Berger Montague Files an Antitrust Lawsuit Against Largest PBM CVS Caremark for Wrongfully Collected Medicare Part D Fees

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Sep 29, 2023, 14:27 ET

The Lawsuit, Which Was Filed Alongside Co-Counsel Cohen & Gresser and Local Counsel Terrell Marshal Law Group PLLC, Alleges CVS Caremark Exploited a Medicare Loophole to Increase Fees

PHILADELPHIA, Sept. 29, 2023 /PRNewswire/ -- Complex litigation powerhouse Berger Montague announces that it filed a lawsuit against CVS Caremark LLC, the largest pharmacy benefit manager in the country, alleging that it wrongfully increased and collected Medicare Part D fees. The lawsuit was on behalf of Osterhaus Pharmacy seeking to represent a proposed class of independent pharmacies. It aims to recoup hundreds of millions of dollars in wrongful pharmacy DIR fees.

The complaint alleges that CVS Caremark, a subsidiary of CVS Health, violated federal antitrust laws and state laws governing contracts by unlawfully purporting to use a loophole in Medicare regulations to impose fees on pharmacies called "DIR fees." CVS Caremark uses the fees to force independent pharmacies to pay to provide certain "performance-related" services on unreasonable terms. The DIR fees also hurt Medicare patients by forcing them to pay more for their prescriptions.

DIR fees grew more than 1,000 times larger between 2010 and 2020. The National Community Pharmacists Association reports that independent pharmacies are forced to pay hundreds of thousands or millions of dollars a year in DIR fees.

The complaint further alleges that pharmacies would not rationally choose to pay to provide services. However, CVS Caremark, as the largest PBM, has used its size to force independent pharmacies to agree to do so.

In addition, the lawsuit claims that CVS Caremark's agreements contain forced arbitration clauses that are unfair and unenforceable.

The complaint was filed in the Western District of Washington by Berger Montague, co-counsel Cohen & Gresser, and local counsel Terrell Marshal Law Group PLLC. Shareholder Joshua P. Davis is leading the case for Berger Montague. To learn more, visit www.bergermontague.com/cases/cvs-caremark/.

Berger Montague PC is a full-spectrum plaintiffs' law firm that litigates complex civil cases and class actions in federal and state courts throughout the United States and Canada. For more than 53 years, Berger Montague has played lead roles in consequential, precedent-setting cases and has recovered more than $50 billion for its clients and the classes they have represented. A pioneer in the use of class actions in antitrust and securities litigation, the firm has since expanded into consumer, employment, environmental, and insurance litigation. Today, Berger Montague has more than 90 lawyers across eight offices, including its headquarters in Philadelphia, as well as offices in Minneapolis, San Diego, San Francisco, Washington, D.C., Chicago, Wilmington, Delaware, and Toronto, Canada.