CVS Generic Drug Overcharging Class Action May Be Transferred to R.I.

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Last week, a California federal judge indicated that she wouldn’t dismiss a class action lawsuit that alleges CVS overcharges for generic drugs. However, she also suggested the case may not belong in California.

The CVS price-gouging class action lawsuit was initially filed on July 30, 2015 by plaintiff Christopher Corcoran and a number of other plaintiffs who allege they were charged more through their insurance copays for generic drugs that were purchased at a CVS pharmacy than consumers who pay cash through the CVS Health Savings Pass.

The CVS class action lawsuit accuses the pharmacy of systematically submitting claims to insurance companies at inflated prices, which in turn causes the insurer to charge a higher copay to consumers who use their insurance coverage to help pay for the drug. The plaintiffs claim that CVS customers who use insurance to pay for their drugs pay three to four times the regular price for a generic drug.

CVS Health Corporation and CVS Pharmacy Inc., named as defendants in this price-gouging class action lawsuit, recently filed a motion informing the California court of a related case that was filed in Rhode Island federal court on Feb. 8. The CVS defendants indicated that they intend to request the California class action lawsuit move to Rhode Island.

Earlier this month, the plaintiffs filed a motion in opposition to CVS’ upcoming attempt to transfer the generic drug overcharging class action lawsuit to Rhode Island. They argue that they have already made substantial progress while litigating the case in California.

“Despite full opportunity to do so over the past seven months, Defendants have not once, until now, challenged venue in this District,” the plaintiffs said. They also claim that the CVS defendants did not immediately notify the plaintiffs and the California court about the Rhode Island class action lawsuit.

“Defendants have not made such a showing of ‘inconvenience’ to warrant upsetting Plaintiffs’ choice of forum and the progress made in this venue,” the plaintiffs allege. “If convenience were a substantial factor in this matter, Defendants had seven months to raise it and failed to do so until significant progress occurred before this Court.”

Further, the plaintiffs argue that the Rhode Island class action lawsuit is not substantially similar to the California case because the Rhode Island plaintiffs are insurance companies and other third-party payors while the California plaintiffs are individual consumers.

At a Mar. 8 hearing, U.S. District Judge Yvonne Gonzalez Rogers indicated that she was unlikely to grant a motion by CVS to dismiss the class action lawsuit, but that she would be likely to grant a motion to transfer the price-gouging lawsuit to Rhode Island federal court.

The plaintiffs are represented by Bonny E. Sweeney, Richard Lewis and Kristen Ward Broz of Hausfeld; Pat A. Cipollone, Rebecca R. Anzidei and Robert B. Gilmore of Stein Mitchell Cipollone Beato & Missner LLP; and Elizabeth C. Pritzker, Jonathan K. Levine and Bethany L. Caracuzzo of Pritzker Levine LLP.

The CVS Generic Drug Price-Gouging Class Action Lawsuit is Christopher Corcoran, et al. v. CVS Health Corporation, et al., Case No. 15-cv-03504, in the U.S. District Court for the Northern District of California.