Rite Aid Discount Dispute (Mostly) Survives Dismissal before Del. Court

A Delaware Superior Court judge partially dismissed an action Friday in a case that alleged that defendant Rite-Aid defrauded the plaintiff health insurers by misrepresenting the prices it charged its customers for drugs, thus causing the plaintiffs to pay Rite-Aid greater sums than what they would have been entitled to under agreements between the parties.

According to the opinion, the complaint, filed by a group of “health insurance and pharmacy benefit companies” known as the Centene Entities, alleged that Rite Aid declined to report discounts offered to customers through its Rx Savings Card program; they accused the defendant of using the card, which does not have fees or other membership obligations, to effectively reduce its prices.

The plaintiff alleged breach of contract and fraud as a result of the purported scheme; the breach of contract claims survived dismissal, but the fraud claims were dismissed because the plaintiffs failed to “plead injury from the fraud separate from its breach-of-contract claims.” While the court did not rule on the merits of the breach of contract claims directly, it rejected Rite Aid’s contention that the RX Savings Card program could not be considered a discount program under the contracts between the parties. It did not make a final determination, but held that the plaintiffs “plausibly allege that the RSC is not founded on any consideration, and is indeed a discount program.”

The court also dismissed Rite Aid’s contention that the plaintiff’s suit ran afoul of the statute of limitations.

Rite Aid is represented by Shook, Hardy & Bacon as well as Prickett, Jones & Elliott. The plaintiffs are represented by Morris, Nichols, Arsht & Tunnell, and Crowell & Moring.