Court Certifies a Class of Group Heath Plans in Claims that Generic Drugs were Overpriced.
Under ERISA, group health plans are legal entities that can sue and be sued. Often overlooked, these plans have the ability to raise lawsuits under not only ERISA, but state law, antitrust, and other legal theories. On May 11, the United States District Court for the District of Rhode Island certified a class of group health plans alleging that pharmacy CVS conspired with administrators of group health plan’s pharmacy benefits to overcharge participants for their generic drugs. They alleged that when they provided coupons and other discounts to those paying out of pocket, those same discounted needed to be provided to group health plans who were only supposed to pay the over-the-counter price for generic drugs. The court rejected the Defendants various arguments that the class was too difficult to quantify and that the plans were too difficult to identify with any reasonable particularly—the Court believed that there was sufficient data to make these determination to a reasonable degree of certainty.
The case highlights the opportunities that group health plans have to raise lawsuits outside of ERISA to recover for improper practices.