A series of federal lawsuits filed by major hospital systems against CVS Health and its affiliates alleges that approximately $250 million in 340B Drug Pricing Program savings were improperly diverted from covered entities between 2020 and 2025. The complaints claim CVS manipulated reimbursement processes for 340B specialty drug claims, allowing it to retain the difference between higher initial reimbursement rates and lower amounts later reported to hospitals. The litigation highlights growing concerns surrounding PBM transparency, spread pricing, specialty pharmacy arrangements, and the financial pressures facing safety-net providers that rely on 340B savings to support patient care programs and clinical services.
In an article published in Drug Topics, Matthew Modafferi discussed the mechanics of the alleged scheme, explaining how reimbursement rates were purportedly reduced after claims were identified as 340B-eligible.
“Caremark adjudicated claims at the standard network reimbursement rate and later, once the claim is identified as 340B-eligible, CVS reduced the reimbursement rate to create a ‘spread’ that it keeps as pure profit.” -Matthew Modafferi
Jonathan Levitt discussed the broader role litigation plays in addressing PBM practices and protecting healthcare stakeholders.
“Reform and amendments to the law are not as effective as one would think because large corporations find loopholes to exploit. Litigation is needed to change and deter behavior.” -Jonathan Levitt
Co-Managing Partner
