CVS & Walgreens Generic Drug Overcharge Lawsuit Investigation

Drugs Which Pharmacies May Have Overcharged For

Two lawsuits filed on August 7, 2017 against CVS and Walgreens alleges that the pharmacy companies overcharged insured customers for the following drugs:

Lawsuits Allege Benefits Providers Received Kickbacks

The two lawsuits against CVS and Walgreens allege that the pharmacies overcharge insured customers for generic medication because they are required to pay a kickback to Pharmacy Benefits Providers (PBMs), who act as an intermediary between the pharmacies and insurance companies. The complaints allege that CVS and Walgreens have “secret, undisclosed written contracts” with the PBMs providing a kickback (or “clawback”) on the sale of certain medications, if the customer goes through insurance. The largest PBMs are Express Scripts, CVS Caremark, and OptumRx. The complaints say that in many of CVS’s and Walgreens’s agreements with the PBMs, “CVS pledges” and “Walgreens pledges” to “not inform clients that they could pay less if they did not use their insurance plans.”

Patients who have a deductible for the prescription drugs are at risk for having overpaid, the plaintiffs allege. For example, the plaintiff in the CVS case alleged that she had gone through insurance and paid $165.68 for a drug for which CVS only charged $92 out-of-pocket. The plaintiff against Walgreens says that he went through insurance and paid $21.80 for a drug for which Walgreens only charges $10 out-of-pocket.

The lawsuits also say that patients who paid a co-pay for their generic drugs, even a co-pay as low as $10, may have overpaid. For example, the complaint shows a patient with United Healthcare was charged a co-pay of $10 for Lisinopril, but the pharmacy only received $7.23 and paid a “clawback” to the PBM of $2.77. Paying for the Lisinopril out of pocket may have been cheaper.

Pharmacists have acknowledged these practices, say plaintiffs. Pharmacists have said:

• “[PBM] charging a patient $125 for a generic drug and take back $65 from the pharmacy. If paid cash the cost to the patient would have been $55.”
• “A patient copay is over $50 and the claw back is over $30 all for a drug where our cash price would only be $15.”

NY Dept. of Health: Insured Customers Who Paid $15 or More for Generics May Have Overpaid

According to statistics from the New York Department of Health showing CVS’s retail drug prices, customers with co-pays as low as $15 may have overpaid. For example, the retail price for Levothyroxine is listed as $11.99 for most CVS locations. Anyone who went through insurance and paid $15 or more as a co-pay or as part of a deductible may have gotten Levothyroxine for cheaper had they paid out-of-pocket and not gone through insurance.

A chart is below showing the ten most prescribed generic drugs and their CVS retail prices, according to the New York Department of Health website. If you went through insurance and paid more to CVS than the prices listed in the right-hand column, you may have overpaid.

1. Source: IMS Health
2. New York Department of Health, Prescription Drug Prices in New York State, available at https://apps.health.ny.gov/pdpw/SearchDrugs/Home.action. (Searches done for Manhattan area. Where prices differed by location, lowest price is displayed).

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