Over the past several years, “pharmacy hubs” have become a critical part of the prescription drug ecosystem, particularly for specialty medications, complex therapies, and high-touch patient populations. Hubs are designed to improve patient access, streamline administrative burdens, and facilitate coordination among manufacturers, pharmacies, prescribers, payers, and patients. Yet for many independent pharmacies and hub operators, participation in certain hub models has come with significant risk, especially when pharmacy benefit managers (PBMs) view these arrangements as a threat to their own vertically integrated businesses. Few PBMs have been more central to this tension than CVS Health’s Caremark.
According to a January 2026 report from the House Judiciary Committee, titled “When CVS Writes the Rules: How CVS Protects Itself from Innovation and Competition, ” internal documents suggest that CVS Health (which operates CVS Pharmacy, CVS Caremark, and Aetna under one corporate umbrella) engaged in a coordinated effort to prevent independent pharmacies from partnering with hub pharmacies. These hubs offer software-enabled services such as real-time price transparency, streamlined prior authorization, patient enrollment and intake, care coordination, and nationwide prescription fulfillment networks. They work with networks of independent or specialty pharmacies that ultimately fill and dispense prescriptions. Hubs level the playing field by allowing independent pharmacies to compete more effectively with PBM-owned specialty pharmacies on complex therapies. According to the Judiciary Committee’s findings, rather than competing on the merits with these digital models, CVS Health monitored independent pharmacies for hub activity, revised its provider manual to prohibit hub partnerships, and deployed audits and cease-and-desist letters to pharmacies that worked with competitors like Blink, Phil, and Carepoint. This conduct, the report concludes, may constitute a violation of antitrust laws and deprived consumers of the benefits of pharmacy innovation.
CVS Health’s Strategy, Rules, and Enforcement Practices
According to the House Judiciary Committee’s investigation, CVS Health has historically taken an aggressive posture toward network pharmacies that participate in certain hub arrangements.
Internal CVS documents produced to the Judiciary Committee identified Amazon PillPack, Capsule, TruePill, Nimble, Phil, and Blink as existential disruptors. CVS forecasted potential nine-figure annual losses, absent a digital pivot to their own operations. The resultant CVS hub pharmacy initiative was scoped with real-time pricing, delivery scheduling, and central-fill optimization that prioritized a “build-and-block” strategy toward competitors, as opposed to a standard partnership or acquisition of an emerging hub provider.
According to the Judiciary Committee, CVS Health then “tweaked” its provider manual to: forbid acting as or with hubs without its consent; restrict third-party software integrations via certification-ID controls; and, prohibit “test claims,” a tool that enables real-time price transparency. These changes were implemented while CVS simultaneously planned similar functionality for its own platform. Subsequent emails contemplated accelerated termination timelines for “hub models” and even restrictions on independent central fill.
CVS Health enforced these rules through audits and waves of cease-and-desist letters sent to dozens of independent pharmacies between 2022 and 2024, demanding reversal of paid claims, cessation of hub-enabled workflows, and submission of extensive corrective action plans, all while threatening immediate termination from the nation’s largest PBM network. Internal communications from CVS Health touted the cease-and-desist letters’ success in forcing pharmacies to end hub contracts.
The Judiciary Committee’s report also provides telling case studies. For example, two pharmacies, White Drug and Village Fertility Pharmacy, received cease-and-desist letters in connection to their relationship with Blink-related dispensing, despite asserting overall compliance with the provider agreement. In White Drug’s case, CVS Health relied on “future-dated” test claims as evidence supporting termination. Another pharmacy, Market 32, lost its CVS Caremark network status over its Blink relationship despite proposing to pause the relationship pending CVS Health’s approval.
From the pharmacy perspective, these actions created a chilling effect. Many pharmacies declined to work with hubs or exited existing hub relationships not because of clinical or operational concerns, but because of fear of PBM retaliation.
Pretextual Fraud Justification
Under established antitrust law, conduct that forecloses rivals from a substantial share of opportunities can constitute unlawful maintenance of monopoly power, particularly when not tied to a legitimate business justification. Notably, the Committee’s report frames CVS Health’s conduct within a broader examination of vertical integration, market power, and competition in the prescription drug supply chain.
