CVS Sued For Violating Antitrust Laws In New York: AG James's Office

NEW YORK — CVS Pharmacy is being sued by the state Attorney General for violating antitrust laws in New York and diverting millions of dollars away from healthcare providers in low-income communities, Tish James' office announced Thursday.

The pharmacy chain forced "safety net" hospitals — those required by law to provide care to the uninsured — to exclusively use a CVS-partnered administrative service Wellpartner to process certain claims, according to the Attorney General's office.

This "scheme" forced those hospitals to incur millions in extra costs which ultimately ended up up in CVS's cash drawers, James contends.

“While safety net health care providers are tackling public health crises and helping underserved communities, CVS is robbing them out of millions of desperately needed funds that could improve patient care,” said James.

“When powerful corporations undermine the health and wellbeing of vulnerable communities in New York, they can expect to hear from my office.”

A CVS spokesperson told Patch the corporation plans to defend itself against the state's accusations, which he said were without merit.

“We continue to be a partner to the State of New York in delivering a number of important healthcare solutions to the people of New York," spokesperson Phil Blando said.

"[This was] recently demonstrated by our sustained, robust efforts to ensure access to COVID testing and vaccinations across the state."

As far as Wellpartner, Blando said New York companies that participated in the program benefitted from the federal 340B contract (the Medicaid outpatient discounted drug program) with CVS pharmacies.

The program delivered about $200 million in savings to New York providers enrolled in the program, Blando contends.

“Through our efforts, we’ve also expanded the number of available pharmacies that participate, creating greater access to New York patients being served including underserved populations.”

James is seeking injunctive relief, equitable monetary relief for the lost revenue and additional costs safety net health care providers were forced to incur, and civil penalties for CVS Health’s — CVS Pharmacy’s parent company — alleged unfair and illegal business practices, said her office.

In addition to recouping funds, James wants CVS to notify all safety net health providers across the state that they are not required to use only Wellpartner to process the subsidy claims, her office added.

“CVS’s actions are a clear example of a large corporation using its clout and power to take advantage of institutions and vulnerable New Yorkers, but my office will not allow it," James said.

“We are taking action to stop CVS’s harmful practices and recoup critical funds to improve health care for our communities.”