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ALEXANDRIA, Va. – The National Community Pharmacists Association loudly applauded a class action lawsuit filed against vertically conslidated CVS Health, Caremark, and Aetna that aims to recoup for independent pharmacies millions of dollars in what the lawyers say are wrongful back-end penalties for Medicare Part D prescriptions, otherwise known as pharmacy direct and indirect remuneration fees.
“It’s payback time,” said NCPA CEO B. Douglas Hoey. “Finally, community pharmacies have a chance to recover DIR fees that were unfairly taken. PBMs have been gaming the system for a long time, and it’s time to turn the tables.”
The lawsuit, announced today by the law firms Berger Montague PC and Cohen & Gresser LLP, claims that Caremark – the largest pharmacy benefit manager in the country and a subsidiary of Fortune 6 corporation CVS Health – has been assessing pharmacy DIR fees in violation of federal antitrust laws and state laws governing contracts. The lawsuit also challenges Caremark’s agreements to arbitrate claims as being unfair and unenforceable.
In 2021, an arbitrator awarded a judgment of $23 million to the AIDS Healthcare Foundation, finding that Caremark breached the covenant of good faith and fairness in implementing its DIR practices. A district court in Arizona confirmed the award in 2022.
In 2022, an arbitrator awarded a judgment of $2.1 million in wrongfully collected fees, plus an additional $1.5 million in attorneys and interest, because Caremark’s contract was unconscionable. A district court confirmed the award in 2023.
Despite these two awards, Caremark has done nothing to change its ways, other than to modify its dispute resolution processes to make it more expensive and more difficult for pharmacies to bring claims against them.
“These are only the arbitrations that we know about,” said Hoey. “The arbitration process keeps these cases secret. That allows Caremark and the other PBMs to continue to treat pharmacies unfairly and illegally extract junk fees. We are hoping this lawsuit helps to bring these unlawful practices into public view.”
Hoey noted that DIR fees have risen by more than 107,400 percent in recent years, a trend that is driving many community pharmacies to the brink of insolvency.
“It’s very common for individual pharmacies to pay hundreds of thousands of dollars a year in fees that they can’t possibly anticipate, and in many cases long after the point of sale,” he said. “Moreover, those fees do nothing more than line the pockets of PBMs like Caremark. It’s a mafia-style shakedown. We’re thrilled that community pharmacists have a chance to recoup some of their money.”
NCPA will be doing more than cheerleading for the lawsuit, said Hoey. “We have worked with these law firms and several others for over a year to educate them on the anticompetitive behaviors of PBMs, including CVS Caremark. Now, we’ll focus on educating our members about the suit and other ways they can recoup the fees that were taken from them wrongfully. In fact, lawyers from Berger Montague, Cohen & Gresser and another firm leading the cause will brief NCPA members at the organization’s annual convention in Orlando, October 14-17.”
“We’ve been fighting the PBMs on behalf of our members on Capitol Hill, in the agencies, and in the courts for decades. We’ve made a lot of progress on all those fronts. But this is a fight directly benefiting our members and a way to potentially get back some of the billions of dollars in fees wrongfully taken by the PBMs.”
