Problems keep sweeping through the pharmacy benefit management industry like a contagious disease. In a disappointing earnings release on Wednesday, Express Scripts ( ESRX ) revealed that it has become the latest target of state prosecutors investigating major players in the PBM sector. The company's two larger peers -- Medco ( MHS ) and Caremark undefined -- already have come under intense government scrutiny. "While ESRX has been generally above the fray of the legal scrutiny faced by other PBMs, it is obviously no longer immune," wrote Thomas Weisel Partners analyst George Hill, who has a peer perform rating on the stock. "The regulatory scrutiny certainly damages ESRX's credibility in the near-term. "Based on our experience, PBM stocks typically react violently on the downside after such legal issues are announced," Hill wrote. Indeed, shares of Express tumbled 13% to $62.84 late Thursday morning.