CVS Caremark facing class action suit for dropping coverage of Lilly's Zepbound

[CVS Health Caremark Corporate Office in Irving, Texas, USA.]
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A class action lawsuit has been filed against CVS Caremark (NYSE:CVS [https://seekingalpha.com/symbol/CVS]), the pharmacy benefit manager for health insurer Aetna, after it dropped Eli Lilly's (NYSE:LLY [https://seekingalpha.com/symbol/LLY]) weight loss med Zepbound (tirzepatide) from its covered formulary list and replaced it with Novo Nordisk's Wegovy (semaglutide).

The suit, filed Sept. 3 in federal court for the Southern District of New York, argues that the two drugs cannot be substituted.

"Because of their different methods of action, different clinical outcomes, and different side effects for individual patients, Zepbound and Wegovy are not clinically interchangeable," according to the complaint. “And as studies have proven, Zepbound is more effective than Wegovy in achieving weight loss, and only Zepbound has been proven effective and approved by the FDA for treating sleep apnea in patients with obesity."

CVS spokesman David Whitrap told Seeking Alpha that the suit "is without merit."

He added that a study based on real-world data released on Aug. 31 by Novo showed that Wegovy led to a 50% decrease [https://seekingalpha.com/news/4490637-novos-wegovy-beats-lillys-zepbound-heart-diseases] in serious heart issues such as stroke compared to Zepbound.

"Wegovy and Zepbound are two clinically similar products, and by forcing the drug manufacturers to compete with one another on price, CVS Caremark was able to unlock significant cost savings for the employers and unions that hire us to manage their pharmacy benefits," Whitrap said. "In addition to increasing affordability and access to this therapy class immediately, we anticipate that our formulary decision will encourage both Eli Lilly and Novo Nordisk to more aggressively compete with one another in the future and continue to lower the U.S. prices for their products."

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