Independent Pharmacy Files Lawsuit Against CVS Health, Caremark, Aetna Based on DIR Fees

Osterhaus Pharmacy Inc has filed a class action lawsuit against CVS Health, Caremark, and Aetna, seeking damages for violating federal antitrust laws and state laws that govern contracts.^1,2

Image credit: Pakhnyushchyy | stock.adobe.com

According a statement by the National Community Pharmacists Association (NCPA), the action was sent into motion by wrongful penalties for Medicare Part D prescriptions, called pharmacy direct and indirect remuneration (DIR) fees.² Berger Montague and Cohen & Gresser announced the lawsuit yesterday.²

“Finally, community pharmacies have a chance to recover DIR fees that were unfairly taken. [Pharmacy benefit mangers (PBMs)] have been gaming the system for a long time, and it’s time to turn the tables,” Douglas Hoey, the CEO of NCPA, said in a statement.²

According to the legal action, Osterhaus Pharmacy is bringing 5 claims against the entities: 1.) “a tying claim under federal antitrust law;” 2.) “breach of covenant of good faith and fair dealing;” 3.) “declaratory judgment that the DIR fees that CVS Caremark imposed are unconscionable;” 4.) “unjust enrichment;” and 5.) “quantum meruit.”¹

In 2021, an arbitrator awarded $23 million to the AIDS Healthcare Foundation, finding that Caremark breached covenant of good faith and fairness by implementing DIR fees, according to the NCPA statement. Further, in 2022, an arbitrator awarded $2.1 million in wrongfully collected fees and $1.5 million in attorney and interest due to Caremark’s contract being unconscionable, according to the ruling.²

As written in the legal action, Osterhaus Pharmacy brings this lawsuit on behalf of itself and other pharmacies that are not part of the 3 biggest PBM entities and are considered independent of the PBMs, are located in the United States, and paid any DIR fees directly to CVS Caremark from September 26, 2019, until the time of the trial.¹

“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,” Hoey said in the statement. “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.”²

NCPA has applauded the class action lawsuit, further showcasing their support for independent pharmacies. The organization will have lawyers from Berger Montague, Cohen & Gresser, and another law firm leading actions against PBMs and DIR fees at the NCPA annual convention, according to Hoey.² The convention will take place in Orlando, Florida, from October 14, 2023, to October 17, 2023.²

“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,” Hoey said in the statement.²

References

1. Osterhaus Pharmacy INC and all similarly situated v. CVS Health Corporation, CVS Pharmacy Inc, Caremark PCS LLC, Caremark LLC, Caremark PCS Health LLC, Caremark IPA LLC, Caremark Part D Services LLC, Aetna INC, Aetna Health Holdings LLC, and Aetna Health Management LLC. 2:23-cv-01500, 2023.
2. Payback time! Community pharmacists cheer class action lawsuit against PBMs to recoup DIR fees. News release. National Community Pharmacists Association. September 27, 2023. Accessed September 27, 2023. https://www.globenewswire.com/news-release/2023/09/27/2750402/0/en/Payback-Time-Community-Pharmacists-Cheer-Class-Action-Lawsuit-Against-PBMs-to-Recoup-DIR-Fees.html#:~:text=%E2%80%9CIt's%20payback%20time%2C%E2%80%9D%20said,time%20to%20turn%20the%20tables.%E2%80%9D