CVS Sued over Alleged Fraudulent Drug Pricing

A California woman is suing CVS Health Corp. claiming that the nation’s largest drugstore chain is charging customers co-payments for some prescription drugs that actually exceed the cost of the drugs. According to the named plaintiff, Megan Schultz, CVS is surreptitiously charging customers who use insurance more for drugs, though their co-payments, more than the drugs would cost if they paid cash. Megan Schultz v. CVS Health Corporation, 17-cv-359, U.S. District Court for the District of Rhode Island (Providence).

The suit, filed in CVS’ home state of Rhode Island, charges that pharmacy benefit managers get to keep the extra money from the co-payments, known as “clawbacks.” The these agreements are made with benefits managers like Express Scripts Holding Co. and CVS Caremark. The woman’s lawyers, who are seeking class action status, allege that, “CVS, motivated by profit, deliberately entered into these contracts, dedicating itself to the secret scheme that kept customers in the dark about the true price’’ of medicines. Most consumers remain unaware of the availability of cheaper cash pricing because agreements between pharmacies and benefits managers don’t permit the disclosure.

This suit follows others filed around the country against UnitedHealth Group Inc., which runs the benefit manager OptumRx; Cigna Corp., which contracts with OptumRx; and Humana Inc.

Schultz and the proposed class are represented by McIntyre Tate LLP, Hagens Berman Sobol Shapiro LLP, and Stanley Law Group.