RI AG not pursuing criminal charges despite RICO allegations in lawsuit against CVS

PROVIDENCE, R.I. — Rhode Island Attorney General Peter Neronha is not pursuing criminal charges against CVS Health, even as a newly filed federal lawsuit alleges the company engaged in racketeering activity tied to its pharmacy benefit management operations.

The civil case, filed in U.S. District Court in Rhode Island, includes claims that CVS operated a scheme involving hidden agreements with drug manufacturers that influenced prescription pricing and access. The complaint repeatedly references alleged violations of the Racketeer Influenced and Corrupt Organizations Act (RICO).

The complaint alleges that CVS, through its Caremark pharmacy benefit manager program, entered into undisclosed agreements with drug manufacturers that influenced which medications received preferred placement on formularies. According to the filing, those arrangements involved payments that may have affected drug selection and led to higher costs for plan participants, including members of the roofers union, which is part of the class.

The complaint also references Zinc, a pharmacy benefit manager cited in a 2024 Federal Trade Commission report. The report found that a small group of PBMs, including Zinc, control most prescriptions in the United States, raising concerns about market concentration and pricing power.

Shekarchi part of legal team behind lawsuit

Speak of the House, K. Joseph Shekarchi is serving as local counsel in the case, representing a national union as a private attorney.

The lawsuit was brought on behalf of the Roofers’ Unions Welfare Trust Fund and is part of a broader class action effort involving national law firms.

Allegations center on PBM practices

At the heart of the case are pharmacy benefit managers, or PBMs, which act as middlemen between insurers, drug manufacturers and pharmacies.

The lawsuit alleges CVS’s Caremark division concealed financial arrangements with drug companies that affected which medications were favored, potentially driving up costs for consumers.

A 2024 report from the Federal Trade Commission found that a small number of PBMs control the vast majority of prescriptions in the United States, raising concerns about transparency and competition.

Civil case moves forward without criminal action

While the lawsuit lays out detailed allegations of misconduct, it remains a civil matter. There has been no indication that the attorney general’s office is pursuing a criminal investigation related to the claims.

Potential motive behind RI AG not pursuing

Rhode Island Attorney General Peter Neronha recently voiced support for Rhode Island gubernatorial candidate Helena Foulkes, a former CVS executive, and the lack of charges has raised questions about whether that support may be a factor.