CVS Pharmacy, Inc. has sued more than 30 pharmaceutical drug manufacturers accusing them of engaging in an “overarching conspiracy” to artificially inflate drug prices and allocate the market to pad their profits. Tuesday’s complaint was filed in a massive multidistrict litigation proceeding before Judge Cynthia M. Rufe of the Eastern District of Pennsylvania.
According to CVS, the defendants’ conspiracy, which began as early as 2009, was designed and implemented to “quash the constraining impact that unfettered competition had on the prices that they were able to charge for the generic drugs that they supplied.” CVS alleged that the defendants effectuated the conspiracy through a number of anticompetitive practices, including agreements to allocate certain purchasers to certain defendants and to fix the minimum price of particular generic drugs.
In addition, CVS contended, the conspiracy involved a “fair share” deal whereby each defendant refrained from selling certain generic drugs to certain purchasers. The companies’ “‘I’ll scratch your back if you scratch my back’ construct,” insulated them from competition and successfully drove drug prices up, CVS argued. The nearly 100-page complaint is also loaded with details from industry events where competitors allegedly shared competitively sensitive information, in furtherance of the conspiracy.
The filing claims that CVS operates, directly or indirectly, approximately 9,900 drugstores, 151 long-term care facility pharmacies, 11 mail service pharmacies, and 27 specialty pharmacies. Its long-term care facility pharmacies are operated by Omnicare, Inc., purchased by CVS in 2015. The complaint states that CVS was a “prime victim of these conspiracies,” with its damages for the defendants’ supposed Sherman Act violations reaching the billions.
Relatedly, Humana, Inc., a third-party payor and pharmacy operator, filed its third complaint in the same multidistrict litigation on Tuesday. Its latest complaint makes additional antitrust claims concerning price-fixed drugs not listed in its previous complaints.
CVS is represented by Earp Cohn PC and Constantine Cannon LLP.
