The United States District Court for the District of Arizona has confirmed an earlier arbitration judgment of $23 million awarded to AIDS Healthcare Foundation (AHF) against Caremark LLC, a subsidiary of the pharmacy giant CVS, for unfair reimbursement practices.
“This case is a major victory for all independent pharmacies,” said AHF President Michael Weinstein. “It’s not a free market when three companies can draw 80% of a marketplace, and it’s not a free market when our clients, who rely on us for services, cannot be served by us if we do not submit to these unfair terms.”
In November 2019, AHF filed suit with the American Arbitration Association against Caremark LLC, a pharmacy benefits manager (PBM), for breach of agreement and the covenant of good faith and fair dealing. The dispute arose from Caremark’s unfair practice of charge-backs on prescriptions filled by AHF pharmacies on behalf of insurance prescription plan sponsors such as those covering Medicare Plan D beneficiaries.
As a result of the charge-backs by Caremark, for a number of years, AHF was being reimbursed less than what Part D plan sponsors received in prescription reimbursement from public Part D monies. In November 2021, the arbitrator ruled in favor of AHF and ordered Caremark to reimburse AHF nearly $23 million in damages and arbitration expenses. Subsequently, in November 2021, Caremark filed a court motion to vacate or correct the arbitration award; however, on Sept. 15, 2022, the United States District Court for the District of Arizona upheld AHF’s arbitration award.
