant in an alleged pricefixing scheme for Acthar.
In the filing, Express Scripts said that it believes its subsidiaries “are in substantial compliance with applicable laws, rules and regulations in all material respects.”
Mallinckrodt declined to comment on the lawsuit or the United BioSource sale. Chanos didn’t respond to an email requesting comment.
Avista, a private equity firm that says it has about $5 billion under management, declined to comment on whether United BioSource would continue the assistance program for Acthar.
Acthar will still be distributed by an Express Scripts subsidiary, CuraScript, said Jennifer Luddy, another Express Scripts representative.
Mallinckrodt shares were up less than 1 percent to close at $21.92. Express Scripts was relatively unchanged at $61.44.