IN THE CIRCUIT COURT OF MONTGOMERY COUNTY, ALABAMA ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) )

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1 IN THE CIRCUIT COURT OF MONTGOMERY COUNTY, ALABAMA MEDFUSIONRX, LLC v. Plaintiff, DAVID BRONNER, in his official capacity as Secretary-Treasurer and Chief Executive Officer of RSA, DR. PAUL R. HUBBERT, in his official capacity as the Chairman of the TRS/PEEHIP Board of Control, SARAH S. SWINDLE, in her official capacity as the Vice-Chairman of the TRS/PEEHIP Board of Control, MARCUS H. REYNOLDS, JR., in his official capacity as Deputy Director of RSA, Defendants. CIVIL ACTION NO. VERIFIED COMPLAINT AND REQUEST FOR TEMPORARY RESTRAINING ORDER, PRELIMINARY INJUNCTION, AND PERMANENT INJUNCTION COMES NOW, Plaintiff MedfusionRx, LLC, and hereby files the following Verified Complaint against Defendants. In support thereof, MedfusionRx states as follows: PARTIES, JURISDICTION, AND VENUE 1. Plaintiff MedfusionRx is an Alabama corporation with its principal place of business in Alabama. MedfusionRx has at all pertinent times provided pharmaceutical services to residents of Alabama within the meaning of Ala. Code ( Defendant David Bronner is sued in his official capacity as the Secretary- Treasurer and Chief Executive Officer of Retirement Systems of Alabama, and chief executive officer of Public Education Employees Health Insurance Plan ( PEEHIP. Defendant is over the age of nineteen (19 years and is a resident of the State of Alabama.

2 3. Defendant Dr. Paul R. Hubbert is sued in his official capacity as the Chairman of the TRS/PEEHIP Board. Defendant is over the age of nineteen (19 years and is a resident of the State of Alabama. 4. Defendant Sarah S. Swindle is sued in her official capacity as the Vice Chairman of the TRS/PEEHIP Board. Defendant is over the age of nineteen (19 years and is a resident of the State of Alabama. 5. Defendant Marcus H. Reynolds is sued in his official capacity as the Deputy Director of RSA. Defendant is over the age of nineteen (19 years and is a resident of the State of Alabama. 6. The Defendants are the members of the TRS/PEEHIP Board, which will be referred to collectively as the TRS/PEEHIP Board. The TRS/PEEHIP Board manages and governs PEEHIP, which is a health benefit plan created and existing pursuant to Alabama Code 16-25A-1, et seq. PEEHIP has at all pertinent times been a health benefit plan providing pharmaceutical service benefits, including prescription drugs, to active and retired education employees. 7. The Circuit Court of Montgomery County, Alabama, has jurisdiction over this case in accordance with Rule 65 of the Alabama Rules of Civil Procedure. 8. Venue is proper in the Circuit Court of Montgomery County, Alabama, because a state entity is named as a defendant in this action. FACTS 9. Alabama enacted , et seq., otherwise known as the Any Willing Provider statute in 1988.

3 Ala. Code ( The Any Willing Provider Statute provides, in part, as follows: No health insurance policy or employee benefit plan which is delivered, renewed, issued for delivery, or otherwise contracted for in this state shall: (1 Prevent any person who is a party to or beneficiary of any such health insurance policy or employee benefit plan from selecting the pharmacy or pharmacist of his choice to furnish the pharmaceutical services, including without limitation, prescription drugs, offered by said policy or plan or interfere with said selection provided the pharmacy or pharmacist is licensed to furnish such pharmaceutical services in this state; or (2 Deny any pharmacy or pharmacist the right to participate as a contracting provider for such policy or plan provided the pharmacist is licensed to furnish pharmaceutical services, including without limitation, prescription drugs offered by said policy or plan. 11. MedfusionRx is an independent pharmacy that has been providing specialty pharmacy services to patients located throughout Alabama since MedfusionRx is a pharmacy licensed by the Alabama State Board of Pharmacy. 12. MedfusionRx provides its patients with high quality pharmacy services, including unique programs designed for patients suffering from complex medical conditions. MedfusionRx s therapeutic programs include valuable solutions for Hepatitis C, Bleeding Disorders, Respiratory Syncytial Virus, Rheumatoid Arthritis, Multiple Sclerosis, Oncology and Growth Hormone. 13. MedfusionRx has created a network of dispensing pharmacies that currently provide medications, services, and other care to patients in all fifty states. 14. MedfusionRx s standards, policies, procedures and clinical protocols are consistent with the high standards of leading national health plans.

