University of Michigan Sues CVS Over 340B Drug Discount Profits

CVS Health Corp. made illegal profits of $66 million since 2020 on prescription drugs sold through the federal 340B drug discount program, the University of Michigan Hospitals and Health Centers said in a lawsuit filed Monday in federal court.

The 340B program requires drugmakers participating in Medicare and Medicaid to sell their medications at deeply discounted prices to certain hospitals and their contracted pharmacies, including those serving higher numbers of low-income patients. But critics say the program’s lax guardrails have led to abuses, and drugmakers are trying to limit participation.

The case underscores the complex, opaque nature of the 340B ...