CVS, Walgreens sued for overcharging pharmacy customers

By Eric DuVall   |   Aug. 10, 2017 at 12:13 PM
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Aug. 10 (UPI) -- CVS and Walgreens, the two largest U.S. drugstore chains, face lawsuits for allegedly inflating the price of generic prescription drugs sold to customers.

The issue in both cases arose when the cost of generic drugs for people paying with help from health insurance exceeded what it would have cost for them to pay out of pocket. In both cases, the plaintiffs said the pharmacies did not make them aware the cost of the drug with their insurance was higher than if they had simply paid for the pills.

The anomaly happens because pharmacies use intermediaries, known as pharmacy benefit managers, to determine which pharmacies are considered in-network for which health insurance companies and how much common drugs will cost. Sometimes that amount exceeds the cost of a generic drug on the open market. In other instances, the drug costs less than a person's copayment, but the lawsuits allege the stores do not tell people when that's the case and frequently charge them the higher amount.

In the CVS suit, plaintiff Megan Schultz paid $165.68 for a prescription that only would have cost $92 out of pocket. She said CVS, the nation's largest drugstore chain, never told her there was a cheaper option.

"CVS never told her that paying in cash would allow her to pay 45% less for the drug; instead, CVS remained silent and took her money -- knowing full well that no reasonable consumer would make such a choice," the lawsuit states.

The Walgreens suit alleged a customer paid $22 using his health insurance for a prescription that would have cost him $10 in cash.

Both suits are class actions.

"The complaint lacks merit and we will vigorously defend against the allegations," a Walgreens spokesman told Bloomberg. CVS said the allegations were "baseless" and "built on a false premise."

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