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Are Investors Miscalculating Impact of Express Scripts, Anthem Suit?


Express Scripts (ESRX - Get Report) shares jumped 2% after the company announced that it filed counterclaims in the lawsuit Anthem (ANTM - Get Report) filed against the company in March.

Express Scripts was trading at $72 per share on the morning of April 19, the day the company announced its counterclaims. The shares jumped to $73.72 Wednesday and have since cooled off a bit, trading at $73.12 Thursday morning.

Express Scripts acts as the pharmacy benefit manager (PBM), or a price negotiator for drug companies on behalf of patients, for Anthem, a health insurance company. Anthem filed a lawsuit against Express in March, claiming $15 billion in damages because it said Express Scripts was not passing savings along to Anthem.

Express Scripts' counterclaims say that the suit is a breach of contract, and that Anthem accepted a $4.67 billion cash payment from Express Scripts in 2009.

"With this counter litigation... it's become more clear that they're receiving higher than average market rates because they paid $4.7 billion back in 2009," said David Larsen, analyst at investment bank Leerink Partners. "As a part of that deal they took higher than average rates from [Anthem]. [Anthem] wants market rates, but they're...