Louisiana Sues CVS Over Alleged Data Misuse, Drug Price Manipulation, and Market Abuse

Louisiana has filed three lawsuits against CVS Health Corporation, accusing the mega-pharmacy of deceptive marketing, misuse of customer data, and exploiting its dominant position to drive up drug prices and squeeze independent pharmacies.

On June 11, CVS sent mass text messages to thousands of Louisiana residents—including state employees and even the governor’s wife—warning that a proposed law would result in pharmacy closures and higher medication costs. The texts urged recipients to lobby against legislation that would prohibit pharmacy benefit managers (PBMs) like CVS from owning retail pharmacies. Louisiana Attorney General Liz Murrill contends CVS abused customer information and violated state trade laws by delivering what she terms “unfair or deceptive acts.” One lawsuit seeks injunctive relief, civil penalties, and restitution on that basis. CVS maintains the texts were legal and aimed at alerting customers to potential disruptions in care.

Two additional lawsuits allege CVS is leveraging its integrated business structure—combining CVS Pharmacy, CVS Caremark (the PBM), and Aetna insurers—to manipulate drug pricing and restrict competition. Citing an FTC report, authorities say CVS handles roughly 80% of U.S. pharmacy claims, enabling it to inflate costs and disadvantage independent pharmacies. One suit claims CVS systematically under-reimburses independent Louisiana pharmacies—resulting in economic hardship—while routing patients toward CVS-owned outlets. Murrill alleges the PBM imposes “unethical, unscrupulous, and exorbitantly high fees” to maintain control over prescriptions. Another lawsuit focuses on CVS’s reliance on spread pricing and high-rebate brand drugs that artificially raise medication costs for both Louisiana's public health system and individual consumers.

In response, CVS asserts its vertically integrated model delivers better access and affordability, arguing that excluding CVS pharmacies from networks could cost the state more than $4.6 million. The company says major independent pharmacies are less efficient, and that its structure allows it to keep costs lower for consumers and government programs.

Republican Governor Jeff Landry called CVS’s text campaign an abuse of power. Although the legislation aiming to ban PBMs from owning pharmacies fell short, Landry vowed to revive it and convene a working group—including AG Murrill—to pursue executive and legislative remedies. A related measure, House Bill 264, requiring PBM transparency and patient savings pass-through, was passed and awaits the governor’s signature.

This legal action in Louisiana adds to growing nationwide scrutiny of PBMs and vertical integration in healthcare. In 2024, the FTC explicitly warned that dominant players like CVS Caremark and Express Scripts inflate drug costs and disadvantage independent pharmacies. Several states—including Arkansas—have already enacted laws that restrict or prohibit PBMs from owning pharmacies.

CVS Health’s business model—particularly its Aetna, Caremark, and pharmacy operations—has prompted antitrust opposition from entities such as the American Medical Association and regulatory bodies citing reduced competition and consumer harm.

The lawsuits seek legal injunctions to curb CVS’s alleged misconduct, restitution to affected consumers and pharmacies, and civil penalties for violating Louisiana state law. CVS has denied all allegations, insisting it lawfully communicated risks to patients and that appeals to lawmakers are within its rights. Meanwhile, Louisiana officials are preparing for both courtroom battles and potential legal reforms aimed at reining in integrated PBMs.

As the cases unfold, they may provide a bellwether for how states regulate large vertical healthcare entities—and whether separation of PBMs and pharmacies will become the new norm.