There is nothing like a subpoena from New York Attorney General Eliot Spitzer to ruin a company's day. Just ask Express Scripts
Further, Express Scripts revealed that Vermont's attorney general has sent it a civil investigative demand, and subpoenas or investigative demands from attorneys general in 18 other states are on the way. Uh-oh.
These revelations overshadowed the company's quarterly results, which were actually fairly solid. Earnings came in at $65.4 million vs. $59 million in the same period last year, while cash flow from operations surged to $55.5 million from $26.2 million. Meanwhile, Express Scripts expanded its share repurchase program by 4 million shares.
All that's sort of hard to focus on, though, when the company in question is the subject of 20 separate investigations. Still, PBMs are no strangers to lawsuits. Caremark Rx
While it's hard to get excited about an industry embroiled in controversy, PBMs should not be ignored. Even with all the lawsuits, given their established infrastructure and ability to control costs by promoting generics and mail-order pharmacies, it's hard to imagine they would fade away. Express Scripts and its competitors will eventually emerge from the dark clouds hanging over them, and their stocks may then shine.
Fool contributor Brian Gorman is a freelance writer in Chicago. He does not own shares of any companies mentioned in this article.