CVS In Legal Hot Water

Alleged Scheme to Defraud Pharmacy Consumers

It’s no secret that Big Pharma has been raking Americans over the coals by jacking up drug prices, but how far some will go came as a shock! A lawsuit was filed by Hausfeld Firm one week ago, against CVS Health Corp. Allegedly CVS Pharmacy has been submitting falsified claims to insurance companies with inflated prices since 2008. Kristen Broz, the attorney that filed the lawsuit for the 7 plaintiffs stated, “We’ve seen people who pay $20 for a 30-day supply as their copayments on a drug that was $11.99 for a 90-day supply had they been in CVS’s Health Savings Pass program” (Yahoo Health News). CVS’s Health Savings Pass program offers discounts on generic prescription medications to patients that don’t have insurance or decide not to use it to try and save more money. This program includes popular generic forms of Prozac and Penicillin. “Instead of presenting insurance companies with that discounted price, CVS reported the higher price that a normal retail customer not in the Health Savings Pass would pay” (Yahoo Health News).

On top of the higher payment they were receiving from insurance companies, CVS was also collecting higher copayments from patients for the higher price they were submitting to the insurance. This fraudulent program allowed CVS to increase its market share, fight off discount prices from competitors, and hide its usual prices from third-party payers. It is estimated that hundreds of thousands of people may have been scammed and affected by this scheme. These accusations echo the accusations made by David Morgan, a licensed pharmacist that accused CVS and other Big Pharma companies of pulling this scam in December of 2013. Unfortunately the case was dismissed, but it was alleged that these companies were submitting billions of these false claims as early as 2001 (Courthouse News Service).