CVS Caremark Promised to Lower Your Drug Costs. A New Lawsuit Says It Was Secretly Taking Kickbacks Instead

A union welfare fund filed a federal class action in March 2026 accusing CVS Health and its pharmacy benefit manager, CaremarkPCS Health, of running a hidden pay-to-play scheme with drug manufacturers. The lawsuit claims Caremark sold preferred spots on its drug formulary — the list that determines which medications your health plan actually covers — in exchange for billions of dollars in payments routed through a CVS-owned subsidiary called Zinc Health Services. This is a litigation-phase article. No settlement exists yet.

Field	Detail
Defendant	CaremarkPCS Health LLC and CVS Health Corp.
Plaintiff	Roofers’ Unions Welfare Trust Fund
What’s Alleged	RICO racketeering, breach of contract, formulary manipulation for kickbacks
Subsidiary at Center	Zinc Health Services (created March 2020)
Legal Claims	RICO Act, breach of contract, breach of implied covenant of good faith
Case Filed	March 18, 2026
Court	U.S. District Court for the District of Rhode Island
Case Number	1:26-cv-00162
Settlement Status	None — active litigation only
Class Counsel	Bernstein Litowitz Berger & Grossmann LLP

Where things stand: The complaint was filed March 18, 2026. No class has been certified, no trial date has been set, and no settlement discussions have been reported. CVS has publicly denied the allegations and stated it will defend itself aggressively. This case is in its earliest stage.

How a Company That Promised to Lower Drug Costs Allegedly Built a Billion-Dollar Kickback Machine

Pharmacy benefit managers — PBMs — sit between your health insurance plan and the drugmakers. Their job, at least officially, is to negotiate lower drug prices on your behalf, decide which medications land on your formulary, and pass the savings back to health plans and their members.

CaremarkPCS and CVS falsely described Zinc as a “group purchasing organization” and delegated to Zinc the responsibility for negotiating terms with drug companies — the primary role for which customers hired CaremarkPCS. But according to the lawsuit, Zinc wasn’t negotiating on behalf of patients. It was collecting money from drug manufacturers in exchange for getting their products onto Caremark’s formulary.

Those payments were allegedly labeled as service fees but functioned as kickbacks tied to favorable placement of drugs on formularies. The result, plaintiffs claim, is that higher-cost brand-name drugs got preferred access while cheaper alternatives were pushed out — and health plan members paid the difference every time they filled a prescription.

CVS flatly denied the allegations. A company spokesperson stated it “strongly disagrees with the allegations in this lawsuit and believes they are without merit,” adding that CVS Caremark is committed to lowering prescription drug costs and will vigorously defend against these claims.

The Zinc Playbook: How the Alleged Scheme Actually Worked

Understanding this case requires understanding one thing most consumers have never heard of: Zinc Health Services.

Caremark steered drugmakers to make large payments to Zinc — described in the filing as a group purchasing organization created in 2020 — rather than securing higher rebates for clients. On paper, Zinc looked like a legitimate purchasing intermediary. In practice, the lawsuit alleges it was a mechanism to collect money that should have flowed back to health plan members as rebates.

Instead of negotiating on behalf of PBM customers, the defendants allegedly disguised billions of dollars in payments by drug companies to Zinc by falsely describing the payments as various “fees.” In truth, according to a former CaremarkPCS executive cited in the class action complaint, “It was all on paper and it was all transactional money flowing through contracts… it was access to the formularies.”

Nearly every major drug company participated in the scheme, plaintiffs allege, including AbbVie, Amgen, AstraZeneca, Bayer, Bristol-Myers Squibb, Boehringer Ingelheim, Eli Lilly, Gilead Sciences, Johnson & Johnson, Merck, Novartis, Novo Nordisk, Pfizer, and Sanofi.

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Who Filed This Lawsuit — and Who Might Be in the Class

The named plaintiff is the Roofers’ Unions Welfare Trust Fund, which administers prescription drug benefits for members of Local 11 of the Roofers, Waterproofers and Allied Workers union. The trust fund paid billions annually to Caremark to manage prescription drug benefits for millions of members, and claims Caremark promised to pass through more than 98% of rebates to customers while retaining just over 1% for itself.

The proposed class would extend far beyond roofers. It targets any employer, union, or health plan that used CaremarkPCS as their pharmacy benefit manager during the period covered by the alleged scheme, which the complaint dates from March 2020 — when Zinc was established — through the present.

If your employer or union health plan uses CVS Caremark as its PBM, you may be in the potential class. However, the court has not yet certified a class, and individual consumers who filled prescriptions are not the direct plaintiffs here — the lawsuit is brought on behalf of the health plans that contracted with Caremark, not individual members.

