CVS Faces Pricing Suit from BCBS and CareFirst

On Friday, a suit was filed by CareFirst of Maryland, Blue Cross Blue Shield of South Carolina, and and other affiliated organizations against CVS Health Corporation. The complaint, filed in the District of Rhode Island, alleged a systematic fraudulent scheme by CVS to provide incomplete pricing data and inflate the amounts paid by CareFirst in order to offset the amounts paid by patients not providing insurance information.

The insurance plaintiffs negotiated with CVS regarding payment of prescription drugs through entities known as Pharmacy Benefit Managers (PBMs). These PBMs obtained payment rates by reviewing the usual pricing rate offered by CVS for the prescription drugs and offering a set discount from those rates for their members. Therefore, any inflation of the usual pricing rate would result in a larger payment by the insurance company. The plaintiffs alleged that CVS offered a fictitious usual rate that was not in fact the usual rate, as all non insurance customers were in fact offered a lower, discounted rate through various CVS cash discount plans. The plaintiffs also alleged that CVS deliberately chose to conceal this pricing information from the PBMs by outsourcing and concealing the discount pricing plan via third parties.

The plaintiffs are alleging counts of fraud, fraudulent concealment, negligent misrepresentation, unjust enrichment, larceny by false pretenses, violation of the Maryland Consumer protection act, violation of the Virginia Consumer protection act, and violation of the South Carolina Unfair trade practices act. The plaintiffs are represented by Partridge Snow & Hahn and Stein Mitchell Beato & Missner.