NEW ORLEANS — The state of Louisiana has filed multiple lawsuits against CVS, accusing the pharmaceutical company of exploiting customer information and using its dominant role in the market to inflate drug prices while undercutting independent pharmacies. This move follows an investigation led by Louisiana Attorney General Liz Murrill after CVS sent mass text messages to numerous residents on June 11. The messages warned of potential increases in medication costs and the closure of CVS pharmacies across the state if certain legislation were passed.
These lawsuits were initiated on Monday in St. Landry Parish, in central Louisiana, and they aim to secure “injunctive relief, civil penalties, and restitution,” as mentioned by Murrill. Governor Jeff Landry criticized CVS for what he described as an abuse of customers’ sensitive information to propagate a political agenda. He noted that even his wife had received texts via the same communication channel the company used for healthcare notifications.
One of the lawsuits specifically argues that the text message campaign amounted to “unfair or deceptive acts” in violation of state trade laws. Moreover, two law firms in Louisiana have lodged a separate class action suit against CVS over the text messages.
CVS, however, has refuted allegations of any misconduct. The company said in a statement that their communication with customers was within legal bounds and emphasized the importance of informing people about potential disruptions to their access to medication.
Additional lawsuits accuse CVS of unjustly inflating drug prices for both consumers and independent pharmacies. As a pharmacy benefit manager, CVS functions as a middleman between drug manufacturers and pharmacies. The company, alongside Express Scripts, holds a dominant position in the market, processing a significant majority of prescription drug claims. The Federal Trade Commission has noted this dominance could lead to increased drug costs and pressure on independent pharmacies.
CVS owns an extensive network of retail outlets, including 119 pharmacies in Louisiana, enabling it to dictate the terms of drug sales. The legislation that prompted CVS’s messaging campaign intended to ban pharmacy benefit managers, like CVS, from owning drug stores, though it ultimately failed to pass. Governor Landry has indicated a desire to revisit the proposed law.
In bringing these suits, Murrill claims that CVS’s business structure enables price manipulation, competition restriction, and the internal channeling of profits. One particular lawsuit alleges that CVS systematically underpays independent pharmacies in Louisiana, inflicting economic strain while steering customers to its own facilities. It also accuses CVS of imposing unjustifiably high fees on independent pharmacies.
In response, CVS argued that paying higher rates for less efficient pharmacies would burden consumers with higher costs, asserting that CVS Pharmacy remains a low-cost option critical to reducing prescription drug expenses for residents in Louisiana. Another suit contends that CVS uses its market influence to prioritize high-rebate, high-price branded drugs over lower-cost alternatives, an action that is said to distort the drug market and increase costs for public health programs and citizens.
CVS maintains that its business model enhances accessibility, affordability, and advocacy for its clients. The company warned that the removal of CVS pharmacies from Louisiana would result in a cost increase exceeding $4.6 million for the state.
Governor Landry has vowed to pursue additional legislative measures against CVS if current laws prove inadequate in court. This development highlights ongoing tensions over drug pricing and market competition in the pharmaceutical sector.