New York prosecutors on Thursday accused CVS of diverting millions of dollars from low-income and medically underserved communities in New York as part of a scheme that violated antitrust laws.
The lawsuit alleged pharmacy giant CVS illegally required New York safety net hospitals and clinics to exclusively use a CVS-owned company, Wellpartner, to process and obtain federal subsidies on prescriptions filled at CVS pharmacies.
CVS’s alleged scheme forced safety net health care providers to incur millions of dollars in additional costs, while CVS continued to benefit through its subsidiary, New York Attorney General Letitia James said in a statement Thursday.
“While safety net health care providers are tackling public health crises and helping underserved communities, CVS is robbing them out of millions of desperately needed funds that could improve patient care,” James said.
“CVS’s actions are a clear example of a large corporation using its clout and power to take advantage of institutions and vulnerable New Yorkers, but my office will not allow it,” she added.
CVS issued a statement Thursday saying the “allegations are without merit and we will defend ourselves vigorously.”
“We continue to be a partner to the State of New York in delivering a number of important healthcare solutions to the people of New York, as recently demonstrated by our sustained, robust efforts to ensure access to COVID testing and vaccinations across the state,” the company added.
What the NY CVS lawsuit says
The lawsuit is seeking to end CVS’s alleged illegal practices and to recoup lost revenue for impacted safety net hospitals and clinics that would improve health care services, James said in a statement.
The lawsuit did not specify exactly how much lost revenue could be recouped, but some elements of the allegations offered hints.
For example, Wellpartner expected various aspects of the plan “to generate an ‘incremental revenue opportunity’ of $568 million related to CVS Wellpartner retail pharmacy sales and $1.37 billion related to CVS specialty pharmacy sales,” the lawsuit stated.
The lawsuit asserted CVS did not allow New York safety net hospitals and clinics to use the company of their choice to obtain subsidies on prescriptions filled at CVS pharmacies through the 340B federal program.
The program allows safety net hospitals and clinics to purchase certain drugs at a discount from pharmaceutical companies and use the savings for patient care.
Under the alleged CVS scheme, thousands of safety net health care providers across the state were only allowed to use Wellpartner to process claims filled at CVS retail and specialty pharmacies, forcing them to incur millions of dollars in additional costs to hire and train staff and change their data systems to align with Wellpartner’s system, James stated.
James asserted New York patients were the ultimate victims of CVS’s practice, which siphoned off critical federal funding from safety net health care providers. The providers could have used the funds to improve access to health care for the neediest New Yorkers − including New Yorkers without health insurance or an ability to pay for health care, she added.
CVS asserted New York’s providers “enjoy a highly competitive retail pharmacy marketplace when choosing 340B contract pharmacies.”
The company added its integrated 340B offering helps vulnerable populations by providing additional, convenient retail pharmacy locations dispensing discounted prescriptions to patients.
CVS Health’s participation in the 340B program delivered about $2.2 billion in savings to 340B providers in 2021, and over $200 million in New York, more than doubling the savings offered in 2017, the company added.
“Through our efforts, we’ve also expanded the number of available pharmacies that participate, creating greater access to New York patients being served including underserved populations,” CVS stated.