Software company Sentry Data Systems said it scored concessions from pharmacy giant CVS Health in a legal dispute over CVS' alleged requirement that 340B hospitals and other providers use its software company Wellpartner or risk losing access to its pharmacies.
CVS agreed to write a letter informing Sentry's provider customers that it would not require them to use Wellpartner as their 340B program administrator for non-CVS pharmacies. But the pharmacy chain still plans to require hospitals to use Wellpartner to administer their CVS contracts.
"This initial victory is only the first step in rolling back CVS' unreasonable mandate to use Wellpartner, which places an undue burden on hospitals and clinics that already serve some of the neediest and most vulnerable patient populations in the country," Sentry CEO Travis Leonardi said in a statement.
Sentry said it would continue to pursue its antitrust claims against CVS and Wellpartner. CVS, which is pursuing a merger with health insurer Aetna, faces a similar lawsuit by 340B program administrator RxStrategies.
Sentry provides software to healthcare providers participating in the federal 340B program, which requires pharmaceutical companies to provide hospitals and clinics with significant discounts on prescription drugs.
Sentry sued CVS in February, claiming it violated antitrust laws by forcing hospitals and clinics to use CVS' 340B platform or lose access to its pharmacies. After CVS bought Sentry's competitor Wellpartner, CVS told providers to switch to using Wellpartner as their 340B administrator before the end of 2018, according to the complaint filed in the U.S. District Court for the Southern District of Florida.
CVS' purchase of Wellpartner is "a vertical integration attempt to basically monopolize control over safety-net providers and hold them hostage," Leonardi said in an interview.
He said 100 health system customers have said they plan to comply with CVS' demand and break their contracts with Sentry because they can't risk losing access to CVS pharmacies, given its national presence and its dominant position in the specialty pharmacy market. Sentry also alleged in the complaint that CVS used Sentry's confidential customer data to "solicit Sentry customers and coerce them into using Wellpartner's 340B platform."
Sentry said the CVS requirement harms competition and will lead to the closure of 340B program administrators, which would require 340B hospitals and clinics to pay higher prices for administrative services.
CVS argues that Sentry's lawsuit has no merit. "We continue to believe that Sentry and RxStrategies are trying to use unfounded antitrust allegations to stall the growth of Wellpartner, which is a smaller competitor," a spokesman said.