Rite Aid Tries to Dismiss Generic Drug Pricing Class Action Lawsuit

Top Class Actions’s website and social media posts use affiliate links. If you make a purchase using such links, we may receive a commission, but it will not result in any additional charges to you. Please review our Affiliate Link Disclosure for more information.

Rite Aid is trying to get a class action lawsuit claiming the pharmacy hikes drug prices for insured customers dismissed.

In its motion to dismiss, the pharmacy defends its practice of offering two prices for the same generic drugs — one price for insured customers, and a lower price for uninsured customers through an “Rx Savings Program.”

Rite Aid claims that plaintiff Robert Josten was unable to cite any laws that prohibit a company from offering the same drugs at multiple prices.

They also protest Josten’s claim that RiteAid’s pricing structure is deceptive, claiming that the “Rx Savings Program” is publicly advertised and available to all Rite Aid consumers who wish to participate.

In January, Josten filed the Rite Aid generic drug overcharge class action lawsuit claiming that Rite Aid’s “Rx Savings Program” was nothing but a ploy to increase profits by getting higher copays out of insured customers. According to Josten, the “Rx Savings Program” isn’t a discount at all, but represents the real cost of drugs.

He claims that the price offered to insured customers outside of the “Rx Savings Plan” are artificial, higher prices that the pharmacy reports to insurance companies, who, in turn, charge consumers higher copays than they otherwise would. Josten says this practice is unlawful because pharmacies required to report “usual and customary” drug prices to insurance companies.

RiteAid fires back at Josten’s claim that the pharmacy’s practice of offering different prices to insured and uninsured customers is unlawful, saying that “Although the relationships between [Josten], plan, the plan’s PBM [price base model], and Rite Aid are undeniably governed by a network of contracts, he identifies none and otherwise cannot identify a source of any obligation Rite Aid owes him to include RSP [retail sales price] prices in its calculation of U&C [usual and customary] prices.”

Josten’s argument against Rite Aid hinges on the claim that he was financially injured by Rite Aid’s pricing structure. Rite Aid argues that not only did Josten fail to provide evidence that laws exist which cover which drug prices are presented to consumers, but he also fails to state how Rite Aid’s “Rx Savings Program” impacted his copays.

The company states that it is the insurance company, not the pharmacy, that sets copays, so how much insured customers are charged for copays is out of Rite Aid’s control. The company asserts that “there are simply no facts alleged in the complaint that suggest [Josten’s] co-payments could be any different, or that anything Rite Aid did impacted the amount of those co-payments.”

Rite Aid then goes on to argue that in his Rite Aid class action lawsuit, Josten in fact recognized “that Rite Aid’s role in such matters is limited to collecting and remitting co-payments to the PBM or insurer.” This statement takes aim at Josten’s use of Medicare Part D and Medicaid statutes to back up his argument that Rite Aid’s pricing structure is unlawful.

Rite Aid claims that Josten does not say that he purchased the drugs with either of those plans, but even if he had made that claim, it wouldn’t have strengthened his case because “interference with negotiations between plan sponsors and pharmacies” is banned by Congress. So, even if Josten had paid for his drugs with Medicare Part D and Medicaid, Rite Aid would not have been able to impact prices delivered to customers of those plans.

Josten is represented by Walter W. Noss, Joseph P. Guglielmo and Erin Green Comite of Scott+Scott Attorneys at Law LLP, and by Alfred G. Yates Jr. of the Law Office of Alfred G. Yates Jr. PC.

The Rite Aid Generic Drug Pricing Class Action Lawsuit is Josten v. Rite Aid Corp., Case No. 3:18-cv-00152-JLS-JLB, in the U.S. District Court for the Southern District of California.