From fighting new state legislation in court to defending itself against hospital lawsuits, CVS Health is navigating a turbulent stretch.
Here’s a look at what’s happening:
Tennessee pharmacy law sparks federal lawsuit
CVS Health has filed a federal lawsuit challenging Tennessee’s newly signed Freedom, Access and Integrity in Registered Pharmacy Act, known as the Fair Rx Act. The complaint, filed May 22 in the U.S. District Court for the Middle District of Tennessee, alleges the law unconstitutionally favors in-state businesses over out-of-state competitors, conflicts with federal rules governing employer health plans and Medicare, and amounts to an unconstitutional taking of property. CVS is asking the court to strike down the law and permanently block it from taking effect.
Gov. Bill Lee signed the legislation May 22, making Tennessee the second state to ban PBMs from owning pharmacies. CVS had warned throughout the legislative process that the law could force the closure of all 134 of its Tennessee locations. The company estimates the law puts $3.7 billion in annual Tennessee revenue at risk and would result in more than $400 million in asset write-offs.
Three health systems sue over 340B drug savings
Mount Sinai Health System, Michigan Medicine and the University of Kansas Health System have each filed federal lawsuits against CVS Health, alleging the company and several affiliates improperly diverted roughly $250 million in savings generated through the 340B drug pricing program. The suits name CVS Health, CaremarkPCS Health, Caremark, CVS Specialty and WellPartner as defendants. The complaints allege CVS Health retained savings tied to 340B specialty drug claims that should have been passed through to the hospitals — conduct the health systems say occurred between 2020 and 2025.
CVS sells Omnicare for $250 million
CVS Health secured court approval to sell its long-term care pharmacy subsidiary, Omnicare, to GenieRx, a partnership between a private investment firm and a healthcare investment and management firm, for $250 million in cash. CVS had originally acquired Omnicare in 2015 for nearly $13 billion. The subsidiary had faced a federal fraud lawsuit in 2019 alleging it billed Medicare, Medicaid and Tricare for drugs lacking valid prescriptions, and later paid a $15.3 million settlement related to opioids and other controlled substances.
CVS and WGU launch pre-pharmacy degree program
CVS Health has partnered with Western Governors University to launch a fully online associate degree program designed to help address pharmacist workforce shortages. The “Associate of Science-Health Science, Pre-Pharmacy” program is aimed at CVS employees looking to complete prerequisites for Doctor of Pharmacy programs at a reduced cost.
Hartford HealthCare teams up with MinuteClinic
Hartford HealthCare is collaborating with CVS Health’s MinuteClinic to offer in-network adult primary care services across all 20 Connecticut MinuteClinic locations for patients covered by many of the health system’s accepted insurance plans. The collaboration will expand access to same-day and next-day appointments, including evening and weekend hours, with care coordination supported through a shared EHR system.
Q1 profit jumps 66%
CVS Health reported more than $2.9 billion in net income for the first quarter of 2025, a nearly 66% increase year over year. Total revenue reached $100.4 billion, up 6% from the same period last year. The company also raised its adjusted earnings-per-share guidance to a range of $7.30 to $7.50, up from its prior range of $7 to $7.20.
CMS fines 13 Medicare Advantage plansCMS has fined 13 health plans a combined $1.5 million for Medicare Advantage violations related to cost-sharing rules and Part D drug benefit administration. The penalties, issued May 1, stem largely from claims processing errors that caused enrollees to overpay for medical services and prescription drugs — in some cases exceeding annual out-of-pocket limits. The violations were identified through audits of plan year 2022.
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