4 15. MedfusionRx is accredited by the Accreditation Commission for Health Care, a nationally recognized accrediting organization. 16. MedfusionRx has participated as a contract provider under policies and plans offered by the Defendants in the State of Alabama. 17. MedfusionRx has already agreed, and will continue to agree, to provide pharmacy services, including but not limited to providing specialty prescription drugs and related services that meet the terms and requirements set forth by the Defendants under PEEHIP. 18. MedfusionRx has agreed, and continues to agree, to be bound by the terms of reimbursement set forth by the Defendants under PEEHIP. 19. MedfusionRx is, and has been, qualified and willing and remains ready, willing and duly able to provide specialty pharmacy services as a contract provider under PEEHIP. 20. Prior to October 1, 2010, Express Scripts, Inc. was the claims administrator for PEEHIP. MedfusionRx provides specialty pharmacy services to PEEHIP patients. 21. As a provider of specialty pharmacy services, MedfusionRx has served patients covered by PEEHIP plans without any complaints from Express Scripts or PEEHIP, and with no question whatsoever as to MedfusionRx s capacity or ability to provide specialty pharmacy services to PEEHIP and its participants. 22. MedfusionRx has never been subject to an adverse audit of Express Scripts. Rather, MedfusionRx has met and exceeded all requirements and expectations of Express Scripts and PEEHIP.

5 23. The Defendants have announced that effective October 1, 2010, PEEHIP s specialty pharmacy network will be closed. After October 1, 2010, BioScrip Pharmacy Services, Inc. ( BioScrip will be the sole approved specialty pharmacy provider for PEEHIP patients. 24. Defendants failed to provide any prior notice directly to MedfusionRx, and presumably others, of the decision to close PEEHIP s specialty pharmacy network. Rather, the announcement occurred in PEEHIP s newsletter, which was sent to PEEHIP participants in August The newsletter informed PEEHIP s participants that, effective October 1, 2010, BioScrip would be PEEHIP s only approved provider of specialty pharmacy services. A true and correct copy of the newsletter is attached hereto as Exhibit MedfusionRx desires, and is qualified, to continue to participate in PEEHIP s specialty pharmacy network as it has done for four prior consecutive years. 26. Defendants closure of PEEHIP s specialty pharmacy network violates of the Any Willing Provider Statute. 27. The Any Willing Provider Statute applies to health insurance and employee benefit plans providing for pharmaceutical services, including without limitation, prescription drugs. Ala. Code ( PEEHIP is a health insurance and/or employee benefit plan as defined by the Any Willing Provider Statute. 29. MedfusionRx is a pharmacy and provides pharmacy services as defined and contemplated by the Any Willing Provider Statute. 30. MedfusionRx has always met or exceeded, and continues to meet or exceed, all requirements for participation in PEEHIP and has agreed, and continues to agree, to

6 the terms of reimbursement set forth by PEEHIP. 31. Despite being aware of the Any Willing Provider Statute and its requirements, Defendants made a conscious, intentional decision to ignore the Any Willing Provider Statute and close PEEHIP s specialty pharmacy network in direct contravention and violation of the law. 32. Because of the Defendants closure of PEEHIP s specialty pharmacy network, MedfusionRx has been forced to advise its existing patients who are plan participants that it will no longer be approved under PEEHIP as of October 1, Because of the cost of specialty pharmacy prescriptions, it is not reasonable nor expected that patients will elect to have their specialty pharmacy prescriptions filled at a specialty pharmacy that is not approved for coverage by PEEHIP. Therefore, all of MedfusionRx s patients who are PEEHIP participants have been required to be transitioned to BioScrip for specialty pharmacy services for such prescriptions to be covered by PEEHIP. 34. On August 3, 2010, General Counsel for The Retirement Systems of Alabama, William T. Stephens, confirmed in writing that PEEHIP elected to incorporate Alabama s Any Willing Provider Law, which would allow PEEHIP participants to us MedfusionRx as their specialty pharmacy. The letter specifically states that under this provision of law, if MedfusionRx is a licensed pharmacy, and a PEEHIP participant elects to purchase specialty drugs from MedfusionRx, the plan is obligated to pay for those drugs, as provided by the plan, the same as it would pay for the drugs purchased from any other pharmacy licensed by the Alabama Board of Pharmacy. A true and correct copy of this correspondence is attached hereto as Exhibit 2.

