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New York Sues CVS for Interfering with 340B Provider Discounts

The New York state attorney general sued CVS Health Corporation for violating antitrust laws and interfering with the ability of covered entities in the 340B Drug Pricing Program to receive 340B discounts. The lawsuit alleges that, since acquiring third party administrator (TPA) Wellpartner in 2017, CVS required covered entities in New York to use Wellpartner as their designated TPA. CVS did not contract with covered entities that used a TPA other than Wellpartner, according to the complaint. Covered entities use TPAs to help administer their 340B retail pharmacy operations by determining patient eligibility for 340B discounts, ensuring program compliance, and overseeing inventory management and replenishment.

The lawsuit alleges that, by being forced to use Wellpartner, covered entities incurred significant additional costs related to hiring and training staff and updating their data systems to be compatible with Wellpartner’s technology. Moreover, by not contracting with covered entities that refused to use Wellpartner as their TPA, CVS caused these covered entities to forgo 340B discounts that would have been available through CVS’ New York pharmacies. The lawsuit alleges that, in doing so, CVS undermined the goal of the 340B program and harmed safety net providers. The lawsuit requests that the court issue an injunction to stop CVS’ actions, provide monetary relief to health care providers for the additional costs incurred and lost 340B savings, and impose civil penalties on CVS.

Contact Senior Director of Policy Erin O’Malley at eomalley@essentialhospitals.org or 202.585.0127 with questions.

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About the Author

Shahid Zaman is a senior policy analyst at America's Essential Hospitals.

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