COLUMBUS, Ohio (Legal Newsline) - Things are getting real for Kroger as it defends itself against a class action lawsuit brought by a woman who did not enroll in its savings club but still wanted discounts on pharmaceuticals.
An Ohio federal judge already rejected Kroger's motion to dismiss the case and now, plaintiff lawyers are asking him to certify classes consisting of Ohio and Texas residents. If Judge Algenon Marbley does so, the litigation will get even more expensive for Kroger.
Kroger is one of many to face such a case, with CVS having won at trial and at least 10 others having proceeded past the defendant’s motion to dismiss.
“Kroger urges the court to reject those ‘other U&C cases’ because they ‘were based on different laws and different facts pled,’” Judge Marbley wrote in 2022.
“Kroger is correct in one regard: none of those cases controls the outcome here. Still, Kroger underestimates the persuasive value of similar allegations tested, and mostly sustained, in district courts across the country."
The case, filed in January 2021, concerns the prices Kroger charges health insurers for generic drugs. Plaintiff Judy Kirkbride says Kroger charges insurers for “usual and customary” prices when it should have accounted for lower prices paid through its Rx Savings Club.
The result for customers is inflated copays. The complaint says most customers enroll in the Savings Club, which costs $36 per year, because the discounts are so attractive, which makes the Savings Club price the actual “usual and customary” price it should report to insurers.
One named plaintiff only alleges a $1.97 overcharge on one purchase, but others allege much higher per-transaction overcharges on dozens of purchases.
The classes proposed would be Ohioans with Medicare and Caremark insurance who paid more for a prescription drug than what the Rx Savings Club price was. The Texas classes would be those who have Caremark and Express Scripts insurance.
Scott Simpkins of Climaco Wilcox in Cleveland is pursuing the case, along with Joshua Arisohn of Bursor & Fisher and Joel Smith of Smith Krivoshey.
"It is a governing principle in the pharmaceutical industry that insured customers should not pay more for prescription drugs than cash customers," they wrote April 2.
"Otherwise, they would receive no benefit from using insurance, and instead would be penalized for using insurance."