7 35. On September 14, 2010, PEEHIP changed its position. Marcus H. Reynolds, Jr., Deputy Director of RSA, wrote that PEEHIP has concluded that Alabama s Any Willing Provider statutes are not applicable to PEEHIP. And we have further concluded that pursuant to the laws specifically governing PEEHIP, PEEHIP must limit its providers for its plan year beginning October 1, 2010, to those providing services pursuant to contracts competitively bid during the 2010 bid process. A true and correct copy of this correspondence is attached hereto as Exhibit MedfusionRx has at all pertinent times been ready, willing, and able to participate in PEEHIP, maintain and service its present patients who are PEEHIP participants, serve additional PEEHIP participants in the future, and perform all acts necessary to participate in PEEHIP. 37. MedfusionRx has at all pertinent times been ready, willing and able to provide specialty pharmacy services to participants of PEEHIP. 38. MedfusionRx has at all pertinent times been ready, willing, and able to agree to the terms of reimbursement set forth by PEEHIP. 39. MedfusionRx has continued to provide specialty pharmacy services through November 10, 2010, pursuant to a Temporary Restraining Order entered by Judge Hobbs in MedfusionRx, LLC v. Public Education Employees Health Insurance Board of Control, et al., case number CV , in the Circuit Court of Montgomery County, Alabama, on September 28, A true and correct copy of the Order is attached hereto as Exhibit 4. Pursuant to this Order, the Defendants were enjoined from excluding MedfusionRx from providing service for PEEHIP members or the specialty pharmacy network that provides

8 services for PEEHIP. 40. Because the Defendants in the case before Judge Hobbs are state agencies, Defendants have moved to dismiss the action pursuant to state sovereign immunity. MedfusionRx anticipates that the action before Judge Hobbs will be dismissed on November 10, Because the Temporary Restraining Order will expire on November 10, 2010, MedfusionRx requires immediate relief from this Court to grant a Temporary Restraining Order in an effort to prevent the Defendants in this case from violating Alabama law by excluding MedfusionRx from the PEEHIP specialty pharmacy network. COUNT I: TEMPORARY RESTRAINING ORDER 42. MedfusionRx adopts and incorporates by reference each of the preceding paragraphs as if fully set forth herein. 43. MedfusionRx will suffer immediate and irreparable harm if Defendants are allowed to exclude MedfusionRx from the specialty pharmacy network. This includes, but is not limited to, the loss of MedfusionRx s PEEHIP patients throughout the State of Alabama. Indeed, Defendants actions may cause MedfusionRx s patients with hemophelia and other patients with serious illnesses to suffer an interruption in pharmaceutical services when those services are required to sustain their well-being. 44. MedfusionRx s inclusion as a specialty pharmacy under the PEEHIP program is invaluable to MedfusionRx, because its PEEHIP customers will not use MedfusionRx unless it is an approved PEEHIP specialty pharmacy. The loss of all of MedfusionRx s PEEHIP customers will cause irreparable harm to MedfusionRx in an industry which relies upon maintaining existing customers.

9 45. Closure of the specialty pharmacy network will prohibit MedfusionRx from providing specialty pharmacy services; it will cause the loss of a significant number of patients and customers; it will damage existing referral relationships; it will cause monetary damage and lost profits to MedfusionRx; it will perpetuate the harm already caused by virtue of (a MedfusionRx s notifying prescribers that existing patients must use BioScrip beginning in October 1, 2010, and (b the contact with MedfusionRx customers soliciting their business to BioScrip, all made possible by the actions of Defendants. The damage in process will continue and grow. Once customers are lost, they will not return. The loss of these customers is a core part of MedfusionRx s business that will place MedfusionRx in a position of losing business that cannot be reversed. The damages being inflicted against MedfusionRx as of the filing of this Complaint are serious; they are in danger of exacerbating; and the implementation of the network and its changes will lead to a course causing irreparable harm and damage to MedfusionRx, which is in the process of occurring as of the date of filing. 46. MedfusionRx presently serves numerous customers who presently receive specialty pharmacy services paid for by PEEHIP. Losing these customers will amount to a loss of a significant portion of MedfusionRx s business; it will likely have a compounding effect; and, therefore, it would jeopardize the business. 47. In order to have a good reputation and to be considered reliable, a pharmacy must maintain its existing customers. Being deprived of a patient deprives a company of more than just that patient; it also deprives the company of its reputation and reliability in the industry. The amount of damages which MefusionRx will lose due to Defendants actions is immeasurable. It is practically impossible to calculate the loss of all current and future PEEHIP

