Larkin v. Caremark RX, L.L.C.: A case study in ERISA compliance

In revisiting the recent class action lawsuit (Larkin v. Caremark RX, L.L.C.) against one of the country’s most prominent PBMs, CVS Caremark, David Ostrowsky explores how PBMs’ decisions favoring one medication over another due to cost differences can trigger ERISA litigation if participants believe their benefits were improperly denied. By scrutinizing PBM agreements and formulary management practices, plan sponsors and TPAs can make sure any coverage exclusions or changes for high-priced drugs, such as GLP-1s, are backed by plan language and clinical rationale.