Jury rejects lawsuit against CVS
A federal court jury in Oakland has rejected a lawsuit accusing CVS Pharmacy of overcharging millions of customers by $121 million for years of purchases of generic drugs in California and five other states.
The suit claimed CVS was violating a federal law that prohibits pharmacies from charging a higher price to customers with private insurance, or coverage under Medicare or Medicaid, than the “usual and customary” price they charge cashpaying customers for the same prescriptions.
Plaintiffs said the copayments the pharmacy giant charged to insured customers were often much higher than the prices for cashpaying customers enrolled in a CVS membership program. The suit said CVS did not disclose the lower prices to customers covered by insurance or government programs. The company said its discount policy was legitimate and denied deceiving or overcharging customers.
After a twoweek trial, the jury found unanimously Wednesday that CVS had not defrauded customers or violated consumer protection laws in any of the six states: California, Arizona, Florida, Illinois, Massachusetts and New York.
“We are pleased that the jury recognized that CVS Pharmacy did not overcharge consumers, and that we provided the correct usual and customary prices for insurance claims,” said Michael DeAngelis, a company spokesman. “Our pharmacists will continue working with patients to help them save money at the pharmacy counter while helping them on their path to better health.”
Plaintiffs lawyer Jonathan Levine declined to comment on the verdict but said his clients were considering whether to appeal.
CVS began a discount program called Health Savings Pass in 2008 in response to discounts that Walmart and some other retailers had started offering for generics. The pharmacy offered members hundreds of widely used generic drugs at $9.99 for a 90day supply. CVS raised the price to $11.99 in 2011 and discontinued the program in February 2016.
The pharmacy charged members $10 to join the program, a fee it raised to $15 a year in 2011. Health Savings Pass was open to all customers, but the lawsuit said CVS prevented its pharmacists from informing insured customers about the program and then submitted “false and artificially inflated usual and customary prices” to insurers and government agencies.
Rather than continuing to collect copayments, the suit said, CVS should have designated its Health Savings Pass price as “usual and customary” and charged that price to all customers. The plaintiffs said the membership fee was sometimes waived or went uncollected, and that the program was a “ruse.”
CVS countered that insurance companies were aware of Health Savings Pass soon after it began, and submitted statements from several insurers. U.S. District Judge Yvonne Gonzalez Rogers cited those statements in a 2017 ruling dismissing the suit, but the Ninth U.S. Circuit Court of Appeals overruled her in 2019 and said there was enough disputed evidence to justify sending the case to trial.