Generic Pricing Lawsuit Against CVS Dropped; Walgreens Suit Stands

CVS Health executives are pleased that a class action lawsuit, which alleged that the pharmacy chain colluded with PBMS to drive up the cost of generic drugs, was recently withdrawn.

The plaintiff in the Rhode Island suit, a CVS customer, said she paid more out-of-pocket for drugs when she used her health insurance than she would have if she had paid cash. She blamed the pricing disparity on CVS’s collusion with third parties such as PBMs.

However, the lawsuit against CVS Health was voluntarily withdrawn a few weeks ago, Michael DeAngelis, Senior Director of corporate communications for CVS Health, told Drug Topics.

“The complaint contained numerous demonstrably false assertions that a reasonable prefiling investigation by the law firm would have discovered. As such, we are pleased that the suit was voluntarily withdrawn,” DeAngelis said.

The same plaintiff also filed a similar class action suit against Walgreens, also alleging PBM collusion on drug pricing. That legal action appears to be moving ahead. "Our case against Walgreens was not dismissed and will remain on file until we achieve a just outcome for consumers,” said Steve Berman, managing partner of Hagens Berman, the law firm that filed the suit.

“The complaint lacks merit and we will vigorously defend against the allegations,” Jim Cohn, a spokesperson for Walgreens, told Drug Topics.

For its part, CVS Health notified Hagens Berman that the complaint “contained numerous factual misstatements that, when corrected, make it clear that the plaintiff named in the suit was not overcharged for her prescriptions at CVSPharmacy,” DeAngelis said.

The complaint misrepresented the cash prices for drugs the plaintiff purchased at CVS, erroneously comparing her insurance copays against the cash prices of different drugs, dosages and/or quantities than what was actually purchased by the plaintiff, DeAngelis explained.

“In this withdrawn suit, the plaintiff either compared her copayments for brand name drugs against the cash prices of the generic versions of those drugs, or compared her copayments to the cash prices of those medications at half the dosage or quantity than what was prescribed and dispensed,” DeAngelis said. “The plaintiff’s copayments were, in fact, less than the cash prices for each correct drug, dosage and/or quantity.”

In addition, even though the CVS complaint brought claims on behalf of patients making purchases with their insurance, the plaintiff did not actually use insurance for most of her purchases identified in the complaint, according to DeAngelis. “The few medications the plaintiff did use insurance to make the purchases were not included in the suit’s list of ‘affected drugs’ that were alleged to be intentionally overpriced.”

However, Berman said the law firm is not done with CVS. ”We plan to refile the lawsuit against CVS related to its generic drug pricing scheme promptly," Berman said.