CVS Health has moved to dismiss lawsuits brought by hospital systems in New York and Michigan alleging the company diverted 340B Drug Pricing Program savings.
CVS argued in a July 22 Eastern District of Michigan filing that University of Michigan Hospitals and Health Centers’ lawsuit is a contract dispute, not a 340B policy matter, saying the hospital never identified which contract language Caremark allegedly violated. CVS also called the fraud, unjust enrichment and tortious interference claims duplicative of that contract dispute, and asked the court to dismiss CVS Health Corp. entirely as a holding company with no employees or operations tied to the alleged conduct.
CVS filed a similar motion the same day in the U.S. District Court for the Southern District of New York, seeking permanent dismissal of the amended complaint from Mount Sinai Hospital, Mount Sinai Beth Israel and St. Luke’s-Roosevelt Hospital on grounds that the claims are too vague, aren’t pleaded with enough specificity, and fail to state a legal claim even if the allegations are true.
The hospitals’ lawsuits, filed in May, allege CVS and its affiliates diverted about $250 million combined in 340B savings from Mount Sinai, Michigan Medicine and the University of Kansas Health System between 2020 and 2025. The health systems claim CVS initially processed 340B specialty drug claims at standard network reimbursement rates, then later paid a reduced rate once WellPartner identified the claims as 340B-eligible — retaining the difference as profit rather than passing it through to the hospitals, as their agreements required. CVS has said it does not comment on pending litigation.
At the Becker's 11th Annual IT + Revenue Cycle Conference: The Future of AI & Digital Health, taking place September 14–17 in Chicago, healthcare executives and digital leaders from across the country will come together to explore how AI, interoperability, cybersecurity, and revenue cycle innovation are transforming care delivery, strengthening financial performance, and driving the next era of digital health. Apply for complimentary registration now.