Milwaukee-based Froedtert Memorial Lutheran Hospital sued CVS Health Aug. 20 alleging the company and its subsidiaries diverted about $18 million in 340B drug pricing savings from the hospital between 2020 and 2025.
The complaint, filed in U.S. District Court for the Eastern District of Wisconsin, names CVS Health, CaremarkPCS Health, Caremark (doing business as CVS Specialty) and WellPartner as defendants. Froedtert alleges CaremarkPCS adjudicated 340B-eligible specialty drug claims at standard network reimbursement rates, then artificially lowered the reimbursement once WellPartner flagged the claims as 340B-eligible, retaining the difference as profit. The hospital says CVS and its affiliates kept about 62% of the 340B savings at issue, while Froedtert received about 38%.
Froedtert also alleges CVS refused a March 2, 2026 audit request and terminated the hospital’s pharmacy services agreements in what the complaint calls retaliation. The lawsuit brings claims for breach of contract, fraud, violations of the Wisconsin Deceptive Trade Practices Act and civil RICO, and seeks treble damages, reinstatement of the terminated agreements and disgorgement of CVS’s profits.
Froedtert is the latest health system to accuse CVS of running the same reimbursement scheme. New York City-based Mount Sinai Health System, Michigan Medicine and the University of Kansas Health System filed similar lawsuits in May, alleging a combined $250 million in diverted 340B savings, and Henry Ford Health sued CVS in July over more than $29 million in alleged losses.
Becker’s has reached out to CVS for comment and will update this story if more information becomes available.
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