On February 20, 2026, Louisiana Attorney General Liz Murrill announced a landmark $45 million settlement with CVS Health Corporation, CaremarkPCS Health LLC, and other affiliated CVS/Caremark entities. The agreement resolves three lawsuits filed by the state in June 2025 and caps a legal confrontation between state officials and one of the nation’s largest pharmacy benefit managers (PBMs). More broadly, the settlement exemplifies a nationwide shift toward aggressive enforcement of regulations aimed at curbing anticompetitive PBM conduct and protecting the interests of independent pharmacies.
The Disputes
The conflict between CVS and Louisiana arose in the summer of 2025, when the Louisiana Legislature was considering House Bill 358 (HB 358), a measure that would have barred PBMs like Caremark from owning vertically integrated retail pharmacies. On June 11, 2025, CVS sent mass text messages to thousands of Louisiana customers, including state employees and the governor’s wife, urging them to oppose the bill. The messages warned that HB 358’s passage would force CVS to close 119 pharmacies, displace roughly one million patients, and eliminate 2,700 jobs. Attorney General Murrill responded swiftly, alleging that CVS had improperly repurposed customers’ personal prescription data to conduct a political lobbying campaign “under the guise of prescription and health notifications.” That incident triggered the first of three lawsuits.
The second lawsuit targeted CVS’s vertically integrated business model, its combination of CVS Pharmacy, CVS Caremark (the PBM), and Aetna (the insurer). The state alleged that this structure enabled the company to inflate drug prices, obscure actual costs through opaque rebate systems and layered administrative fees The complaint further characterized the arrangement as an “oligopoly feedback loop” that drove up consumer prices, particularly for critical medications like insulin.
The third lawsuit focused on CVS’s impact on independent pharmacies. The state alleged that Caremark imposed coercive contracts, systematically under-reimbursed independent operators while steering patients to CVS-owned facilities, and engaged in “spread pricing” (the practice of pocketing the difference between what a PBM charges health insurers and what it pays pharmacies).
All three suits were brought under Louisiana’s Unfair Trade Practices and Consumer Protection Law and sought injunctive relief, restitution, civil penalties, and attorney fees.
The Settlement
Pursuant to the February 2026 three-lawsuit settlement agreement, CVS will pay Louisiana $45 million without admitting liability or wrongdoing. Attorney General Murrill stated that the settlement funds will be used to implement pharmacy benefit legislation and support Medicaid fraud initiatives in collaboration with the Inspector General and the Louisiana Department of Health.
Attorney General Murrill emphasized that the settlement is designed to “further ensure accountability in pharmaceutical pricing and PBM industry practices.” Specific allocation details have not yet been made public, but the state has signaled that much of the funding will support the implementation and enforcement of PBM reform legislation passed by the Louisiana Legislature in 2025.
The Settlement in Context
The settlement does not exist in a vacuum. It arrives alongside a wave of legislative and regulatory action in Louisiana targeting PBM practices. In 2025, the Legislature passed a comprehensive PBM reform bill that restricts how PBMs generate profits, mandates greater disclosure of pricing and revenue data, enhances the state’s regulatory authority over PBMs, and improves drug reimbursement rates for independent pharmacies (see Frier Levitt’s discussion of Louisiana’s new PBM Regulation Act).
The Legislature also voted to split the state’s PBM contract for 2026, awarding the majority of the work to Liviniti, a Louisiana-based, non-vertically integrated PBM, rather than renewing its contract with CVS Caremark. Independent pharmacy advocates praised this move, viewing it as a meaningful step toward eliminating the conflicts of interest inherent in a vertically integrated PBM that can direct patients away from competitors and toward its own retail outlets.
Additionally, Louisiana’s PBM Monitoring Advisory Council has been restructured and is actively collecting data to inform future legislative efforts. State Senator Heather Cloud has indicated that a full ban on PBM ownership of pharmacies modeled on a law enacted in Arkansas may be introduced in a future legislative session. If pursued, such a measure would represent one of the most aggressive state-level interventions in PBM regulation in the country.
For years, independent pharmacies in Louisiana and across the country have sounded the alarm about the business practices of vertically integrated PBMs. Their central complaint is straightforward: when a PBM both manages prescription drug benefits and owns competing retail pharmacies, there exist pervasive structural incentives for PBMs to under-reimburse independents, unilaterally impose onerous contract terms, and steer patients toward their own stores. Louisiana’s settlement with CVS and recent legislative reforms aim to eliminate these threats on multiple fronts.
Looking Ahead
Louisiana’s $45 million settlement is part of a growing national trend of states taking aggressive action against PBM practices. As of early 2026, dozens of states have enacted or are considering PBM reform legislation (such as Arizona), the Federal Trade Commission has also signaled increased scrutiny of vertical integration in the pharmaceutical supply chain, and the House Judiciary Committee recently issued a report chastising Caremark for stifling innovation and competition in the pharmacy services industry. Louisiana’s approach (combining litigation, settlement, and legislation) offers a potential template for other states seeking to rein in PBM practices and protect local pharmacies.
Whether the settlement and reforms will produce lasting change depends on execution. Specifically, how the funds are deployed, how effectively the new laws are enforced, and whether future legislatures follow through on proposals like the vertical integration ban will be critical factors in determining whether these regulatory efforts truly make a difference.
How Frier Levitt Can Help
If your pharmacy is navigating complex relationships with PBMs, now may be the right time to reassess your options. At Frier Levitt, we routinely advise clients across the pharmacy services industry in connection with audit and termination appeals, reimbursement reconciliation and recovery matters, among other issues. We welcome the opportunity to assist independent pharmacies seeking to enforce their rights against PBMs and to discuss available legal and regulatory options.
