SAN FRANCISCO (CN) — A federal judge ruled Friday morning that CVS acted with deliberate indifference and violated patient rights under the Affordable Care Act.when it required people living with HIV/AIDS to receive their medication only at in-network CVS Caremark pharmacies.
A group of HIV-positive plaintiffs filed a class action against CVS and its subsidiaries in federal court in 2018, claiming that the company’s pharmacy insurance plan violated their rights by forcing them to purchase HIV/AIDS medication only through CVS stores. All of them had a connection to CVS through either their own insurance plans or those of their spouses.
By forcing patients to purchase their medications through public CVS pharmacies, the plaintiffs said the company reduced the quality of prescription drug care and violated their privacy rights. They also claimed that the program is inefficient, with some plaintiffs forced to drive miles out of their way to get to in-network pharmacies and others reporting concerns of mail-ordered drugs being stolen or damaged.
The plaintiffs said they’ve been forced to stick with the program because they can’t afford out-of-pocket expenses for their medications. When asked if they could opt-out of the CVS Caremark program, they were either denied or ignored, according to the complaint.
The plaintiffs claimed that CVS involvement is integral to the design of the health plans and that the company was aware of the plaintiffs’ problems with the plan but was nonetheless indifferent. The case was previously dismissed in federal court, but the Ninth Circuit Court of Appeals remanded it after finding that the plaintiffs stated viable claims of disability discrimination under the Affordable Care Act.
Senior U.S. District Judge Edward Chen, an Obama appointee, wrote in his 24-page ruling that CVS acted with deliberate indifference and violated the Affordable Care Act because it was aware of complaints and knew that its actions were a violation of a federally protected right.
“That defendants were on notice of the need to accommodate patients in need of HIV/AIDS medication is additionally supported by federal regulations, which warned that mail-order programs are potentially discriminatory,” Chen wrote.
CVS argued that it was impossible for them to know that the mail-order requirements were likely to violate anyone’s civil rights and moved to dismiss the case.
Chen countered that the company's argument here were contradicted by its own metrics.
“Defendants’ knowledge of a likely violation of federally protected rights in the absence of reasonable accommodation is further supported by defendants’ internal data, which indicated that they knew the program negatively affected people with HIV’s equal access right to prescription drug benefits,” Chen wrote. “Internal studies and survey data showed their mail-order program would lead to limited access to benefits, specifically ‘that the design of the program was suboptimal for HIV/AIDS medications and likely discriminatory against people living with HIV.’”
The plaintiffs also brought proxy discrimination claims against CVS. Those claims were tossed by Chen because CVS’ program encompasses over 400 drugs, most of which are not related to HIV/AIDS treatment. Thus, he reasoned, there was not a close enough association to prove discrimination against people living with HIV/AIDS.
“No sufficient fit exists to draw the discriminatory inference,” Chen wrote.
Unfair competition law claims were also tossed by Chen, because the plaintiffs did not claim they paid any money directly to CVS.
“The alleged higher out-of-pocket prices that plaintiffs paid are only in the possession of in-network community pharmacies, not defendants themselves," Chen wrote. "Plaintiffs do not contest this point."
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