A new report from the House Judiciary Committee alleges that CVS Health may have violated antitrust laws by preventing independent pharmacies from tapping into alternative pharmacy-hub options.
The report, released last week as major health insurance executives were questioned for hours before two House panels, is born from a committee investigation launched in September 2024 into whether pharmacy benefit managers are stifling competition.
Based on documents provided to the committee as part of this probe, the committee found that CVS was looking to significantly ramp up its investment in digital pharmacy and believed it needed to compete strongly in the hub pharmacy space. The company then closely studied this space and adjusted its network policies in a bid to prevent independent pharmacies from working with competitors, per the report.
The report also found that CVS sent cease-and-desist letters to independent pharmacies as part of this effort and leaned on the scale of its pharmacy network to box out competitors.
"Faced with the Committee's investigation, CVS Health backed down and allowed independent pharmacies to work with one hub," according to a committee press release. "It is possible that CVS Health's conduct violated the antitrust laws."
"CVS Health's own CEO characterized his company's actions best by writing: 'another example of a large PBM not allowing the small guys to compete,'" per the press release.
The panel notes that existing antitrust laws may not be sufficient to account for new technological innovations and that Congress may need to pursue legislative change to fully promote competition in the pharmaceutical space.
A spokesperson for CVS Health called the report "misguided, misleading and inaccurate," and said that the PBM has an obligation to its customers to monitor partners for behaviors that contribute to fraud, waste and abuse. The company also updated its policies last year to make it easier for pharmacies to use hubs, in a move that did not apply to a specific, single hub, the spokesperson said.
"CVS Caremark works to make prescription drugs more affordable in the United States, while ridding the pharmaceutical supply chain of potential fraud, waste, and abuse," the spokesperson said. "We are not opposed to pharmaceutical hubs or other innovative models that improve the patient experience."