Last week, NCPA applauded a decision by a federal judge in Arizona in a landmark class action case against CVS Health, the largest PBM in the country. In the case, Osterhaus Pharmacy Inc. v CVS Health Corporation, Judge John J. Tuchi in the United States District Court for the District of Arizona ruled that a court, and not an arbitrator, should decide whether a plaintiff’s claims against the company must be sent to arbitration.
Among other things, Osterhaus challenged a provision in its contract with CVS purporting to say all disputes must be decided by an arbitrator. CVS argued that even the question of what can be arbitrated has to be arbitrated. Tuchi agreed with Osterhaus that, given the many unfair barriers erected by CVS, even delegating the decision on what has to be arbitrated is unconscionable.
“Caremark and the other PBMs stack the decks in their arbitration proceedings to avoid accountability for illegal acts,” said NCPA General Counsel Matthew Seiler. “The ‘day in court’ they offer pharmacies costs more and takes away important rights that pharmacies would have if they could proceed in court. We are glad that the court recognized how Caremark’s forced arbitration clause is ‘substantively unconscionable.’”
“The arbitration process also keeps these cases secret. That allows Caremark and the other PBMs to continue to treat pharmacies unfairly and illegally extract junk fees. We are hoping this lawsuit helps to bring these unlawful practices into public view.”
You can read the full NCPA news release here.
