7 Blue plans sue CVS for alleged Overpricing of Generic Drugs

Seven health insurers with businesses that span the nation have sued CVS Health Corp., alleging the Woonsocket, R.I.-based retail giant schemed with pharmacy benefit managers to overcharge health plans for generic drugs.

1. The seven ones : In the Rhode Island case, insurers—including Carefirst of Maryland, Group Hospitalization and Medical Services, CareFirst BlueChoice, Blue Cross and Blue Shield of South Carolina, BlueChoice HealthPlan of South Carolina, Group Hospitalization and Medical Services, Blue Cross and Blue Shield of Louisiana and HMO Louisiana—seek to recoup what they claim they overpaid for “many millions of transactions” over more than a decade.
2. Fraudulent part of CVS: “CVS tried to have its cake and eat it too,” the lawsuit said. “It tried to find a way to both broadly offer discounts to retain critical pharmacy customers, including cash-paying customers, and also, avoid the unprofitable result of reporting the discounted prices as the usual and customary price.”
3. CVS was sued heavily: According to the lawsuit, CVS unveiled its Health Savings Pass program in November 2008, offering a cash discount for 400 of the most commonly prescribed generic drugs to customers willing to pay a membership fee of just $9.99, with therapies for conditions ranging from arthritis to allergies to diabetes. CVS unveiled the initiative as a way to compete with other big-box retailers that were getting into the pharmacy business at the time, including Walmart, Target, Costco, and more.
4. Hiked price of Drugs: A lawsuit accusing CVS of fraudulently hiding the real cost of medications, leaving insured customers paying more for drugs than those without insurance. CVS failed to report the drug prices paid through this program to the insurers it had contracted with, violating industry and contractual standards that required it to report the “usual and customary” rate of the Capital BlueCross, Highmark, HealthNow, Horizon Healthcare Services, and Blue Cross Blue Shield affiliates in Alabama, Florida, Minnesota, North Carolina, North Dakota, and Kansas City have also sued CVS’ over its drug pricing.
5. Class action by many more: Capital BlueCross, Highmark, HealthNow, Horizon Healthcare Services and Blue Cross Blue Shield affiliates in Alabama, Florida, Minnesota, North Carolina, North Dakota, and Kansas City have also sued CVS’ over its drug pricing. The retailer also faces a similar class-action from the Sheet Metal Workers’ Local 20 Welfare and Benefit Fund and Indiana Carpenters Welfare Fund.