NEWARK, NJ – A federal judge in New Jersey has granted in part and converted in part a motion to dismiss filed by Horizon Blue Cross Blue Shield of New Jersey in a lawsuit brought by Ethical Factor Rx, a Pennsylvania-based specialty pharmacy that alleged the insurer unfairly blocked its participation in Horizon’s exclusive hemophilia treatment network.
The ruling, issued by U.S. District Judge Stanley R. Chesler on January 22, came after months of procedural sparring between the parties, including multiple rounds of filings and oral arguments. Ethical Factor claimed Horizon wrongfully denied its application to join the “Hemophilia Network,” which serves Medicaid patients with the rare bleeding disorder, despite assurances that approval would follow once the pharmacy secured the required state designation.
According to the complaint, Horizon representatives told Ethical Factor that obtaining a “Hemophilia Home Care Provider” certification from the New Jersey Department of Banking and Insurance (DOBI) was the sole requirement for entry into the network. After receiving the designation, the pharmacy applied again but was rejected in March 2025. In an email cited in court filings, Horizon said its network was already “robust and sufficient for the current needs” of Medicaid enrollees and noted Ethical Factor’s out-of-state location—approximately 60 miles from the New Jersey border—as a factor.
Ethical Factor accused Horizon of breaching assurances, acting arbitrarily, and violating fair competition principles by excluding it from the network. Horizon argued that it acted within its discretion and that the pharmacy had no contractual or statutory right to inclusion.
Judge Chesler dismissed two counts seeking declaratory relief but allowed the remaining claims—relating to possible misrepresentation and unfair dealing—to proceed to limited discovery. He also converted part of Horizon’s motion into one for partial summary judgment, signaling that further fact-finding will determine whether Horizon’s communications constituted enforceable promises or routine administrative guidance.
The case continues to test how far insurers can go in restricting specialty pharmacy participation in disease-specific provider networks, a growing issue as states seek to balance access to high-cost treatments with cost control.
- Judge dismisses declaratory relief claims against Horizon but allows limited discovery on others
- Dispute centers on Horizon’s denial of Ethical Factor’s entry into its hemophilia care network
- Horizon maintains its network already meets Medicaid patients’ needs and geographic standards
