Four states have joined a federal whistleblower lawsuit against CVS Pharmacy, alleging the company of overbilling state Medicaid programs for prescription drugs.
Attorneys general from Connecticut, Massachusetts, Indiana and Oklahoma are participating in the suit, which was originally filed in 2016 and unsealed May 7.
The states claim that CVS Pharmacy failed to report lower drug prices offered to cash-paying customers through a discount program run by a third party, violating state regulations that require pharmacies to offer Medicaid their lowest discount program price.
“When pharmacies offer discounted drug pricing to its customers, they must also charge MassHealth that same low price,” Massachusetts Attorney General Andrea Joy Campbell said in a May 7 news release. “At a time when costs are sky-high, our taxpayers should not have to foot the bill for pharmacies’ inaccurate price reporting.”
CVS strongly disputed the claims in a May 8 statement to Becker’s.
“We’ve always been transparent with Medicaid programs concerning the prices we were submitting,” a CVS spokesperson said. “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.”
This is not the first time CVS or other pharmacy chains have faced legal scrutiny over Medicaid drug pricing. Centene has paid $1.25 billion to settle similar allegations with more than 20 states.
The CVS spokesperson said the company has a strong track record in similar cases.
“In the cases involving CVS, we’ve prevailed many times, including by dismissal of the plaintiff’s allegations by the court and by verdicts from juries or final awards by arbitrators,” the spokesperson said.
