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Friday, February 23, 2024 | Back issues
Courthouse News Service Courthouse News Service

Class Claims CVS Overcharges for Generics

     SAN FRANCISCO (CN) - A federal class action accuses CVS pharmacies of overcharging customers for generic prescription drugs by as much as 400 percent and submitting fraudulently inflated claims to insurers.

Christopher Corcoran is the lead plaintiff in the July 30 complaint against CVS over its so-called Health Savings Pass, "the centerpiece of its fraud." Corcoran's case was the Top Download for Courthouse News today and Friday.

The Health Savings Pass "includes long-term maintenance medications, which, in many instances, are prescribed to elderly and disabled patients on a regular basis," the complaint states.

Customers claim that by law the co-pay that CVS takes from insured customers "may not exceed CVS's usual and customary price, which is generally defined as the cash price to the general public for the same drug," but that a CVS co-pay often does exceed that customary price - and that CVS also bills the insurer for it.

The 48-count, 84-page lawsuit claims that CVS has overcharged insured customers "in many cases by more than three or four times the usual and customary price," since at least November 2008.

"CVS is a major pharmacy chain throughout the United States," plaintiffs' attorney Christopher Lebsock said. "Through this litigation our clients hope to ensure that CVS lives by its commitment to price drugs fairly to all of its customers. We look forward to presenting our claims to the court as soon as possible."

With 7,866 U.S. outlets, CVS is the nation's largest purchaser of drugs, according to the complaint. Half of the population are customers, and it fills or manages more than 1 billion prescriptions a year - nearly one-third of the prescriptions in the nation, the complaint states. It reported net revenue of $139.4 billion, $67 billion of it from its retail pharmacy business, the class claims.

The plaintiffs claim that CVS charges cash-paying customers less than it charges insured ones. They claim that CVS is required to disclose its regular prices for every transaction when it submits electronic claims to third-party payors, but it knowingly inflates these prices.

"By submitting false and inflated usual and customary prices to third-party payors, CVS knowingly and wrongfully overcharged plan participants co-pay amounts that often exceeded the HSP drug prices available to the general public for the same drugs," the complaint states. "In essence, the unlawful scheme that CVS designed allowed CVS to have its cake and eat it too: CVS could maintain and increase its cash-paying customer base while also maintaining higher reimbursement payments from third-party payors and higher co-pays from plan participants who filled their prescriptions at CVS pharmacies."

CVS did not respond to a request for comment.

Attorney Lebsock is with the Hausfeld firm in San Francisco.

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