Express Scripts Says Ernst & Young Stole Secrets

Just as Express Scripts began digesting its $29 billion acquistion of Medco Health Solutions, one of its consultants allegedly began trolling for trade secrets to build its own healthcare business, according to a lawsuit filed by the pharmacy benefits manager. The culprit? Ernst & Young and one of its partners, which were "possessed with an evil motive and their conduct shocks the conscious," the lawsuit states.

In its lawsuit, which was filed in a Missouri state court, Express Scripts charges that Ernst & Young partner Don Gravlin was "sneaking" into its headquarters and stealing confidential information over a number of months. Specifically, the pharmacy benefits claims the equivalent of 20,000 pages of data that included information on pricing, integration strategy and business strategy, among other things, was emailed to a private Google account.

Ernst & Young "stole... proprietary and confidential information to grow and develop additional business in its health care segment, including potential additional business with Express Scripts (ESRX), Medco and their direct competitors," the lawsuit states. Express Scripts discovered the alleged theft last August and claims an Ernst & Young partner in charge of the account was aware that Gavlin, who is no longer with the firm, had taken data but did not notify Express Scripts (here is the lawsuit).

Of course, allegations of stealing trade secrets are nothing new and companies regularly monitor consultants and their online activities over such concerns, as happened in this instance. In any event, Express Scripts is a fat target - after purchasing Medco, the pharmacy benefit manager now oversees benefits for more than 115 million people, dispenses one third of all prescriptions filled in the US and controls 60 percent of the mail-order drug market.

Meanwhile, we asked Ernst & Young for comment and will update you accordingly.

[UPDATE: An Ernst & Young spokeswoman sends us a statement acknowleding something went awry. "When we were notified about this matter several months ago, we immediately conducted an investigation and concluded there was a violation of EY policies and the company's policies. The individual at the center of these allegations is no longer with the firm.

"We immediately took all necessary steps to secure the (Express Scripts) data at issue. We are not aware of any instance, nor does the complaint specify any instance, where (Express Scripts) data was inappropriately used for any purpose by Ernst & Young or its personnel, or transmitted to a third party. We believe that EY's prompt action to secure the data prevented any harm to (Express Scripts). We will vigorously contest the claims in the complaint."]