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Physician Specialty Pharmacy, LLC v. Prime Therapeutics, LLC

United States District Court, D. Minnesota

September 18, 2019

Physician Specialty Pharmacy, LLC, Plaintiff,
v.
Prime Therapeutics, LLC, Defendant.

          Adrienne Dresevic and Robert Dindoffer, The Health Law Partners and Elizabeth R. Odette, Lockridge Grindal Nauen PLLP, Counsel for Plaintiff.

          Christine Lindblad, Archana Nath and Erin J. Barragry, Fox Rothschild LLP, Counsel for Defendant.

          ORDER

          MICHAEL J. DAVIS JUDGE

         The above matter comes before the Court upon the Report and Recommendation of United States Magistrate Judge Tony Leung dated August 8, 2019. Plaintiff has filed objections to the Report and Recommendation.

         Pursuant to statute, the Court has conducted a de novo review of the record. 28 U.S.C. § 636(b)(1); Local Rule 72.2(b). Based upon that review, the Court will overrule Plaintiff’s objections and will adopt the Report and Recommendation in its entirety.

         I. Discussion

         A. Background

         Plaintiff Physician Specialty Pharmacy, LLC (“PSP”) is a specialty pharmacy located in Florida that had a substantial number of customers in Alabama.[1] Defendant Prime Therapeutics, LLC (“Prime”) is a pharmacy benefits manager (“PBM”) that manages the prescription drug benefits for Blue Cross and Blue Shield of Alabama. For several years, PSP filled prescription claims for Prime’s beneficiaries, but in December 2015, Prime began to conduct a series of audits concerning PSP’s claims to Prime for payment. While the audits were conducted, Prime refused to pay PSP for any prescriptions it dispensed to a Prime member.

         On May 16, 2016, Prime terminated PSP from its pharmacy network.

         In April 2017, Prime announced the creation of AllianceRx; a joint venture with Walgreens to provide specialty and mail-order pharmacy services.

         In April 2018, PSP brought this action against Prime. Counts I through XV assert claims under Minnesota and Florida law. Count XVI asserts a number of antitrust violations under Sections 1 and 2 of the Sherman act and Sections 3 and 7 of the Clayton Act.

         By Order dated March 28, 2019, the Court adopted the Report and Recommendation of Magistrate Judge Leung and granted Prime’s motion to dismiss the antitrust claim for failure to state a claim, and deferred ruling on the issue of supplemental jurisdiction over the remaining state law claims. Thereafter, PSP was given leave to file the Second Amended Complaint (“SAC”), and Prime again moves to dismiss the antitrust claim and requests the Court decline to exercise supplemental jurisdiction over the state law claims.

         B. Report and Recommendation

         Following briefing and oral argument, the Magistrate Judge issued a Report and Recommendation again recommending the Court grant the motion to dismiss the antitrust claim and to decline to exercise supplemental jurisdiction over the remaining state law claims. The Magistrate Judge further recommended ...


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