The Committee focused on CVS’s unique role as both a rulemaker and a market participant, operating as a PBM that sets network standards while simultaneously owning specialty pharmacies and patient access platforms that compete directly with independent pharmacies and third‑party hubs. According to the report, this structure allows CVS Health to rely on broadly worded contractual provisions, such as prohibitions on “interference,” “steering,” or improper data use,” to selectively enforce its rules against pharmacies participating in hub models that threaten CVS‑affiliated businesses.
The Committee expressed concern that these enforcement actions were often untethered from demonstrable patient harm or program integrity concerns and instead functioned to chill innovation, limit patient choice, and suppress competitive hub models that could otherwise improve access to specialty therapies. It cited prior investigations into Microsoft, Visa, and Dentsply for the proposition that exclusionary rules that protect a platform’s dominance may violate antitrust principles, such as broad prohibitions of hub providers by CVS Health.
While CVS Health responded by asserting that concerns over fraud by plan sponsors related to “hyper-inflated” drugs demonstrated CVS Health was not acting anticompetitively, the Committee’s investigation identified little support for fraud claims tied to legitimate hub partnerships. Furthermore, internal documents expressed a consistent view throughout CVS Health that plan edits banning hub providers are more effective than audits in addressing spend. CVS Health’s “fraud” justification is therefore seen as a pretext by the Committee. Although the report stops short of making formal legal conclusions, it repeatedly frames this conduct as raising serious antitrust and unfair competition concerns, particularly where CVS Health’s actions appear exclusionary rather than pro‑competitive.
What Happens Next?
While the House Judiciary Committee’s report does not itself change the law, it meaningfully shifts the enforcement and compliance landscape. Several developments are worth watching closely.
- Revisions to CVS Health’s Caremark Manuals and Policies: One near-term possibility is that CVS Health revises its pharmacy manuals or network policies to clarify or soften its position on hub participation. Increased congressional scrutiny may make aggressive enforcement against hub-related activity more difficult to sustain.
- Less Aggressive Enforcement Posture: Even absent formal policy changes, PBMs often recalibrate enforcement behavior following high-profile investigations. Pharmacies that previously faced audits or threats may find CVS Health less willing to pursue marginal or novel theories of noncompliance tied to hubs.
- Increased Willingness to Challenge PBM Actions: The Committee’s findings may embolden pharmacies and hub operators to push back. Conduct that once felt untouchable may now be viewed through an antitrust or unfair competition lens, particularly where enforcement appears selective or exclusionary.
- Broader PBM Scrutiny: Although CVS Health is the focus of the report, the standards articulated by the Committee apply broadly. Other PBMs with similar vertical integration models may face comparable scrutiny if they engage in analogous conduct.
Implications for Independent Pharmacies and Hub Operators
For independent retail chains, supermarket pharmacies, specialty pharmacies, and hub operators, the Committee’s report creates both opportunity and risk.
Entities considering hub participation should reassess PBM contractual language in light of evolving scrutiny and evaluate whether prior “red lines” might still apply. As with any hub structure, especially ones funded by manufacturers or their proxies, it is important to always reevaluate models to ensure they are and remain regulatorily compliant and capable of withstanding PBM arguments.
In addition, pharmacies that were previously audited, terminated, or pressured by CVS Health due to hub participation should consider whether those actions were consistent with contract terms and competition principles, as expounded upon by this report. Pharmacies that faced negative consequences may have rights or strategic opportunities to revisit the appropriateness of CVS Health’s actions.
How Frier Levitt Can Help
The Committee’s investigation into CVS Health represents one of the most significant congressional examinations of PBM conduct to date, particularly as it relates to pharmacy hubs and independent pharmacy participation. For entities seeking to operate hubs, or pharmacies looking to participate in them, this may be an inflection point. New opportunities may emerge as PBM conduct comes under heightened scrutiny.
Likewise, pharmacies and hub operators that were negatively impacted by prior CVS Health actions should consider whether those actions raise contractual, regulatory, or antitrust issues under the standards discussed by the Committee. Finally, the report raises a broader question: are there other PBM practices, by CVS Health or others, that similarly suppress competition or innovation and warrant challenge?
If you are a pharmacy, hub operator, or healthcare company navigating these issues, or if you were previously impacted by PBM enforcement related to hub participation, now may be the right time to reassess your options. Frier Levitt attorneys regularly advise clients across the drug supply chain on PBM contracting, hub structures, and strategic responses to enforcement actions, and we welcome the opportunity to discuss whether new paths forward may be available.
