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Independent Pharmacies Seek Court Unification in Fight Over Generic Drug Payments

By  |  December 2, 2024

Two independent pharmacies have requested the centralization of several class action lawsuits in Rhode Island federal court, alleging that drug coupon aggregator GoodRx and multiple pharmacy benefit managers (PBMs) conspired to undermine small pharmacies. According to Reuters, the lawsuits claim that the defendants engaged in practices designed to deprive independent pharmacies of fair reimbursements for generic medications.

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    In a motion filed Tuesday with the U.S. Judicial Panel on Multidistrict Litigation, Old Baltimore Pike Apothecary, based in Pennsylvania, and Smith’s Pharmacy argued that Providence, Rhode Island, would serve as an ideal venue. The motion cites the location of CVS Caremark’s headquarters in the city, its manageable court docket, and its accessibility via various transportation options.

    The core allegations involve GoodRx, CVS Caremark, Cigna’s Express Scripts, Navitus Health Solutions, and MedImpact Healthcare Systems. These companies are accused of collectively working to reduce reimbursement rates for generic drugs, effectively disadvantaging small pharmacies. Reuters noted that one of the lawsuits central to the motion was filed by the two pharmacies in Rhode Island federal court, while three related lawsuits are currently pending in federal court in Los Angeles, California, near GoodRx’s headquarters in Santa Monica.

    If approved, the cases would be transferred to Rhode Island as part of a newly created multidistrict litigation for pretrial proceedings. On the same day the motion was filed, attorneys representing the pharmacies launched a new class action lawsuit in Rhode Island federal court on behalf of Hunnington Pharmacy in Alabama. However, that particular lawsuit is not included in the consolidation request.

    Responding to the allegations, CVS Caremark spokesperson Phillip Blando defended the company, stating, “In nearly all cases, CVS Caremark reimburses independent pharmacies at higher levels than chain drugstores, including CVS pharmacies.” He dismissed the lawsuits as meritless and promised a vigorous defense.

    Other defendants, including Navitus and attorneys for one of the California plaintiffs, declined to comment, while some other parties involved did not immediately respond to inquiries, according to Reuters.

    PBMs play a pivotal role in the pharmaceutical industry, negotiating drug prices with insurers, pharmacies, and manufacturers. They are also responsible for reimbursing pharmacies for medications and providing discount cards often used by uninsured individuals to reduce out-of-pocket costs.

    Source: Reuters