Pile of drug blister packs TheBCBS companies alleged that CVS had offered lower prices for"hundreds" of generic drugs and later told insurers that the priceswere much higher than they actually were.

|

Blue Cross Blue Shield insurers in six states have sued CVSHealth Corp. over an alleged scheme to overcharge them for genericdrugs by submitting claims for payment at "inflated prices."

|

The lawsuit, filed May 27 in the Rhode Island federal court,added to mounting pressure that CVS has been facing since 2015 overits cash discount programs, which it said were designed to competewith Walmart and other "big-box" discounted pharmacies.

|

According to the complaint, health insurers typically negotiate"lesser-of" contracts with pharmacy benefits middlemen to pay the lowercost of either the negotiated drug price or the cash price thatinsured patients would pay. But the BCBS companies alleged that CVShad offered lower prices for "hundreds" of generic drugs and latertold insurers that the prices were much higher than they actuallywere.

|

Related: BCBS throws support behind Civica Rx in fight tocurb drug prices

|

"By intentionally submitting falsely inflated usual andcustomary prices, CVS knew that it was being overpaid for thesegeneric drug transactions. In fact, as internal documents show,that was CVS's plan all along," BCBS's attorneys from PartridgeSnow & Hahn wrote in the 46-page complaint.

|

"CVS has now pocketed billions of dollars in ill-gotten gainsthrough this unlawful scheme— including many millions fromplaintiffs," they said.

|

CVS, however, is not the only pharma firm to land in hot waterover claims for prescription drug prices.

|

Last month, 50 independent pharmacies sued OptumRx, a major pharmacy benefit manager,in a proposed class action over its alleged failure to comply withstate pharmacy claims reimbursement laws.

|

That suit claimed that OptumRx paid local pharmaciessubstantially less than it paid large chain retail pharmacies likeCVS or Walgreens and knowingly reimbursed local pharmacies belowwholesale cost to stock necessary generic prescription drugs.

|

Still, CVS is preparing for a planned trial later this year oversubstantially the same issue in the first class action to targetthe Woonsocket, Rhode Island-based company for overcharging forgeneric drugs.

|

CVS has said in financial filings that it is "defending itselfagainst these claims."

|

The BCBS suit has cited "internal documents" from public legalfilings to argue that CVS concealed its alleged scheme fromthird-party payors for years.

|

"Had CVS been open and notorious about its fraudulent pricingscheme, it never would have succeeded—plaintiffs would haveinsisted that CVS submit the correct usual and customary price,"the complaint said. "Indeed, while carrying out this scheme, CVSinternally feared that third party payors would learn of thedeception and demand correction."

|

The plaintiffs in the case, captioned Blue Cross and Blue Shieldof Alabama v. CVS Health, are represented by Christian Jenner, PaulKessimian and Phoebe Roth of Partridge Snow & Hahn.

|

Read more: 

Complete your profile to continue reading and get FREE access to BenefitsPRO, part of your ALM digital membership.

  • Critical BenefitsPRO information including cutting edge post-reform success strategies, access to educational webcasts and videos, resources from industry leaders, and informative Newsletters.
  • Exclusive discounts on ALM, BenefitsPRO magazine and BenefitsPRO.com events
  • Access to other award-winning ALM websites including ThinkAdvisor.com and Law.com
NOT FOR REPRINT

© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.