In Win for Pharmacies, Court Rules Part of CVS Arbitration Clause ‘Unconscionable’
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Nov 26, 2024
Independent pharmacies scored an early win in a class action lawsuit against CVS Health Corp., Caremark and Aetna that seeks to recoup millions of dollars in direct and indirect remuneration (DIR) fees. The National Community Pharmacists Association (NCPA) hailed the “landmark” decision to allow the court to decide whether arbitration is necessary, noting that arbitration clauses keep similar cases and their facts secret. “That allows Caremark and the other PBMs to continue to treat pharmacies unfairly and illegally extract junk fees,” Matthew Seiler, NCPA’s general counsel, said in a statement.
On Nov. 15, Judge John Tuchi in the U.S. District Court for the District of Arizona ruled that the court should decide whether the case should be sent to arbitration, not an arbitrator. He deemed several provisions of the CVS arbitration clause unconscionable, including one that requires plaintiffs to deposit $50,000 in an escrow account before arbitration. A CVS spokesperson tells AIS Health that the company is reviewing the order but has no additional comment on ongoing litigation.
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