Law 360 – CVS Wants HIV Patients’ Disability Bias Suit Tossed

By Emmy Freedman, LAW 360

CVS urged a California federal judge to toss a proposedclass action accusing it of violating the Affordable Care Act’s nondiscrimination provision by forcingpeople with HIV and AIDS to get medications by mail, saying the patients suing no longer receiveprescriptions from the company’s Caremark unit.

CVS and its prescription benefit management subsidiaries Caremark LLC and Caremark CaliforniaSpecialty Pharmacy LLC said in a motion to dismiss filed Friday that they should be freed from thefive-year-long disability discrimination case that accuses them of running afoul of the Affordable CareAct and California’s unfair competition law.

“If a case becomes moot at any time while it is pending, a court must dismiss it,” CVS said. “Becauseplaintiffs are no longer enrolled in a health plan administered by Caremark, their claims for injunctiverelief under the ACA and UCL are moot, and no other remedies are available.”

The four HIV-positive anonymous patients who brought the suit in February 2018 said they received prescription drug coverage through employer-sponsored health plans administered by Caremark. They said the companies discriminate against people with HIV and AIDS by not giving them theoption to fill their prescriptions in person at a retail pharmacy.

The lawsuit seeks to force CVS to exempt the patients from their health plans’ mail-order terms andallow them to receive in-network pricing for their specialty medicines at retail pharmacies, themotion said.

According to Friday’s motion, two of the four plaintiffs died in 2021. Of the other two, John Doe Onewas enrolled in an Amtrak-sponsored health plan administered by Caremark until 2018, and laterenrolled in a different Caremark-administered plan until September 2021, but now no longer receivesbenefits through Caremark, the companies said.

John Doe Four is in a similar situation, having not been enrolled in a Caremark-administered plansince January 2022, according to the motion.

“As a result, none of them is suffering any ongoing harm from the benefit design of Caremark-administered health plans, and any injunction changing that design cannot provide them any relief,”the companies said.

The remaining plaintiffs cannot seek any other remedy for their claims because their complaintalleged disparate impact discrimination, the motion said. Under the ACA, parties alleging disparateimpact discrimination can ask only for injunctive relief, according to the motion. If they wanted monetary damages, the plaintiffs would have had to allege intentional discrimination, the companies said.

The plaintiffs initially lodged a claim under the Americans with Disabilities Act alleging intentionaldiscrimination, but the court tossed that claim in 2018, finding that the case could proceed onlyunder the group’s disparate impact allegations, according to the motion.

The complaint’s claim under the UCL also cannot proceed because the plaintiffs cannot receiverestitution, the companies said. The group did not accuse the companies of any harm that can beremedied through equitable restitution because they did not allege that they personally paid higherout-of-network prices for medicines as opposed to purchasing them at in-network prices throughtheir less-preferred mail order method, the motion said.

Five anonymous patients filed the initial complaint in February 2018. They said mail-orderprescriptions are subject to delays or privacy concerns and, in being forced to use that method for in-network pricing, the patients are robbed of fostering a personal relationship with their communitypharmacist.

A federal judge tossed the suit in December 2018, but the Ninth Circuit revived it two years later,ruling the patients sufficiently alleged that the structure of CVS’ program is discriminatory because itprevents them from getting the same level of care that non-HIV/AIDS patients are able to receive.

“People living with HIV have suffered for years under CVS’s drug mail order program,” JerryFlanagan, who represents the patients, told Law360. “We believe that the court will agree that thecase should proceed as the Ninth Circuit previously directed it should.”

A representative of CVS did not immediately respond to a request for comment.

The employees are represented by Jerry Flanagan, Benjamin Powell and Daniel L. Sternberg ofConsumer Watchdog and Alan M. Mansfield, Joe R. Whatley Jr., Edith M. Kallas and Henry C. Quillenof Whatley Kallas LLP.

CVS Pharmacy is represented by Enu Mainigi, Craig D. Singer, Grant A. Geyerman, Sarah O’Connorand Benjamin W. Graham of Williams & Connolly LLP and John J. Atallah of Foley & Lardner LLP.

The case is Doe One et al. v. CVS Health Corp. et al., case number 3:18-cv-01031, in the U.S.District Court for the Northern District of California.

–Additional reporting by Patrick Hoff. Editing by Roy LeBlanc.

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