CVS Generic Drugs Suit Fails to Get Class Action


California judge blocks 11 classes in suit that claims CVS charged insurers and insured patients more than uninsured patients.

A U.S. District Court judge has declined to certify 11 state classes in a class action lawsuit alleging that the CVS Pharmacy chain overcharged some customers for generic drugs

However, Judge Yvonne Gonzalez Rogers, with the U.S. District Court for the Northern District of California said she may allow the plaintiffs to amend their motion for certification, according to a Courthouse News Servicearticle.

The decision concerns a class action complaint filed against CVS in August 2015, claiming the pharmacy chain charged insurance companies and insured customers up to four times more for generic prescriptions than they charged uninsured customers to fill the same scripts.

Neither CVS nor the plaintiffs’ attorney responded to requests from Drug Topics for comment.

CVS charges its insured customers above its “usual and customary price” for generic drugs than its cash-paying customers, according to Christopher Corcoran, the lead plaintiff.  The problems stem from CVS’s Health Savings Pass (HSP), which includes long-term maintenance medications often prescribed to elderly and disabled patients, the complaint stated.

When CVS launched its HSP program in 2008, it charged $9.99 for a 90-day supply of a covered drug. “The plaintiffs say that the cheaper drug prices available under the program were CVS’s most common prices, and that it should have used them to calculate its customary price, but did not,” Courthouse News said.

By submitting “false and inflated prices” to third-party payers, “CVS knowingly and wrongfully overcharged plan participants co-pay amounts that often exceeded the HSP drug prices available to the general public for the same drugs,” the complaint stated.

 “The problem I see is that there are fiftyish in that group of [claims administrators] and 1,200 contracts, all of which were separately negotiated by sophisticated parties, and somehow you have common evidence that suggests that there have been affirmative representations?” Gonzalez Rogers said at the hearing. “I don’t see how you are going to get over this hurdle.” Affirmative representation is representation that asserts the existence of facts on a given subject matter. 

Even though CVS discontinued the HSP program in February, 2016, it moved the program’s members to new discount programs, and has continued to exclude discounted prices from its customary price calculations, the attorney for the class, Robert Gilmore, said at the hearing.

“Is that part of the lawsuit? How can I enjoin conduct that is not in front of me?” Gonzalez Rogers said, and tossed out the claim, Courthouse News reported. She also refused to issue an injunction against CVS. “There is no conduct to enjoin at this point.”

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