Law firm drops suit alleging CVS gouged generic consumers, plans to refile

After making a series of allegations that pharmacy giant CVS was gouging generic drug consumers who paid with insurance, the plaintiff in a proposed class action lawsuit dropped her claims.

In the suit, plaintiff Megan Schulz alleged she paid more through insurance to get a generic drug than if she’d just paid cash. The suit also alleged pharmacy "copays" were really payments to pharmacy benefit managers, set up by confidential deals. CVS refuted the allegations and said in a statement Friday that it’s pleased the suit has been dismissed.

After seeing the lawsuit, CVS got in touch with the law firm about "numerous factual misstatements that, when corrected, make it clear that the plaintiff named in the suit was not overcharged for her prescriptions," a spokesperson told FiercePharma.

"The complaint contained numerous demonstrably false assertions that a reasonable pre-filing investigation by the law firm would have discovered," CVS’s spokesperson said via email on Friday. "As such, we are pleased that the suit has been voluntarily dismissed."

The firm that represented the plaintiffs, Hagens Berman, isn't walking away from the allegations altogether, though.

"We plan to refile the lawsuit against CVS related to its generic drug pricing scheme promptly," managing partner Steve Berman said in a statement on Monday. "Our case against Walgreens was not dismissed and will remain on file until we achieve a just outcome for consumers."

The lawsuits made major waves earlier this month, garnering coverage in dozens of publications and spreading rapidly on social media. Shortly after filing the CVS claim, Hagens Berman followed up with another against one of CVS’s peers, Walgreens.

The lawsuits came as public frustration with drug pricing mounted in recent months, prompting lawmakers to propose a variety of measures to tackle costs. None has gained traction in Congress, and many states are now taking the issue into their own hands.

In addition to the pharma industry, pricing attention has also spread to other segments of the drug business, such as pharmacy benefit managers. The middlemen have been thrust into the spotlight in part thanks to efforts by the pharmaceutical industry to highlight growing rebates and discounts. PBMs have countered that their tough negotiations save billions in healthcare costs.