Case: 4:18-cv-01005 Doc.

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Exhibit J
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BSF
BOIES
SCHILLER
FLEXN ER

February 12, 2018

VIA EMAIL
Shon Riley
Senior Legal Counsel II
Express Scripts, Inc.
One Express Way
St. Louis MO 63121

Re: Response to January 29, 2018 Letter on Behalf of Express Scripts, Inc. Re: NCPDP
5654137; Pre-Litigation Notice Pursuant to Ill
of the Express Scripts Inc. Pharmacy
Provider Agreement

Dear Ms. Riley,

Pursuant to paragraph - of the Express Scripts Inc. Pharmacy Provider Agreement, CZ

Services hereby gives notice that it intends to file a complaint against Express Scripts ("ES!"). CZ
Services requests, pursuant to that section, that ES! provide a time to begin the 30-day meet and confer
process with CZ Services in good faith to resolve CZ Services' claims.

Over the course of ten months, multiple rounds of letter writing, and a telephonic meeting, CZ
Services has acted in good faith and transparency to try to help ES! understand its model, apparently to
no avail. At each step of the way, ES! has simply refused to listen-and has advanced a variety of
shifting rationales in service of its ultimate goal of terminating CZ Services from ESI's provider
network. We believe that ESI's ever-changing excuses are simply a pretextual attempt to eliminate what
ES! incorrectly believes is a competitive threat to its own captive mail-order pharmacy business. ESI's
threatened action to eliminate that perceived threat would violate the antitrust laws of the United States
and Any Willing Provider laws, breach ESI's contract with CZ Services, and contravene other laws as
well.

We will not rehash our prior letters here, though we stand on each of our prior representations to
you in response to your shifting rationales for our termination, and we incorporate our prior letters and
meeting by reference here. In your fourth and most recent letter, you again raise incorrect and pretextual
claims.

First, you again claim that that CZ Services is mailing-this time claiming there is an
arrangement between CZ Services and Parliament Delivery. In addition, you claim that CZ Services is
jeopardizing patient safety and is violating state and federal laws. Yet again, these conclusions are
misplaced.

BOI ES SCH ILLER FLEXNER LLP

14 0 1 New York Avenue NW. Woshington, DC 2 0005 I (t) 2 0 2 237 2727 I ( f) 202 237 6131 I www.bsfllp.com
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BSF
Shon Riley
February 12, 2018
Page 2of3

There is no arrangement between CZ Services and Parliament Delivery. As we have discussed

repeatedly, many of CZ Services' patients use a health management service (CareZone) to perform a
wide variety of services on their behalf, including selecting a pharmacy and arranging for the delivery of
medications. CareZone has a contract with Parliament Delivery, not CZ Services. As the patient's agent,
CareZone can select any delivery mechanisms it chooses.

In addition to the ongoing claim of mailing, your latest letter asserts that patient safety is
jeopardized because prescriptions are being sent in the mail. As the operator of the largest mail order
pharmacy in the country, ESI must be aware that mailing prescriptions is a common and permissible
practice. CZ Services follows pharmacy laws and best practices and is regularly inspected by the
California Board of Pharmacy, which is charged with assuring patient safety. CZ Services takes patient
safety very seriously and the pharmacy staff works very hard to ensure our patients receive safe,
effective, and high quality care.

Finally, you make the very serious allegation that CZ Services is violating state and federal law.
First, you cite Cal. Bus & Prof. Code §4059.S(e) to claim that the model must violate either California
law or another state's law, without naming any particular law. Again, the model has been fully disclosed
to the California Board of Pharmacy and no concerns have been raised. Second, you cite DEA rules to
argue that a delivery company cannot deliver controlled substances. Controlled substances are delivered
every day across the nation by delivery companies like Fed Ex, UPS and the USPS (all three of which
are used by ESI's own mail order pharmacy). Parliament Delivery is no different.

Over the course of the last ten months, it has become clear that ESI is engaging in a course of
false accusations that are a pretext to terminating CZ Services' participation in the ESI network. CZ
Services has been fully transparent and has answered every question asked by ESI, including proactively
asking for a meeting. Each time one of ESI's theories for termination is debunked, ESI creates a new
theory. We believe that the true motivation for ESI's actions is that it perceives CZ Pharmacy to be a
competitive threat to ESI's proprietary mail-order pharmacy, because CZ Pharmacy fills prescriptions
for patients who are unable or unwilling to walk in themselves, and thus wish to have their prescriptions
picked up and delivered to them by their agents. ESI's actions appear to be intended to restrict
competition among pharmacies throughout the United States.

The consistent theme throughout your communications is the incorrect allegation that CZ
Services is mailing. Although ESI has been given all of the facts that substantiate that CZ Services does
not mail anything, ESI ignores them. ESI's actions form the basis of at least four causes of action:

• Breach of contract. CZ Services has performed its obligations under the Provider Agreement,
and ESI's termination of that contract under false pretenses breaches the express and implied
terms of that agreement.
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BSF
Shon Riley
February 12, 2018
Page 3of3

• Violation of § 2 of the Sherman Act. ESI has attempted to monopolize the relevant product
market through unlawful acts, including its actions in requiring compliance with unfair adhesion
contracts and taking actions to terminate pharmacies that it views, rightly or wrongly, as a
competitive threat to its captive mail-order business. These actions permit both injunctive relief
and damages under the antitrust laws of the United States.

• Violation of state unfair competition laws. ESI's actions also violate state laws prohibiting
unfair competition, including California Business and Professions Code § 17200.

We remind you that CZ Services serves a particularly vulnerable polychronic population of patients
with services they cannot get elsewhere. Half of those patients are on Medicare and/or Medicaid.
CareZone's innovative services combined with CZ Services' unique compliance packaging results in
improved adherence and better medical outcomes. We encourage you not to forbid our patients' access,
via their insurance plans, to services and medications that have improved their lives.

Please let me know how you would like to move the meet-and-confer process forward pursuant to
Paragraph 11111· Should ESI attempt to terminate prior to engaging in the meet and confer process, it
would cause irreparable harm to CZ Services and its patients which would require immediate
extraordinary judicial relief.

Sincerely,

Isl William A. Isaacson

William A. Isaacson
BOIES SCHILLER FLEXNER LLP