CVS class action alleges kickbacks for drug formulary access

CVS class action lawsuit overview:

• Who: Roofers’ Unions Welfare Trust Fund filed a class action lawsuit against CaremarkPCS Health LLC and CVS Health Corp.
• Why: The trust fund claims CVS and Caremark sold access to its drug formularies in exchange for kickbacks from drug manufacturers.
• Where: The class action lawsuit was filed in Rhode Island federal court.

A new class action lawsuit alleges CVS Health Corp. and its pharmacy benefit manager (PBM) CaremarkPCS Health LLC sold access to its drug formularies in exchange for kickbacks from drug manufacturers.

Plaintiff Roofers’ Unions Welfare Trust Fund claims CVS and Caremark, one of the largest PBMs in the United States, orchestrated a scheme to sell access to its drug formularies and manipulated its formularies to favor high-cost drugs over low-cost equivalents.

The trust fund argues CVS and Caremark implemented the scheme by using their negotiating power to convince drug companies to divert payments to CVS subsidiary Zinc Health Services LLC for routine PBM services, rather than using its negotiating power to secure those payments as greater rebates for its PBM customers.

“This scheme maximizes Defendants’ profits while driving up the Caremark PBM customers’ prescription drugs cost instead of reducing such costs,” the CVS class action lawsuit says.

The trust fund wants to represent all entities across the United States and its territories that paid or incurred costs for Caremark’s services that were inflated as a result of Defendants’ fraudulent scheme, from March 18, 2020 to the present, and suffered damages thereby.

CVS, Caremark ‘exploited’ customers’ trust, class action claims

Roofers’ Unions Welfare Trust Fund argues CVS and Caremark portrayed themselves as entities that lowered drug costs for their clients, while  exploiting their customers’ trust to enrich themselves.

“Instead of negotiating in good faith with pharmaceutical manufacturers on behalf of Plaintiff and the Class, Caremark used its discretion to design a pay-to-play scheme with drug companies that effectively limited the types of drugs available on its formularies,” the CVS class action lawsuit says.

Roofers’ Unions Welfare Trust Fund claims CVS and Caremark are guilty of unjust enrichment, breach of contract and breach of the implied covenant of good faith and fair dealing, along with violations of the Racketeer Influenced and Corrupt Organizations Act.

The plaintiff demands a jury trial and requests declaratory and injunctive relief along with an award of treble damages for itself and all class members.

Last year, a consumer filed a separate lawsuit against CVS Pharmacy claiming the company illegally charged higher fees to health plan participants and their spouses due to their use of tobacco.

Have you paid or incurred costs for Caremark’s services that you believe were inflated? Let us know in the comments.

The plaintiff is represented by K. Joseph Shekarchi of Shekarchi Law Offices; Avi Josefson of Bernstein Litowitz Berger & Grossmann LLP; Joseph H. Meltzer and Terence S. Ziegler of Kessler Topaz Meltzer & Check LLP; James E. Cecchi, Donald A. Ecklund and Zachary A. Jacobs of Carella Byrne Cecchi Brody Agnello P.C.; and Robert E. Bishop and Frank Partnoy of Bishop Partnoy.

The CVS class action lawsuit is Roofers’ Unions Welfare Trust Fund, et al. v. CaremarkPCS Health LLC, et al., Case No. 1:26-cv-00162, in the U.S. District Court for the District of Rhode Island.

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