California Jury Clears CVS In Generic Drug Overpayment Case

June 29, 2021

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Source: Fierce Healthcare, by Paige Minemyer

A California jury has cleared CVS in a years-long lawsuit alleging the pharmacy giant overcharged them by more than $121 million for generic drugs.

A group of insured pharmacy customers in six states filed suit against CVS Pharmacy in 2015, claiming that the company overcharged them and their insurers for generic drugs while charging low, flat-fee prices through a discount program for cash-pay customers.

A federal jury in the court for the Northern District of California unanimously determined on Wednesday that the pharmacy chain did not violate statutes in the six states with its Health Savings Pass program.

“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,” CVS said in a statement to Fierce Healthcare.¬†“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.”

The program at the center of the suit has been a source of controversy, and a number of insurers have also filed suit against CVS of late in relation to the program. Decisions in those suits are still pending.

CVS canceled HSP in 2016 following the class-action suit’s filing but replaced it with a similar successor program, the Value Prescription Savings Card. In both programs, a patient can pay a monthly fee for discounts on cash prices for generic medications; it’s largely designed for the uninsured.

Across all of the challenges, both customers and insurers allege that CVS used the programs to deliberately obfuscate the cost of drugs to bilk them for more money.

“In essence, the unlawful scheme that CVS designed allowed CVS to have its cake and eat it too: CVS could maintain and increase its cash-paying customer base while also maintaining higher reimbursement payments from third-party payors and higher copayments from¬†plan participants who filled their prescriptions at CVS pharmacies,” the plaintiffs wrote in the 2015 complaint.

CVS has called the allegations “baseless” across the board.

 

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