10 patients in the State of Alabama. 48. The only way to prevent Defendants from excluding MedfusionRx in violation of the Any Willing Provider statute is to seek injunctive relief. Hence, MedfusionRx has no adequate remedy at law. 49. An injunction against Defendants will maintain the status quo and, consequently, will not cause Defendants to suffer any undue hardship. If this Court grants the requested temporary restraining order and injunction, the potential injury to Defendants is nonexistent or, at worst, minimal. No irreparable harm will accrue to any party or person if the injunctive relief is provided. MedfusionRx has been providing benefits under the plan; it is capable of continuing to do the same; and a delay in PEEHIP s closure of the specialty pharmacy network will in no way harm any person or any party. The equities in granting the requested relief completely favor MedfusionRx. 50. In addition, the public interest will be served by granting the proposed temporary restraining order and injunction. State law guarantees pharmacies the right to participate in plans that provide insurance benefits to the residents of Alabama and allows patients and healthcare providers the opportunity to choose among qualified pharmacies. It is in the public interest that this law be enforced to protect the residents of the State of Alabama from the harm created when health insurance plans are closed as Defendants now attempt. It harms the citizens of Alabama when exclusive contracts are provided to one pharmacy, in violation of statute, and as attempted by Defendants. The public interest requires the requested relief. 51. Finally, MedfusionRx has a reasonable chance of success on the ultimate merits of this case. The Any Willing Provider Statute applies to PEEHIP, which is a health insurance and employee benefit plan[] providing for pharmaceutical services, including without

11 limitation, prescription drugs. MedfusionRx is a licensed pharmacy within the meaning of the Any Willing Provider Statute, which specifically states that no health insurance policy or benefit plan in this state shall... [d]eny any pharmacy... the right to participate as a contracting provider for such policy or plan. Ala. Code ( By excluding MedfusionRx from the PEEHIP Plan in violation of the Any Willing Provider Statute, Defendants have acted under the Defendants mistaken interpretation of the law. The temporary restraining order is necessary to 1 compel Defendants to perform the ministerial act of including MedfusionRx as a specialty pharmacy under the PEEHIP Plan; and 2 enjoin the Defendants from excluding MedfusionRx from the PEEHIP specialty pharmacy network under a mistaken interpretation of the law. 53. Defendants have provided no justification for taking actions that are directly contrary to the Any Willing Provider Statute. 54. MedfusionRx s attorneys verify, by signing below, that they have notified Defendant s counsel, Shannon Holliday, by ing her a copy of this pleading, of MedfusionRx s intent to seek the entry of a temporary restraining order, enjoining Defendants from closing PEEHIP s specialty pharmacy network. WHEREFORE, PREMISES CONSIDERED, MedfusionRx respectfully requests this Court to issue a Temporary Restraining Order to Defendants as follows: (a Enjoining the Defendants, their agents and all others who work or provide assistance on their behalf, from excluding MedfusionRx from the PEEHIP specialty pharmacy network; (b Prohibiting Defendants, their agents and all others who work or provide assistance on their behalf, from contacting or advising existing MedfusionRx customers

12 that MedfusionRx is not an approved specialty pharmacy provider under the terms of PEEHIP; (c Enjoining all further written or oral communication to PEEHIP beneficiaries and referring clinics which state or imply that MefusionRx is no longer an approved provider of specialty pharmacy services under PEEHIP; and (d Providing for such further and appropriate relief to which it may be entitled. COUNT II: PRELIMINARY AND PERMANENT INJUNCTION 55. MedfusionRx adopts and incorporates by reference each of the preceding paragraphs as if fully set forth herein. 56. Defendants closure of the specialty pharmacy network against all specialty pharmacies but BioScrip is clearly in violation of the terms of the Any Willing Provider Law and will irreparably harm MedfusionRx in that if Defendants are allowed to continue to violate the Any Willing Provider Law, MedfusionRx will lose additional patients and accounts which MedfusionRx has earned, and which are vital to MedfusionRx s business and share of the specialty pharmacy market. 57. Unless a preliminary and thereafter permanent injunction is entered enjoining Defendants from excluding MedfusionRx from the specialty pharmacy market, MedfusionRx will have no adequate remedy at law and will be forced to watch its business wither. 58. By excluding MedfusionRx from the PEEHIP Plan in violation of the Any Willing Provider Statute, Defendants have acted under a mistaken interpretation of the law. The temporary restraining order is necessary to 1 compel Defendants to perform the ministerial act of including MedfusionRx as a specialty pharmacy under the PEEHIP Plan; and 2 enjoin the

