Who's Pocketing the Savings? The CVS 340B Lawsuit and What It Means for Patients

The 340B program exists to help safety-net hospitals and clinics serve low-income and uninsured patients. But when savings meant to reach patients never arrive, patients lose out on care.

That's exactly what three major health systems are now claiming in federal court.

Hospitals owned by Mount Sinai, the University of Michigan Health and the University of Kansas sued CVS Health this week for allegedly stealing hundreds of millions of dollars in 340B savings. The lawsuits allege CVS diverted about $250 million from 2020 to 2025.

According to the lawsuit, CVS' third-party administrator flagged drug claims as eligible for 340B weeks after the drugs were sold, and after insurers already reimbursed CVS at full network rates. CVS' PBM and its pharmacies then allegedly lowered how much hospitals are reimbursed and kept the resulting "spread" as profit. As the Michigan hospitals' lawsuit puts it, "these affiliated entities work together behind the prescription drug transaction to secretly manipulate the 340B reimbursement rate while concealing their scheme."

The PBM Accountability Project has long documented how PBMs exploit the 340B program. Nearly 70% of 340B contract pharmacies are associated with a PBM, and PBM-controlled pharmacies are estimated to have siphoned away $2.58 billion in 340B savings in 2022 alone, capturing profit margins 3 to 4 times higher than in the commercial market. 

The CVS lawsuit is a textbook example of that dynamic.

Patients in rural and underserved communities should pay no more than is absolutely necessary for their medicines. When PBMs and other insurer middlemen pocket savings meant for vulnerable patients, that's not a technicality. It's a betrayal of the system's purpose. It's time for transparency, structural reform and enforcement with real teeth.

Learn more at pbmaccountability.org