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CVS Is Facing Breach Of Contract Lawsuit


June 11, 2013
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CVS Caremark Corp. and Cardinal Health Inc. are facing a breach of contract lawsuit brought by Savient Pharmaceuticals Inc.

The drug maker alleges that CVS improperly attempted to return for credit hundreds of opened bottles of specialty drugs through Cardinal. Savient’s New Jersey breach of contract lawsuit contends that CVS and Cardinal Health violated Savient’s drug return policy, which states that retailers will receive a credit at 90 percent of the wholesale acquisition cost for all valid returns.  In this case, Savient maintains that CVS has refused to pay an unpaid balance of $1.35 million and improperly requested that the returns of opened bottles be applied to the outstanding amount. “CVS has attempted to leverage its profile as one of the largest retail drug pharmacies in the United States in order to force Savient to sustain the losses associated with these improper returns,” the complaint states. “As a result, defendants have not paid Savient for the drug products that Cardinal Health purchased on CVS’ behalf and for CVS’ benefit.” “By active participation, aid or encouragement, the actions of CVS and Cardinal Health constitute a common plan or design to commit a tort upon Savient: to wit, returning or attempting to return opened or partial bottles of Oxandrin in violation of Savient’s Drug Return Policy,” the complaint says. “CVS and Cardinal Health have engaged in this wrongful conduct for their benefit and to the detriment of Savient.” As this case highlights, contract provisions and practices concerning returns may merit special attention.  Lawyers may assist in attempting to clarify intentions and reduce the likelihood of misunderstandings and potential litigation. If you have any questions about this case or would like to discuss the legal issues involved, please contact me, Charles Yuen, or the Scarinci Hollenbeck attorney with whom you work.