A newly unsealed whistleblower lawsuit claims that CVS Health subsidiaries coordinated to prevent members from accessing generic drugs to boost profits.
Alexandra Miller, who worked for CVS for several decades said the company calculated that the benefits of the alleged scheme outweighed the likelihood of getting caught. She claims that CVS’ SilverScripts Part D subsidiary as well as its Caremark pharmacy benefit manager and retail pharmacies worked together to prevent access to generics, which allowed it to pocket higher rebates because members were pushed to buy branded medications rather than lower-cost options.
In addition, members were not told about potential authorized generic medications or identical drugs produced by the same manufacturer but offered at a lower cost.
According to the lawsuit, the company violated Medicare regulations by failing to disclose this formulary distinction and felt that SilverScripts Part D customers were less likely to complain about the potential costs because many receive subsidies to cover their medications.
The lawsuit was made public as policymakers put the pharmacy supply chain and pharmacy benefit managers in particular, under the microscope. The Federal Trade Commission said last week that it would dig into the business practices of six major Parmacy Benefit Managers (PBMs), including Caremark, as the industry becomes increasingly consolidated.
The PBM market is dominated by three companies, all of which are also integrated with a major health plan and other industry segments: Caremark, a sister company to Aetna; Express Scripts, which is owned by Cigna; and OptumRx, which is a sister company to UnitedHealthcare.
A recent Supreme Court decision granted states greater power to regulate PBMs, and with that have come multiple investigations into their role in Medicaid, including millions in settlements paid out by Centene in six states.