U.S. Supreme Court to hear HIV case with implications for Ohio, elsewhere

It’s a practice that’s already been called anti-competitive. Now the U.S. Supreme Court could rule on whether it discriminates against the disabled.

The court last week agreed to review a case focused on whether actions of insurers and pharmacy middlemen discriminate against people with HIV, the virus that causes AIDS. 

The case is on appeal from the 9th U.S. Circuit Court of Appeals in San Francisco, but it could have implications far beyond California. The question is whether a program has to intend to disadvantage a disabled group for it to constitute discrimination, or if it’s enough to merely show that a program has that effect. 

The Supreme Court could use the case to clear up a conflict between the California ruling and one by the 6th U.S. Court of Appeals in Cincinnati in 2019. That decision involves a case out of Western Tennessee.

And, if the pharmacy practice is ruled to be unlawfully discriminatory, it could threaten an Ohio Department of Health program that has caused controversy in the past.

At issue is whether it’s proper for huge corporations such as CVS to use their role as pharmacy benefit managers to force patients to buy their most expensive drugs from mail-order pharmacies that the corporations also own. CVS Health, for example, owns CVS Caremark and CVS Pharmacy, the nation’s largest pharmacy benefit manager and largest retailer, respectively.

As a pharmacy benefit manager, or PBM, CVS Caremark contracts with insurers to handle drug benefits for millions of patients and it negotiates big rebates from drugmakers in exchange for covering their products on behalf of those patients. And it reimburses the pharmacies that dispense the drugs.

When it comes to expensive “specialty” drugs, in California, Ohio and other states, CVS is often reimbursing itself. That’s because under some plans, CVS will only cover HIV and other drugs if patients buy them from CVS, and often then only through its mail-order specialty pharmacy.

The California suit, filed on behalf of four anonymous HIV patients, argues that the service from mail-order pharmacy is greatly inferior to that at a community pharmacy, so CVS’s practice of making such patients use it discriminates against them based on their disability.

The Ninth Circuit in December ordered a lower court to reopen the case, and CVS is appealing that to the Supreme Court.

“This program threatens HIV/AIDS patients’ health and privacy,” the lawsuit says. “If HIV/AIDS patients in those plans do not obtain their HIV/AIDS medications from (the CVS mail-order pharmacy), then they must either pay more out-of-pocket or pay full-price with no insurance benefits whatsoever — thousands of dollars or more each month — to purchase their medications at an in-network community pharmacy where they can receive counseling from a pharmacist and other services they may need to stay alive.”

CVS didn’t respond to a request for comment Tuesday, but complaints about mail-order pharmacy are nothing new.

Community pharmacists say that by forcing patients to their own specialty pharmacies, PBM giants CVS, Express Scripts and OptumRx are engaging in an anti-competitive practice that drives community pharmacies out of business.

Meanwhile, cancer and AIDS patients have complained of waiting weeks for lifesaving drugs to come through the mail — even though they’re often readily available at the clinics where they get their care. And they say there are often problems with their prescriptions.

“I got an empty bottle of Truvada,” said Columbus AIDS activist Eddie Hamilton. “There were no pills in it.”

Hamilton was referring to the Ohio HIV Drug Assistance Program, which uses federal Ryan White dollars to pay for expensive HIV drugs such as Truvada. Similar to the California complaint, the Ohio program contracts with CVS Caremark, which requires patients to get drugs at CVS pharmacies, often its mail-order specialty pharmacy.

The program has had other problems.

The Ohio Department of Health said CVS improperly handled patient information in 2017 when it sent a mailing to program participants with the letters “HIV” just above patients’ names in the envelope window. It could have outed up to 6,000 program participants, but the department did little to punish CVS.

Asked whether the health department was concerned that the California case headed to the Supreme Court could invalidate the department’s arrangement with CVS, spokeswoman Alicia Shoults said, “The Ohio Department of Health doesn’t comment on pending cases.”

In asking the high court to take up the case, CVS wants it to resolve differences between the opinion handed down by the appellate court in San Francisco and the one handed down in Cincinnati a few years earlier.

That case involved many of the same plaintiffs’ lawyers as in the California suit. They sued Blue Cross and Blue Shield of Tennessee, arguing that it was discriminating against HIV patients by forcing them to get their medicine through Express Scripts’ mail-order specialty pharmacy, Accredo.

CVS’s lawyers said the argument is about whether people can sue under the Rehabilitation Act of 1973 not because a health program is intended to discriminate against a disabled group, but simply because it has that effect, or a “disparate impact.”

“This Court’s intervention is especially warranted because the Ninth Circuit divided from the Sixth Circuit on substantially identical facts,” CVS’s brief to the Supreme Court said. “The same law firms advanced the same legal theories on behalf of identically situated plaintiffs against nationwide companies in each of these circuits. Yet those courts reached polar opposite results.”