By Jacklyn Will, BLOOMBERG LAW
August 8, 2022
HIV/AIDS patients who object to a CVS Pharmacy Inc. policy limiting where they can receive specialty medications advanced their lawsuit when a California federal judge said the company’s subsidiaries were likely subject to the Affordable Care Act’s rules prohibiting discrimination.
The patients adequately alleged that the CVS defendants receive the federal funding necessary to make them subject to the nondiscrimination rules of the ACA, Judge Edward M. Chen of the US District Court for the Northern District of California said in an Aug. 5 opinion. Section 1557 of the ACA “broadly applies” to any health program or activity in which any component part or operation receives federal financial assistance, Chen said.
CVS’s “operations” should be broadly interpreted to include the defendant subsidiaries in this case, Chen said, citing a 2021 opinion from a federal court in Indiana. He added that the result would be the same if he applied the “more narrowly worded” civil rights statutes referenced in the ACA.
“To permit the CVS entities to escape responsibility as a result of the establishment of corporate structures which cabin their functions would exalt form over substance, and would be antithetical to the overarching purpose of the anti-discrimination provision of the ACA,” he said.
The potential class action challenges a CVS policy that requires HIV/AIDS patients to receive their specialty medications at a CVS pharmacy or through the mail, instead of at non-CVS “community pharmacies,” in order to receive discounted, in-network prices. This limitation, which allegedly deprives patients of in-person counseling from expert pharmacists and jeopardizes the quality of their medication, disproportionately affects patients with HIV/AIDS due to the nature of their medication regimens, according to the lawsuit.
Chen dismissed the lawsuit in 2018, but the US Court of Appeals for the Ninth Circuit later revived the patients’ claims of discrimination under the ACA, saying the patients had adequately alleged that they were uniquely burdened by the challenged policy because of their health conditions.
The patients are represented by Whatley Kallas LLP and Consumer Watchdog. The CVS defendants are represented by Williams & Connolly LLP and Foley & Lardner LLP.
The case is Doe v. CVS Pharm., Inc., 2022 BL 273018, N.D. Cal., No. 3:18-cv-01031, 8/5/22.
To contact the reporter on this story: Jacklyn Wille in Washington at [email protected]