Nearly 30 states have joined in on a lawsuit filed by Massachusetts Attorney General Andrea Joy Campbell against CVS Health and its pharmacies. The lawsuit accuses the pharmaceutical giant of submitting "false and fraudulent" claims to Medicaid programs operating in the states named as defendants. The complaint originally included four states, California, Connecticut, Indiana, and Massachusetts, but would grow to include more than two dozen states, including Washington, D.C.

Attorneys general in California, Delaware, Maryland, Oklahoma, Hawaii, and others say their state Medicaid programs have been overpaying for CVS claims because CVS customers were offered lower drug prices if prescriptions were paid for in cash through a discount program CVS offered.

The discount program was operated by a company called ScriptSave. Together, ScriptSave and CVS allowed customers to pay significantly lower prescription costs while billing Medicaid patients much higher costs for the same prescriptions. The lawsuit explains that CVS did not report the discounted rates to the states' Medicaid programs. It continues that since 2016, CVS did not submit its customary prices available to other payers on prescription drug claims to Medicaid. As a result, Medicaid was overpaying for prescription drug costs as compared to other health plans available.

CVS's partnership with ScriptSave took the place of a previous discount card program, Health Savings Pass. Through both programs, customers enrolled were able to use their discount card to receive prescription drugs at reduced costs.

The lawsuit includes several counts of false and fraudulent claims, false records or statements, breach of contract, and unjust enrichment, among others. All the states list specific violations to which their state Medicaid programs were subjected because of the different pricing structures.

Massachusetts Attorney General Andrea Joy Campbell explained in a statement that "When pharmacies offer discounted drug pricing to their customers, they must also charge MassHealth (the state's Medicaid program) that same low price."

CVS has pushed back against claims of inflating or charging inaccurate prices. "We've always been transparent with Medicaid programs concerning the prices we were submitting," a CVS spokesperson said. "The four states involved in this lawsuit have never issued guidance to pharmacies contending that third-party discount card prices constitute a pharmacy's Usual and Customary (U&C) prices."

The pharmaceutical giant even detailed in its statement that this is not the first time it has faced legal action because of its discounted rates. It explained that over the years, many other pharmacies, alongside CVS Pharmacy, have been accused of inflating usual and customary prices. However, it has consistently prevailed in defending itself in court because the claims it is being accused of simply aren't true.