Three major hospital systems filed federal lawsuits against CVS Health and several of its affiliates, alleging the company diverted approximately $250 million in savings generated through the federal 340B Drug Pricing Program between 2020 and 2025. According to the complaints, CVS manipulated reimbursement processes for 340B specialty drug claims, allowing affiliated entities to retain funds that were intended to support safety-net hospitals and the vulnerable patient populations they serve. The litigation raises significant questions about transparency, accountability, and the financial practices surrounding pharmacy benefit managers (PBMs) and contract pharmacy arrangements.
Jonathan Levitt, co-managing partner of Frier Levitt and counsel for the plaintiff hospitals, emphasized that the lawsuits go beyond contractual disputes and focus on the alleged diversion of funds Congress intended to expand access to care for underserved communities. His comments underscore the broader public policy implications of the litigation, which could have lasting effects on how 340B arrangements are structured and monitored in the future.
“What our Complaints allege is the opposite: that behind the scenes, CVS systematically diverted funds Congress specifically designated to help safety-net hospitals care for the most vulnerable Americans — and pocketed them as corporate profit.”
As the cases move forward, they are expected to draw increased attention to the role of vertically integrated PBMs, specialty pharmacies, and third-party administrators within the 340B ecosystem. The outcome could influence future contracting practices, compliance expectations, and oversight of reimbursement models that are central to the financial stability of covered entities participating in the 340B program.
Co-Managing Partner
