NCPA Blasts CVS Caremark Move to Short-Circuit Class Action Case

Corporate bully tries to force arbitration, where the deck is stacked against small pharmacies

NCPA February 6, 2024

ALEXANDRIA, Va. (Feb. 6, 2024) – The National Community Pharmacists Association today blasted a move by CVS Caremark, which is defending itself in a federal class action lawsuit by a small Iowa pharmacy, for its motion to compel the plaintiff into a one-sided arbitration proceeding.

In response to the lawsuit, CVS Caremark recently filed a motion to force the plaintiff, Osterhaus Pharmacy, into arbitration to settle the matter. To do so, Osterhaus would have to ante up $50,000 before an arbitrator will hear any aspect of the complaint.

“The barrier to entry and the one-sided arbitration rules are obscene,” said NCPA CEO B. Douglas Hoey, pharmacist, MBA. “It’s clearly designed to discourage small pharmacies from filing any complaints.”

In their response to the CVS Caremark motion, lawyers for Osterhaus say the CVS Caremark contract, which mandates arbitration, is “laden with unconscionable terms.” One of them is the $50,000 escrow requirement just to get in front of an arbitrator. Another requires independent pharmacies to file their disputes separately, even if they’re all making the identical claim. That provision, said Hoey, ensures that small pharmacies can’t pool their resources and must therefore face the highest costs and procedural obstacles.  

Other provisions: limit the award arbitrators can order CVS Caremark to pay; limit the data and documents small pharmacies can seek during discovery; and require small pharmacies to pay CVS Caremark’s legal expenses if they don’t win the arbitration.

“In order to serve their own patients, small pharmacies must accept all these unfair, one-sided contract provisions,” said Hoey. “They have absolutely no choice. And each of the provisions is designed to discourage arbitration or create an unfair advantage for CVS Caremark.”

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Founded in 1898, the National Community Pharmacists Association is the voice for the community pharmacist, representing over 19,400 pharmacies that employ nearly 240,000 individuals nationwide. Community pharmacies are rooted in the communities where they are located and are among America’s most accessible health care providers. To learn more, visit www.ncpa.org.

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