Insurers accuse CVS of overcharging for generic drugs

Multiple health insurers filed a lawsuit against CVS Health on May 21, accusing the company of upcharging for prescription drugs by submitting claims at "artificially inflated prices." 

CareFirst, Blue Cross and Blue Shield of South Carolina and Blue Cross and Blue Shield of Louisiana are among the seven health insurers that filed the lawsuit in Rhode Island's district court.

"The scheme was, at its core, quite simple," the insurers allege, accusing CVS of offering hundreds of generic drugs at lower prices through cash discount programs while telling the plaintiffs that the prices customers paid were higher. Payers reimbursed CVS based on the higher rates, according to the lawsuit, instead of based on the lower prices CVS allegedly offered to the public.

"CVS has now pocketed billions of dollars in ill-gotten gains through this unlawful scheme—including millions from plaintiffs," the lawsuit alleges.

CVS refutes the allegations. In a statement to Becker's Hospital Review, CVS said, "We did not overcharge plans for prescription drugs, and we will vigorously defend against these baseless allegations, which are completely without merit." The company added that generic drug prices available through discount programs "were not the usual & customary price charged by CVS Pharmacy, nor the price available to the general public. Neither of these programs were in any way concealed, nor fraudulent."

This isn't the first lawsuit CVS is facing over generic drug pricing. In May 2020, six Blue Cross Blue Shield companies filed a lawsuit against CVS Health, claiming that the retail pharmacy chain has "intentionally engaged" in a fraud scheme for more than a decade to overcharge for prescription drugs by submitting insurance claims for payment at artificially inflated prices.

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