Attorneys general from Connecticut, Indiana, Oklahoma, and Massachusetts have jointly filed a lawsuit against CVS Health, accusing the pharmacy giant of defrauding state Medicaid programs by failing to report discounted drug prices available to the general public, according to a report by Fierce Healthcare.
The states allege that since 2016, CVS has omitted its “usual and customary” prices, the rates offered to most customers, when submitting prescription drug claims to Medicaid.
As a result, they argue, Medicaid programs paid CVS more than other health plans for the same medications.
At the centre of the case is CVS’s use of third-party discount programs operated through MedImpact’s ScriptSave, which served as a vendor and administrator for the transactions.
The lawsuit claims that CVS, not ScriptSave, was ultimately responsible for offering these discounted prices.
“CVS worked strategically with ScriptSave to set pricing, and thus CVS (and not ScriptSave) was the party offering these discounts to the general public,” the lawsuit claims.
CVS has rejected the claims, issuing a statement to Fierce Healthcare asserting that it has already prevailed in similar cases. “The four states involved in this lawsuit have never issued guidance to pharmacies contending that third-party discount card prices constitute a pharmacy’s Usual & Customary prices,” a spokesperson said.
The case follows similar legal action in recent years. In 2020, Blue Cross insurers sued CVS, claiming it charged consumers lower prices through discount schemes while billing health plans more for the same generic medications.
CVS’s Health Savings Pass program, one of its well-known discount offerings, was first launched in November 2008. The current suit suggests the company used such programs to undercut retail prices, all while Medicaid continued reimbursing at inflated rates.
This lawsuit adds to growing scrutiny of drug pricing practices across the US healthcare system, as state and federal officials look more closely at how retail pharmacies manage pricing transparency and reimbursement claims.
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