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20 ¦ JUNE 15, 2020 NEWS

Blue Cross Blue Shield Sues CVS Over
Inflated Prescription Claims

By Thomas McParland

Blue Cross Blue Shield insurers in six states have
sued CVS Health Corp. over an alleged scheme
to overcharge them for generic drugs by sub-
mitting claims for payment at “inflated prices.”
The lawsuit, filed May 27 in the Rhode Island fed-
eral court, added to mounting pressure that CVS has
been facing since 2015 over its cash discount pro-
grams, which it said were designed to compete with
Walmart and other “big-box” discounted pharmacies.
According to the complaint, health insurers typi-
cally negotiate “lesser-of ” contracts with pharmacy
benefits middlemen to pay the lower cost of either
the negotiated drug price or the cash price that in- The BCBS companies alleged that CVS had offered
sured patients would pay. But the BCBS companies lower prices for “hundreds” of generic drugs and later
alleged that CVS had offered lower prices for “hun- told insurers that the prices were much higher than they
dreds” of generic drugs and later told insurers that actually were.

the prices were much higher than they actually were. ingly reimbursed local pharmacies below wholesale
“By intentionally submitting falsely inflated usual cost to stock necessary generic prescription drugs.
and customary prices, CVS knew that it was being Still, CVS is preparing for a planned trial later
overpaid for these generic drug this year over substantially the
same issue in the first class action
transactions. In fact, as internal to target the Woonsocket, Rhode
documents show, that was CVS’s
plan all along,” BCBS’s attorneys CVS is not the only pharma Island-based company for over-
from Partridge Snow & Hahn firm to land in hot water charging for generic drugs.
wrote in the 46-page complaint. CVS has said in financial filings
“CVS has now pocketed bil- over claims for prescription that it is “defending itself against
drug prices. these claims.”
lions of dollars in ill-gotten gains
through this unlawful scheme— The BCBS suit has cited “inter-
including many millions from nal documents” from public legal
plaintiffs,” they said. filings to argue that CVS concealed
CVS, however, is not the only pharma firm to land its alleged scheme from third-party payors for years.
in hot water over claims for prescription drug prices. The plaintiffs in the case, captioned Blue Cross
Last month, 50 independent pharmacies sued and Blue Shield of Alabama v. CVS Health, are rep-
OptumRx, a major pharmacy benefit manager, in a resented by Christian Jenner, Paul Kessimian and
proposed class action over its alleged failure to com- Phoebe Roth of Partridge Snow & Hahn.
ply with state pharmacy claims reimbursement laws. ¦

That suit claimed that OptumRx paid local phar- Tom McParland of New York Law Journal can be
macies substantially less than it paid large chain contacted at [email protected]. Follow him on
retail pharmacies like CVS or Walgreens and know- Twitter @TMcParlandALM.

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