- Blue Cross Blue Shield plans in six states are alleging that CVS Health charged the insurers inflated prices for generic drugs for more than a decade, entitling them to recoup millions in overcharges, according to a lawsuit filed in federal court in Rhode Island on Wednesday.
- CVS denies any wrongdoing, saying it did not overcharge plans for prescription drugs and plans to "vigorously defend against these baseless allegations, which are completely without merit" in a statement sent to Healthcare Dive.
- The insurers allege CVS was charging them more than what members of the public would pay for generic prescriptions with cash.
The suit is the latest in a string of complaints challenging CVS' use of cash discounts programs and whether they denied third-party payers access to the usual and customary prices.
A class action was filed in 2015 and is expected to go to court this year, according to a recent SEC filing from CVS. The suit was brought by people covered by insurance plans, alleging they were ultimately overcharged. Similar suits were brought by the Sheet Metal Workers union and the state of Mississippi.
In their latest complaint, the Blues plans argue if the cash price is lower than the negotiated price in their arrangements with pharmacies, the plans are entitled to only pay the cash price. The cash price operates as a ceiling for reimbursement, the Blues argue.
However, they are alleging CVS set up discount cash programs that sought to obfuscate the true cash price from payers like them.
"This is fraud," the lawsuit, brought by major Blues plans including Florida Blue, BCBS of Minnesota, North Carolina, North Dakota and Kansas City, contends.
The plans allege CVS initially started a membership program that anyone could join — even pets — for a nominal fee and in return received discounts. However, the plans allege this was not a true membership program and that the prices were commonly made available to those not in the program.
The Blues argue this program contained the true cash prices, also referred to as the "usual and customary price." By concealing these prices in the membership program, insurers, including the plaintiffs, were not alerted to, and did not pay the lower U&C, or cash price.
The Blues allege the scheme went on for more than a decade.
CVS "tried to find a way to both broadly offer discounts to retain critical pharmacy customers, including cash paying customers, and also avoid the unprofitable result of reporting the discounted prices as the U&C price," the lawsuit states.
CVS argues these were not the U&C prices, saying in a statement that "neither of these programs were in any way concealed, nor fraudulent."