New York Attorney General Letitia James sued CVS on Thursday, alleging it violated antitrust laws and forced some safety-net hospitals to use a CVS-owned third-party administrator for 340B drug programs and incur millions of dollars in additional costs while it left other hospitals to miss out on critical federal funds.
The federal 340B program allows hospitals to stretch their funding by getting discounts on eligible drugs they prescribe to patients and use the savings on patient care. Most safety-net providers such as hospitals use third-party administrators to run their 340B programs, and the hospitals must keep records of the revenue they collect on prescriptions, including drugs to treat HIV/AIDS and hepatitis C. Third-partner administrators are responsible for confirming that each drug transaction is eligible for the program.
The lawsuit alleges that since 2017, CVS acquired a third-party administrator, Wellpartner, and forced the hospitals it contracted with to use the program for patients using CVS—and that CVS did not contract with hospitals that didn’t want to use Wellpartner.
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