Louisiana files lawsuits alleging pharmaceutical giant CVS deceived customers in text messages

Winnipeg Free Press

3 days ago

NEW ORLEANS (AP) — Louisiana filed several lawsuits accusing pharmaceutical giant CVS of abusing customer information and using its dominant market position to drive up drug costs and unfairly undermine independent pharmacies, the state's attorney general said Tuesday.
Attorney General Liz Murrill began investigating CVS after the company sent out mass text messages to thousands of residents on June 11 to lobby against legislation that took aim at its business structure. The texts warned that medication costs could go up and all CVS pharmacies in the state would close.
The lawsuits, which were filed Monday in central Louisiana's St. Landry Parish, seek 'injunctive relief, civil penalties and restitution,' Murrill said.
CVS 'abused customers' sensitive information to push a political message,' Republican Gov. Jeff Landry said Tuesday at a press conference.
He noted CVS had lobbied his wife over text via the same messaging chain normally used to notify her about picking up a prescription drug or other healthcare-related matters.
One lawsuit argues that the text message lobbying constituted 'unfair or deceptive acts' in violation of state trade law. Two Louisiana-based law firms have filed a separate class action lawsuit against CVS over the text messages.
CVS has denied any wrongdoing.
'Our communication with CVS customers, patients and members of the community was consistent with the law,' CVS said in an emailed statement. 'We believe it was important for people to know about a potential disruption to where they get their medicine.'
Two other lawsuits allege that CVS artificially inflates prices for consumers and independent pharmacies.
CVS serves as a pharmacy benefit manager — essentially an intermediary that buys medication from manufacturers and distributes drugs to pharmacies.
CVS and the mail-order pharmacy Express Scripts dominate the market by processing about eight out of every 10 prescription drug claims, according to the Federal Trade Commission, which warned in a 2024 report that this allows for 'inflating drug costs and squeezing Main Street pharmacies.'
Because CVS also owns a vast network of retail pharmacies — including 119 in Louisiana — it sets the terms for how prescription drugs are sold to customers there.
The proposed law that sparked the text messages from CVS had sought to ban pharmacy benefit managers like CVS from owning drug stores. The law failed to pass, but Landry has stated he will seek to revive it.
In the state's litigation, Murrill alleges that CVS business structure and practices allow the company to 'manipulate prices, restrict competition and channel profits internally.'
One lawsuit accuses CVS of 'systematically under-reimbursing independent Louisiana pharmacies to the point of economic hardship, while routing patients to CVS-owned facilities.' The lawsuit alleges that CVS imposes 'unethical, unscrupulous, and exorbitantly high fees on independent pharmacies.'
CVS said that it should not have to pay higher rates for 'less efficient pharmacies' and that this would lead to 'higher costs for consumers.'
'Importantly, CVS Pharmacy remains the lowest cost pharmacy and a critical partner in lowering prescription drug costs for Louisianans,' the company said.
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Another lawsuit argues that CVS uses its market control to exclude lower-cost drugs for 'high-rebate, high-price brand drugs' and other practices that 'distort the drug market' and 'drive up costs for the state's public health programs and its citizens.'
CVS said that its business structure allows for 'better access, affordability, and advocacy for those we serve.' The company said that removing CVS pharmacies from Louisiana would increase costs to the state by more than $4.6 million.
Landry said he would seek new legislation targeting CVS if existing laws were insufficient to win in court.
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Brook is a corps member for The Associated Press/Report for America Statehouse News Initiative. Report for America is a nonprofit national service program that places journalists in local newsrooms to report on undercovered issues.