By Melissa Angell, LAW 360
December 9, 2020
Law360 (December 9, 2020, 9:43 PM EST) -- The Ninth Circuit on Wednesday partially revived HIV patients' proposed class action alleging CVS Pharmacy's drug mail program discriminates against them, allowing the patients to pursue claims asserted under the Affordable Care Act but affirming the dismissal of other discrimination claims under the Americans with Disabilities Act.
A three-judge panel unanimously agreed that five patients with HIV and AIDS adequately alleged that the structure of CVS' program is discriminatory, because it prevents them from receiving the same level of care that non-HIV/AIDS patients regularly obtain when filling nonspecialty prescriptions.
"[The plaintiffs] have adequately alleged that they were denied meaningful access to their prescription drug benefit, including medically appropriate dispensing of their medications and access to necessary counseling," U.S. Circuit Judge Milan D. Smith Jr. wrote in the panel's opinion.
The ruling is the latest development in the suit by anonymous plaintiffs against CVS and employers Amtrak, Lowe's Cos. and Warner Media. The proposed class argues that their health plans are discriminatorybecause they provide in-network specialty medications solely through CVS Health Corp., which only offers patients mail and drop box delivery.
The plaintiffs argue that they preferred using community pharmacies where they'd built relationships with their pharmacists, and that there have been privacy and delivery issues with CVS, in addition to other inconveniences.
But CVS fired back, arguing that the proposed class failed to sufficiently plead discrimination based on their health status and that they were not deprived of meaningful access to their prescription benefits.
In 2018, U.S. District Judge Edward M. Chen ruled in favor of CVS and the employers, finding that the proposed class is not being discriminated against, because the health plan requires all specialty drugs to come from CVS Health Corp., and doesn't single out HIV and AIDS drugs specifically.
The proposed class appealed the decision in 2019. On Wednesday, the Ninth Circuit reversed Judge Chen's decision as to the ACA claims. The panel also vacated the proposed class' Unfair Competition Law claim that stems from the alleged ACA violation.
But the panel upheld Judge Chen's ruling dismissing the patients' claim that the program violated the ADA, finding that though the plan may require the patients to pay higher prices for specialty drugs at other pharmacies, the plan does not deny the patients access to those locations.
"Because [the plaintiffs] have not plausibly alleged that their benefit plan is a place of public accommodation, they cannot maintain a claim of discrimination under the ADA," the opinion said.
Counsel for the consumers praised the panel's decision on Wednesday.
"This decision is an important victory for HIV patients who sought to vindicate their health care rights and obtain their life-sustaining medications in [a] medically-appropriate manner," said Jerry Flanagan, litigation director of Consumer Watchdog.
Counsel for Amtrak told Law360 that they are pleased that the Ninth Circuit has affirmed the dismissal of the claims against Amtrak.
Counsel and representatives for Warner Media, Lowe's and CVS did not immediately respond to requests for comment.
U.S. Circuit Judges Milan D. Smith Jr. and Andrew D. Hurwitz, and U.S. District Judge Timothy M. Burgess by designation, sat on the panel for the Ninth Circuit.
The patients are represented by Jerry Flanagan of Consumer Watchdog. CVS is represented by Craig Singer of Williams & Connolly LLP.
Amtrak is represented by Sean K. McMahan, Brian W. Shaffer and Elise M. Attridge of Morgan Lewis & Bockius LLP .
Lowe's is represented by Phillip J. Eskenazi and Kirk A. Hornbeck of Hunton Andrews Kurth LLP. Warner Media is represented by Michael Bernstein and Jean E. Tomasco of Robinson & Cole LLP.
The case is Doe One et al. v. CVS Health Corp. et al., case number 19-15074, in the U.S. Court of Appeals for the Ninth Circuit.
--Additional reporting by Dani Kass and Craig Clough. Editing by Nicole Bleier.