News Summary
Louisiana has moved to diversify its pharmacy benefit management by transitioning one of its major contracts away from CVS Health while retaining a significant Medicare Part D contract. The state has partnered with Southern Scripts to manage commercial insurance plans, addressing concerns over CVS’s practices that have negatively impacted independent pharmacies. The new agreements aim to increase transparency in drug pricing and enhance access for state employees and their families. The shift comes amid criticism of CVS from lawmakers and independent pharmacists regarding reimbursement rates and potential service access issues.
Louisiana has transitioned one of its two major pharmacy benefit contracts for state employees away from CVS Health, while still retaining a more lucrative contract with the same company. Governor Jeff Landry and state lawmakers decided to maintain a contract with CVS Health for managing Medicare Part D prescription plans. This contract with SilverScript, a CVS Health affiliate, is valued at $748.8 million. Meanwhile, the state Office of Group Benefits will now work with two pharmacy benefit managers (PBMs) to service health insurance plans for state employees, public school teachers, local government workers, retirees, and their families.
The new PBM partnership includes Southern Scripts, owned by Louisiana-based Liviniti LLC, which has been awarded a contract worth $390.6 million to manage commercial insurance plans. These contracts have been established on an emergency basis for the year 2026, with an option for extensions into 2027. The state is optimistic about achieving increased transparency in drug pricing through these new agreements.
Previously, Louisiana exclusively used CVS Caremark, a subsidiary of CVS Health, for its pharmacy benefit management services. The shift in providers comes in response to ongoing criticism directed toward CVS Caremark from Louisiana lawmakers regarding the company’s practices that allegedly hinder independent pharmacies from adequately serving the approximately 212,000 individuals covered by state health insurance.
Independent pharmacists have voiced concerns that PBMs such as CVS favor chain pharmacies owned by the parent companies, ultimately burdening smaller, independent operations with undercut reimbursement rates. CVS Health currently owns over 100 pharmacy locations across Louisiana.
The initiation of a partnership with Liviniti aims to allow independent pharmacists to play a more significant role in providing services to those enrolled in commercial state health insurance plans. The Louisiana Independent Pharmacies Association expressed support for the contract with Liviniti shortly before it gained legislative approval.
As lawmakers deliberated on the new contracts, challenges in divesting from CVS emerged. Concerns were raised about potential financial savings and the difficulty in identifying a Medicare Part D manager that was independent of CVS, attributed to federal regulations limiting negotiation flexibility. Tensions also arose between Governor Landry and the Louisiana Senate regarding a proposed law that would prevent pharmacy benefit managers from owning pharmacies within the state. The Senate ultimately rejected the proposed ban, indicating the need for further study.
During this legislative process, CVS engaged in a mass texting campaign aimed at Louisiana residents, cautioning them about potential loss of access to medications if the proposed law was enacted. This campaign sparked legal actions from Attorney General Liz Murrill, who accused CVS of misusing customer information and leveraging corporate power to inflate drug prices.
The lawsuits filed against CVS seek injunctive relief, civil penalties, and restitution, drawing attention to CVS’s practices that have contributed to economic distress for independent pharmacies. The allegations against CVS highlight concerns over systematic under-reimbursement of these independent operations and unethical pricing practices.
The shift in pharmacy benefit managers underscores Louisiana’s focus on fostering a more equitable drug pricing landscape while navigating the complexities of the healthcare system. By employing two PBMs, the state hopes to improve access for its employees and their families while mitigating the influence of larger chain pharmacies.
Deeper Dive: News & Info About This Topic
- Louisiana Illuminator
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- Fierce Healthcare
- Reuters
- Wikipedia: CVS Health
- Google Search: Louisiana CVS lawsuit
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- Encyclopedia Britannica: Louisiana pharmacy benefit managers
- Google News: CVS Louisiana
Author: STAFF HERE NEWORLEANS WRITER
NEW ORLEANS STAFF WRITER The NEW ORLEANS STAFF WRITER represents the experienced team at HERENewOrleans.com, your go-to source for actionable local news and information in New Orleans, Orleans Parish, and beyond. Specializing in "news you can use," we cover essential topics like product reviews for personal and business needs, local business directories, politics, real estate trends, neighborhood insights, and state news affecting the area—with deep expertise drawn from years of dedicated reporting and strong community input, including local press releases and business updates. We deliver top reporting on high-value events such as French Quarter Festival, New Orleans Jazz & Heritage Festival, and Essence Music Festival. Our coverage extends to key organizations like the New Orleans Chamber of Commerce and Greater New Orleans, Inc., plus leading businesses in energy, healthcare, and education that power the local economy such as Entergy, Ochsner Health, and Tulane University. As part of the broader HERE network, including HEREShreveport.com, we provide comprehensive, credible insights into Louisiana's dynamic landscape.
