Court filing disputes reasoning behind Martella's removal from pharmacy benefit manager's network

JOHNSTOWN, Pa. – An emergency motion for an injunction filed on behalf of 500 Martella’s Pharmacy customers in a class-action lawsuit disputes the reasoning behind Express Scripts Inc.’s termination of the family-owned pharmacy chain’s contract.

Express Scripts, a pharmacy benefit management company that manages drug plans for UPMC and Highmark health insurers, has issued public statements that it removed Martella’s Pharmacy locations from its network due to “its repeated failure to properly disclose it and its affiliated pharmacists’ disciplinary histories and actions relating to the safeguarding and dispensing of controlled substances.”

The statements are in reference to an 2018 criminal case in which pharmacist Joseph Martella was accused of unlawfully dispensing pills to a doctor’s son.

Martella’s ownership, because of stipulations in the pharmacy’s provider agreement with Express Scripts, has not been able to respond to Express Scripts’ statements.

However, the emergency motion for injunction filed in the class-action lawsuit against Express Scripts alleges the pharmacy has disclosed all the information required.

“In fact, Martella’s owner, Jackie Martella, did disclose that adverse event to Express Scripts in 2018, by detailed written notice, and Express Scripts took no adverse action whatsoever at that time,” the motion filed by the law firm of Scanlon & Wojton says.

After an investigation, the matter was resolved in the year from 2022 to 2023 by the pharmacist and agencies including the state Board of Pharmacy and the federal Drug Enforcement Agency, the document said.

“That resolution did not create a new adverse event ... it closed the old one,” the document said. “Express Scripts’ current theory, as articulated in its May 26th notice – namely, that Martella’s had a duty years later to ‘update’ Express Scripts about the resolution of a fully-disclosed 2018 event – is not grounded in any identified, applicable provision of the provider agreement and, even if such a duty existed, the alleged omission is not remotely material under Pennsylvania law governing termination and contract breach.”

Scanlon & Wojton assert in the motion that Express Scripts dropped Martella’s for other reasons, including alleged steering, increased spread-pricing, the consolidation of commercial interests with bigger chain pharmacies, and the intent to eliminate Martella’s as a competitor with bigger chain pharmacies.

Express Scripts’ initial notice for terminating Martella’s contract came in May. The termination was originally to become effective Aug. 15, but Scanlon & Wojton’s filing of the class-action lawsuit in the Cambria County Court of Common Pleas halted that action.

Injunctive relief initially granted by the Cambria County court ordered Express Scripts to maintain the status quo with Martella’s for the duration of the lawsuit. But the suit was subsequently moved at Express Scripts’ request from the county court to federal court, where the injunction expired in September.

Express Scripts terminated Martella’s contract Wednesday, even as the lawsuit continues.

Scanlon & Wojton has filed the emergency motion for another injunction in federal court as it continues moving through procedures to have the case moved back to Cambria County court, where state law issues of alleged unfair competition, patient steering to Express Scripts’ own mail-order pharmacies and price-fixing would be considered.

Express Scripts is not only a manager of pharmacy benefit plans for insurers, but also a competitor with independent pharmacies. Express Scripts is vertically integrated with its own mail-order pharmacy chain, which would be among the remaining options for consumers losing Martella’s Pharmacy as an in-network option.

Patients were blindsided by Express Scripts’ October action to terminate Martella’s from its network, according to Scanlon & Wojton’s motion.

The firm has filed affidavits with testimony from patients, including Norma Creager. Her father, 93, drives to Martella’s Pharmacy in Windber up to twice a week to pick up prescriptions for himself and Creager’s mother, the affidavit says.

Creager and her parents use Martella’s Pharmacy because of its proximity and because it offers Medi-Pacs – easy-to-open, tear-off packages that contain each dose of medication needed and that are labeled with exact times at which the contents should be taken.

“My parents and I were not notified that Martella’s Pharmacy’s status as an ‘in-network’ provider might change on or around Oct. 22, so now we are scrambling to try to find a new pharmacy capable of handling our needs before the current monthly doses of our various prescriptions run out,” Creager’s affidavit says.

The Pennsylvania Department of Health and Human Services, which oversees pharmacy access for Medicaid patients, did not directly answer whether the termination was problematic in its view.

“DHS was notified that Martella’s pharmacies were no longer part of the Express Scripts network,” a DHS spokesperson said in an email. “After the notification, the Department took action to review the availability of both in-person and by-mail options in the area and identified 57 alternative in-network pharmacy locations that can provide continuity of care for former Martella’s customers.”

While the DHS did not define the area encompassing those pharmacies, other sources suggest they are not all located within Cambria County’s borders.

According to the Center for Rural Pennsylvania, a bipartisan legislative agency, Cambria County had 34 pharmacies as of May. Somerset County had 16 total pharmacies.

Since then, the closure of nine Rite Aid pharmacies in Cambria and one in Somerset have reduced the pharmacy numbers in those areas, which still include the now-jeopardized Martella’s Pharmacy locations in the northern part of the county, as well as its Franklin Street flagship location in Johnstown.

The family-owned pharmacy chain also reaches all of Cambria County with its free delivery services and has Somerset County locations in Windber and Central City, as well as its Boswell Prescription Center and a location in Westmoreland County.

Rose Mary Dill, 83, and her husband have been customers of Martella’s since 1967. An affidavit with her testimony has been filed with the latest emergency motion. The Franklin Street location is a couple miles from their residence.

“I cannot drive due to health issues, during which times we are wholly reliant upon Martella’s Pharmacy delivery services and unique customer services for all of our prescription needs,” Dill’s affidavit says.

Her statements argue that she and her husband cannot rely upon mail-order pharmacy services as a substitute for delivery services that Martella’s Pharmacy provides, because there is a risk that they would not receive their medications in a timely manner and would have to skip dosage.

“Access to the Martella’s Pharmacy, including their unique delivery services, is a matter of life and death for me and my husband,” Dill’s affidavit said.

Scanlon & Wojton has said in a statement since Express Scripts’ Oct. 22 action that patients can still have prescriptions filled at Martella’s pharmacies.

Customers who have spoken with The Tribune-Democrat outside Martella’s Franklin Street pharmacy had not yet noticed a difference in the cost of their medications. With the removal of in-network insurance coverage, the pharmacy has apparently chosen to cover the added cost that would otherwise fall on UPMC and Highmark-insured patients.

Martella’s ownership, because of stipulations in the pharmacy’s provider agreement with Express Scripts, is prohibited from making public comments.

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