A roofers’ union filed a federal lawsuit accusing a major health insurer and its pharmacy benefit manager of inflating drug costs. The complaint targets CaremarkPCS Health and its parent, CVS Health. The filing alleges a coordinated scheme tied to prescription drug pricing and rebate handling.
The case landed in Rhode Island federal court. Plaintiffs argue Caremark used control over formularies to influence drug selection. Higher-cost medications allegedly received preferred placement.
Payments linked to those placements moved through a related entity rather than back to clients.
Caremark operates as one of the largest pharmacy benefit managers in the US market. The Roofers’ Unions Welfare Trust Fund says it paid billions annually for pharmacy benefit management services.
The fund covers prescription drug benefits for a large membership base across the country.
The complaint follows a similar lawsuit filed in Illinois last month. That case involves the Plumbers’ Welfare Fund targeting Express Scripts and its parent, Cigna. Both cases raise similar claims about rebate handling and formulary design.
Caremark maintains its role centers on negotiating lower net drug costs and maintaining access to safe medications. The lawsuit challenges that position directly. Plaintiffs describe a structure that redirected value away from plan sponsors.
At the center of the complaint sits what plaintiffs call a formulary manipulation scheme. The filing names CVS Health and Zinc Health Services alongside Caremark. Zinc, formed in 2020, operates as a group purchasing organization within the structure.
Plaintiffs allege Caremark encouraged drug manufacturers to route payments through Zinc. These payments appeared as service fees on paper.
The lawsuit claims they functioned as financial incentives tied to formulary placement decisions. According to the filing, that structure reduced rebate amounts returned to clients by billions of dollars.
The complaint states Caremark used its negotiating position to extract payments for affiliated entities. Instead of maximizing rebates for clients, plaintiffs argue the system shifted value internally. That claim sits at the core of the case.
The lawsuit also alleges preferred access for higher-priced brand drugs. Lower-cost alternatives faced restrictions or exclusion in some cases.
That approach, plaintiffs say, increased overall costs for plan sponsors and their members.
Several major pharmaceutical companies appear in the filing. Plaintiffs list AbbVie, Amgen, AstraZeneca, Bayer, Bristol-Myers Squibb, Boehringer Ingelheim, Eli Lilly, Gilead Sciences, Johnson & Johnson, Merck, Novartis, Novo Nordisk, Pfizer, and Sanofi. The complaint alleges broad participation across the drug manufacturing sector.
Legal claims include breach of contract and violation of good faith obligations. Plaintiffs argue compensation from manufacturers should reflect legitimate services, not influence formulary outcomes.
The alleged conduct dates back to March 2020 and continues into the present.
Regulatory attention around pharmacy benefit managers adds context to the case. Federal Trade Commission reviews, state investigations, and congressional inquiries continue to examine pricing practices.
According to Beinsure analysts, litigation and regulatory pressure around PBM structures have increased steadily, with rebate transparency at the center of disputes.
