Three health systems file suit CVS Healthalleging that the company and its pharmaceutical subsidiaries misappropriated approximately $250 million in savings from 340B Drug Pricing Program.
Health systems… Mount Sinai, Michigan Medicine and the University of Kansas Health System — filed separately lawsuits Monday.
The 340B program was established in 1992 to help safety net providers better serve vulnerable populations by allowing eligible hospitals and clinics to purchase outpatient medications at significantly reduced prices.
The complaints indicate that CVS, through its pharmacy benefit manager CVS Caremark and its related subsidiaries, implemented reimbursement structures that preserved the gap between payments from insurers and reimbursements passed on to 340 billion providers. Health systems say this “tiered pricing” has redirected funds intended to support care for low-income and uninsured patients.
The lawsuits allege that this practice resulted in the misappropriation of approximately $250 million in funds between 2020 and 2025.
Jonathan Levitt – founding partner of Frier Levitt, the law firm representing the plaintiffs – said CVS violated the intent of the 340B program.
“CVS Health’s mission statement commits the company to reducing the cost of care and improving the health and well-being of those it serves,” it said in a statement released Thursday. “What our complaints allege is the opposite: that behind the scenes, CVS systematically misappropriated funds that Congress had specifically designated to help safety-net hospitals care for the most vulnerable Americans – and pocketed them as corporate profits. Hospitals seek to fully account for and recoup funds that should have been dedicated to expanding access to care for underserved communities.”
Dan Peters, general counsel for the University of Kansas Health System, said his organization has already tried to resolve this issue with CVS.
“CVS refused to authorize a contractually required audit and terminated our 340B agreement. The 340B program allows hospitals to help serve patients in need. We will work to ensure patients continue to benefit from the program,” he wrote in an emailed statement.
A Mount Sinai spokesperson said the lawsuit aims to ensure hospitals “are not wrongfully hijacked by for-profit intermediaries,” as well as to protect their ability to provide care to vulnerable patients.
CVS did not respond to MedCité News” request for comment.
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