RICO: Why This Lawsuit Is More Than a Breach of Contract Claim

Most contract disputes stay in state court and seek money damages. This lawsuit is different. Plaintiffs filed under the Racketeer Influenced and Corrupt Organizations Act — RICO — a federal law originally designed to prosecute organized crime.

RICO allows plaintiffs to claim treble damages, meaning if a court finds the defendants liable, it could award three times the actual losses. It also allows claims based on a “pattern of racketeering activity,” which is what plaintiffs allege the Zinc scheme represents: a systematic, ongoing operation to extract money from health plans through wire fraud and other predicate acts.

Both the CaremarkPCS case and a similar case filed against Express Scripts, Cigna, and Evernorth accuse defendants of violating the Racketeer Influenced and Corrupt Organizations Act and breaching their contractual obligations to PBM customers. The parallel cases, filed by the same law firm weeks apart, suggest a coordinated legal strategy targeting the entire PBM industry’s use of these payment structures.

This Isn’t Just One Lawsuit — It’s Part of a Wider Reckoning With PBMs

The alleged scheme dates back to March 2020, when Zinc was established, and continues to the present. Plaintiffs also point to ongoing scrutiny of pharmacy benefit managers by regulators and lawmakers, citing investigations by the Federal Trade Commission, state officials, and congressional committees.

Congress has held multiple hearings on PBM practices in recent years. The FTC launched a broad study of PBM business models in 2022. Caremark, Express Scripts, and OptumRx — the three dominant PBMs — collectively process the majority of U.S. prescription drug claims, which means any systemic wrongdoing would affect tens of millions of Americans.

The lawsuit against CVS is one of the most prominent individual actions to emerge from this broader scrutiny, and it carries the weight of Bernstein Litowitz Berger & Grossmann — one of the country’s most prominent class action litigation firms — behind it.

Key Dates in This Case

Milestone	Date
Zinc Health Services established	March 2020
Alleged scheme begins	March 2020
Class action complaint filed	March 18, 2026
Court: U.S. District Court, District of Rhode Island	Active
Class certification	TBD
Trial date	TBD
Settlement	None

Frequently Asked Questions

Do I need a lawyer to join this lawsuit? 

Not at this stage. No claims process exists yet because no settlement has been reached. If the case certifies a class and reaches a settlement, class members will receive notice and instructions. For now, the lawsuit proceeds without individual consumers taking action.

Is this lawsuit legitimate? 

Yes. The case is Roofers’ Unions Welfare Trust Fund v. CaremarkPCS Health LLC, et al., Case No. 1:26-cv-00162, filed in the U.S. District Court for the District of Rhode Island. It was filed by Bernstein Litowitz Berger & Grossmann LLP, a firm with a decades-long track record in major class action litigation. CVS denies the allegations.

When will I receive any payment? 

There is no payment timeline to report. This lawsuit was just filed in March 2026 and has not reached settlement negotiations, let alone a resolution. RICO class actions of this complexity typically take several years to resolve.

What if I missed the claim deadline?

 There is no claim deadline because there is no settlement. No action is required from individual consumers at this time. If a settlement is reached in the future, class members will be notified.

Will any settlement payment affect my taxes? 

That question is premature. If this case reaches a settlement and you receive a payment, consult a tax professional about how it may be treated, as the answer depends on the structure of any eventual resolution.

I’m covered by a Caremark plan — does this lawsuit affect my coverage now?

 No. Your prescription drug coverage continues under whatever plan your employer or union has arranged. This lawsuit challenges the financial arrangements between Caremark and drug manufacturers, not the coverage terms individual members experience day to day.

What exactly is a drug formulary and why does it matter?

 A formulary is the official list of medications your health plan covers. Your PBM — in this case Caremark — decides which drugs make the list, which tier they land on, and how much you pay. The lawsuit alleges Caremark sold those placement decisions to drugmakers rather than building the formulary based on clinical merit and cost, which directly affects what members pay at the pharmacy counter.

What is RICO, and why is it being used here? 

RICO — the Racketeer Influenced and Corrupt Organizations Act — is a federal law that allows plaintiffs to sue for treble damages when they can show a systematic, ongoing pattern of fraudulent conduct. Plaintiffs chose it here because they allege the Zinc scheme wasn’t a one-time mistake but a deliberate, structured operation running for years across hundreds of drug manufacturer relationships.

Sources & References

1. Class action complaint: Roofers’ Unions Welfare Trust Fund v. CaremarkPCS Health LLC et al., Case No. 1:26-cv-00162, U.S. District Court for the District of Rhode Island

Last Updated: April 3, 2026

Disclaimer: This article is for informational purposes only and does not constitute legal advice. Legal claims and outcomes depend on specific facts and applicable law. For advice regarding a particular situation, consult a qualified attorney.