Rather than dismiss the claims brought by the benefit funds subject to the Caremark contracts, Judge Smith placed them “in a subclass for which this case is stayed until completion of the arbitrator’s assessment of arbitrability.”
“If an arbitrator finds a [benefit fund’s] claims not arbitrable, the court will lift the stay for those claims and allow them to proceed,” Judge Smith said.
The dispute dates back to 2016 when the Sheet Metal Workers Local No. 20 Welfare and Benefit Fund accused CVS of violating state consumer protection laws, negligent misrepresentation, and unjust enrichment by failing to price its health savings pass membership with its “usual and customary” price. This allegedly led to inflated prices submitted to PBMs, resulting in insured consumers paying more for generics than the usual and customary cash price.
In 2018, the benefit fund lodged an amended complaint naming Caremark as a defendant and adding a claim that CVS conspired with PBMs to defraud health plans by not requiring them to report health savings pass pricing as usual and customary pricing.
