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NY State sues CVS Health over antitrust violations that allegedly cost providers millions

by John R. Fischer, Senior Reporter | August 05, 2022
Business Affairs
CVS Health Corporation allegedly pressured providers to contract with Wellpartner to be reimbursed for pharmaceuticals under the 340B program.
New York State is taking CVS Health Corporation to court for allegedly violating antitrust laws by pressuring safety net hospitals to contract with a specific third-party pharmaceutical administrator.

New York Attorney General Letitia James says that CVS required healthcare facilities to only use its TPA, Wellpartner, to be reimbursed through the 340B federal program for prescriptions filled by its pharmacies. Under the program, healthcare providers can purchase certain drugs at a discount from pharmaceutical companies and invest the savings in patient care.

Safety net hospitals and clinics must contract with pharmacies used by their patients in order to receive these benefits. Often, they use a TPA to administer their 340B programs and oversee record keeping and ensure the provider adheres to guidelines.

By constricting access to Wellpartner, CVS forced practices to spend millions to hire and train staff and change their data systems to align with Wellpartner’s system. Those that refused were unable to claim benefits to which they were otherwise entitled under the program.

“CVS’ 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,” said James.

CVS acquired Wellpartner in 2017 and began requiring New York hospitals to use it over other TPAs, and would not contract with hospitals that did not. Without a contract, these hospitals and clinics were unable to collect 340B funds.

Many providers switched to Wellpartner, because it was not practical or economical to pay for two TPAs. CVS also knew the program prohibited hospitals from encouraging patients to stop going to certain pharmacies, making it more difficult for them to resist switching.

These business practices cost safety net providers critical federal funding that could have been used to improve access to healthcare for those most in need, including New Yorkers without health insurance or the ability to pay for healthcare, says James.

She and her office are seeking injunctive relief, equitable monetary relief for lost revenue and additional costs that safety net healthcare providers incurred, as well as civil penalties for CVS’ illegal business practices. She also wants CVS to inform all safety net hospitals that they do not need to exclusively use Wellpartner.

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