13 Defendants from excluding MedfusionRx from the PEEHIP specialty pharmacy network under a mistaken interpretation of the law. WHEREFORE, PREMISES CONSIDERED, MedfusionRx respectfully requests this Court, after appropriate hearing, enter an ORDER as follows: (a Preliminarily and thereafter permanently enjoining the Defendants, their agents and all others who work or provide assistance on their behalf, from excluding MedfusionRx from the PEEHIP specialty pharmacy network; (b Preliminarily and thereafter permanently prohibiting Defendants, their agents and all others who work or provide assistance on their behalf, from contacting or advising existing MedfusionRx customers that MedfusionRx is not an approved specialty pharmacy provider under the terms of PEEHIP; and (c Preliminarily and thereafter permanently enjoining all further written or oral communication to PEEHIP beneficiaries and referring clinics which state or imply that MefusionRx is no longer an approved provider of specialty pharmacy services under PEEHIP. COUNT THREE: DECLARATORY JUDGMENT 59. MedfusionRx adopts and incorporates by reference each of the preceding paragraphs as if fully set forth herein. 60. Defendants have taken the position that Alabama s Any Willing Provider statutes are not applicable to PEEHIP. Based upon this mistaken interpretation of the law, Defendants have excluded MedfusionRx from the PEEHIP specialty pharmacy network. 61. MedfusionRx posits that Defendants do not have the right to exclude MedfusionRx from the PEEHIP specialty pharmacy network and in so doing, Defendants have

14 acted in contravention to the Any Willing Provider Statute. 62. An actual controversy exists as to whether the Any Willing Provider Statute applies to a state funded health insurance plan such as PEEHIP. 63. MedfusionRx files this declaratory judgment seeking construction of Alabama Code sections and 16-25A-1, et seq. Specifically, Defendants request this Court to determine whether Alabama s Any Willing Provider Statute applies to the PEEHIP Plan created in section 16-25A-1, et seq. 64. MedfusionRx seeks a declaratory judgment which finds that Defendants decision to close the specialty pharmacy network violates the Any Willing Provider Statute. In such case, the Statute mandates that MedfusionRx, a pharmacy approved and licensed by the Alabama State Board of Pharmacy, be permitted to participate in PEEHIP s specialty pharmacy network. Thus, under Alabama law Defendants are prohibited from closing PEEHIP s specialty pharmacy network or selecting an exclusive provider for PEEHIP s specialty pharmacy network. Defendants decision to do so was illegal. WHEREFORE, PREMISES CONSIDERED, MedfusionRx respectfully requests that the Court set a hearing for and grant the requested injunctive and declaratory relief, and award such other relief as may be just and proper in the circumstances.

15 Russell Gay Vice President, Managed Care & Manufacturer Relations for MedfusionRX, LLC STATE OF COUNTY OF Before me, the undersigned authority in and for said County in said State, personally appeared Russell Gay, who first being duly sworn, states that the matters contained therein are true and correct. Sworn to and subscribed before me on this the day of November, Notary Public

16 Robert R. Baugh (Bar No.BAU003 Jaime C. Erdberg (Bar No. ERD004 Attorneys for Plaintiff MEDFUSIONRX, LLC OF COUNSEL: SIROTE & PERMUTT, P.C Highland Avenue South Post Office Box Birmingham, AL Tel.: ( Fax: ( Defendants to be served at: David Bronner c/o RSA 201 South Union Street Montgomery, AL Dr. Paul R. Hubbert c/o TRS/PEEHIP Board 201 South Union Street Montgomery, AL Sarah S. Swindle c/o TRS/PEEHIP Board 201 South Union Street Montgomery, AL Marcus H. Reynolds c/o RSA 201 South Union Street Montgomery, AL 36104