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Citron calls Express Scripts culprit in drug price gouging
December 8, 2016 / 7:04 PM / 10 months ago

Citron calls Express Scripts culprit in drug price gouging

Dec 8 (Reuters) - Short seller Citron’s Andrew Left has turned his sights on Express Scripts Holding Co, calling the pharmacy benefit manager (PBM) the “real culprit behind pharmaceutical price gouging.”

Shares of Express Scripts, the largest PBM in the United States, fell as much as 8.8 pct to $69.20.

Drug price increases have been a hot political topic among U.S. presidential candidates over the past two years. President-elect Donald Trump, in a Time magazine article on Wednesday, said he would “bring down drug prices.”

"$ESRX is Philidor of the pharma industry. @therealdonaldtrump promises to fix drug pricing? Two words: EXPRESS SCRIPTS," Citron tweeted on Thursday. (bit.ly/2goUtlT)

Philidor, a now-shuttered specialty pharmacy, is at the center of a controversy involving Canada’s Valeant Pharmaceuticals International Inc.

Valeant’s close ties with Philidor are under investigation following allegations that the drugmaker used the pharmacy to force customers to pay higher prices for its drugs.

Valeant’s increasing dependence on the pharmacy to achieve its sales and profitability goals came to light after Citron published a report in October 2015 focused partly on Philidor.

Following subsequent revelations, several insurers terminated contracts with Philidor, and Valeant cut its ties with the pharmacy. Philidor terminated its operations in January.

Citron also set a price target of $45 on shares of Express Scripts. (bit.ly/2gGrUhy)

Shares of drugstore operator CVS Health Corp, which has a PBM unit, also fell 3.9 percent to $77.40. (Reporting by Natalie Grover in Bengaluru; Editing by Maju Samuel)

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