Three health systems are suing CVS Health, alleging the company and its pharmacy subsidiaries diverted roughly $250 million in savings from the 340B Drug Pricing Program.
The health systems — Mount Sinai, Michigan Medicine and the University of Kansas Health System — filed separate lawsuits on Monday.
The 340B program was established in 1992 to help safety net providers better serve vulnerable populations by allowing eligible hospitals and clinics to purchase outpatient drugs at steeply discounted prices.
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The complaints say that CVS, through its pharmacy benefit manager CVS Caremark and related subsidiaries, set up reimbursement structures that retained the gap between insurer payments and reimbursements passed on to 340B providers. The health systems say this “spread pricing” redirected funds meant to support care for low-income and uninsured patients.
The lawsuits allege that this practice resulted in roughly $250 million in diverted funds between 2020 and 2025.
Jonathan Levitt — founding partner at Frier Levitt, the law firm representing the plaintiffs — said that CVS violated the intent of the 340B program.
“CVS Health’s mission statement commits the company to lowering the cost of care and improving the health and well-being of those it serves,” he said in a statement issued Thursday. “What our Complaints allege is the opposite: that behind the scenes, CVS systematically diverted funds Congress specifically designated to help safety-net hospitals care for the most vulnerable Americans — and pocketed them as corporate profit. The hospitals are seeking full accountability and recovery of the funds that should have gone to expanding access to care for underserved communities.”
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Dan Peters, general counsel for the University of Kansas Health System, said that his organization had tried to resolve this issue with CVS in the past.
“CVS refused to permit a contractually required audit and terminated our 340B agreement. The 340B program allows hospitals to help serve patients in need. We will work to ensure patients continue to benefit from the program,” he wrote in an emailed statement.
A spokesperson for Mount Sinai said the lawsuit seeks to ensure hospitals “are not wrongly skimmed off by for-profit intermediaries,” as well as protect their ability to provide care to vulnerable patients.
CVS did not respond to MedCity News’ request for comment.
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