Kmart suing Catamaran for shortchanging its pharmacies

Kmart has sued pharmacy benefits manager (PBM) Catamaran for breach of contract and alleged violations of state and federal laws regarding reimbursements for prescription drug costs.

See also: Kmart settles pharmacist whistleblower lawsuit for $1.4 million

The lawsuit, filed in Cook County Circuit Court, requests $38 million in damages and a court order requiring Catamaran to reveal its pricing and reimbursement rates. Kmart alleges that Catamaran “improperly manipulated prescription reimbursements” to make the PBM “a more inviting acquisition target.”

“As a result of Catamaran’s misconduct, Kmart has been unable to forecast financials, Kmart has experienced rapidly declining reimbursement rates from Catamaran, and, in many instances, Kmart now loses money on those prescriptions,” Kmart’s lawsuit stated. “Catamaran covered up its scheme by intentionally failing to comply with disclosure and state Prompt Pay Laws and by refusing to provide information requested and owed to Kmart.”

According to Kmart’s lawsuit, Catamaran’s actions involve more than 4.9 million claims and have cost the retailer nearly $40 million. The retailer claims Catamaran paid less than agreed upon or refused to reimburse Kmart for nearly 28,000 pricing appeals.

Kmart said its “efforts to negotiate in good faith with Catamaran to resolve these disputes informally have been rejected by Catamaran at every turn.”  Catamaran has not yet issued a response to Kmart’s lawsuit.

In February, 55 independent pharmacies mostly in Pennsylvania sued Catamaran for alleged illegal conduct that caused them economic losses for the plaintiffs.

In that lawsuit, the independent pharmacies accuse Catamaran of setting unreasonably low reimbursement rates, makes pricing data inaccessible, and failing to be transparent concerning drug rebates.