Class-Action Suit Accuses CVS Of Overcharging Customers For Generic Drugs

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(Chris Rief)

The country’s second largest pharmacy chain is the latest party in a class-action lawsuit that accuses CVS of deliberately overcharging hundreds of thousands of patients for generic prescription drugs.

Bloomberg reports that the pharmacy customers claim in the class-action seeking lawsuit that CVS intentionally overcharged them for prescription drugs by submitting claims for payment to third parties at inflated prices.

According to the lawsuit, since 2008 CVS has engaged in “massive fraud” that led to “substantial ill-gotten gains” by charging three or four times the typical price for generic drugs.

At issue in the lawsuit is CVS’s Health Savings Pass, a discount program for patients paying cash for prescriptions. The plan costs $15 per year to join and offers 90-day supplies of some generic drugs for $11.99.

The complaint contends that patients who purchased prescriptions through third-party plans paid higher prices than those who paid through CVS’s program.

CVS allegedly failed to present insurance companies with the discounted price, resulting in customers paying higher co-pays based on the more expensive prices.

“Not only was the HSP program a means by which CVS could maintain and increase its market share by fending off discounted prices from its competitors, but importantly, CVS also intended that the HSP program would serve as a mechanism to hide CVS’s true usual and customary prices from third-party payers,” the lawsuit says.

A CVS spokesperson tells Bloomberg that he couldn’t comment on the lawsuit, as the company had yet to be served, but that a similar suit had been dismissed in Massachusetts.

“It is important to note that co-pays for prescription medications are determined by a patient’s prescription coverage plan, not by the pharmacy,” the spokesperson said. “Pharmacies charge the co-pays that are set by the coverage plans.”

The lawsuit seeks unspecified damages and a court order banning CVS from running the alleged scheme.

CVS Health Accused in Suit of Overcharging for Generic Drugs [Bloomberg]

by Ashlee Kieler via Consumerist