Last year, KFF — the globally recognized health policy research organization — reported that, based on polling, approximately one in eight American adults has used a GLP-1 drug.1 If so, tens of millions of Americans alone are using the weight loss drug that has proven to be efficacious to varying degrees, but nonetheless remarkably expensive. The two most widely used GLP-1 drugs — Novo Nordisk’s Wegovy and Eli Lilly’s Zepbound, both of which have been approved by the U.S. Food and Drug Administration (FDA) — cost over $1,000 for a one-month supply, naturally posing concerns for employers and plan sponsors trying to prioritize cost management for their respective health plans. Thus, many plans already use eligibility clinical criteria, documentation requirements, step therapy, or partial exclusions (i.e., only for treating diabetes) to manage costs. However, all these methods rely on the ability to enforce clinical criteria through pharmacy benefit managers (PBMs), who are likewise invested in keeping GLP-1 costs in check on behalf of their clients. This dynamic has purportedly accounted for a recent class action lawsuit (Larkin v. Caremark RX, L.L.C.) against one of the country’s most prominent PBMs: CVS Caremark.2 

In early 2025, CVS Caremark announced that as of July 1, 2025, it would withdraw Zepbound from its standard and advanced controls and value formularies and instead give preferred status to Wegovy. The rationale, according to the PBM, was that the two drugs are interchangeable, even though there may be a price differential. Upon informing patients of the development, CVS Caremark shared that there was “another covered medication that’s safe and effective for your condition and may cost less.”3 It was widely understood that the medication was Wegovy, from Novo Nordisk, with which CVS Caremark had just formed a partnership. 

Subsequently, a class action lawsuit, filed in New York’s Southern District Court in early September 2025 by two health plan participants, Dennis Larkin and Danielle Gosline, on behalf of a proposed class of thousands of health plan participants whose requests for Zepbound coverage had been rejected, accused CVS Caremark of illegally altering its Zepbound coverage. The plaintiffs claimed that the weight-loss treatments are actually not medically interchangeable as they contain disparate active ingredients — Zepbound is a tirzepatide drug while Wegovy is a semaglutide product that gives rise to more deleterious side effects.4 Furthermore, the plaintiffs alleged that CVS Caremark, by steering patients away from Zepbound — a drug their providers deemed medically necessary for their conditions — shirked its fiduciary duty under the Employee Retirement Income Security Act (ERISA). It is important to note that, generally speaking, it is rare for a PBM to be deemed a fiduciary, as a PBM typically doesn’t want to assume any fiduciary obligations because of the potential liability. Nevertheless, from a healthcare law perspective, Larkin v. Caremark RX, L.L.C. has profound implications as it serves as a microcosm of the friction between healthcare cost containment and fiduciary obligations. 

The plaintiffs’ argument 

Per the class action lawsuit, “Plaintiffs’ claims for coverage for their Zepbound prescriptions were improperly denied, and the arbitrary and capricious denials issued by CVS Caremark ignored the language of the underlying plans, the reasons why Zepbound is medically necessary for each Plaintiff, and overruled the recommendations of Plaintiffs’ skilled and knowledgeable medical providers.”5 

There are different layers to the plaintiffs’ medical necessity claims. For the purpose of combating obesity, they have pointed towards scientifically proven evidence that Zepbound is a superior option; a case further backed by a CNN report citing studies indicating that people who used tirzepatide injections (i.e., Zepbound) lost more weight and were more likely to attain specific weight-loss goals than those using semaglutide medications (i.e., Wegovy).6 However, further complicating matters is the fact that one patient in the suit (Larkin) was prescribed Zepbound not just for obesity, but also for his severe obstructive sleep apnea (a disorder in which breathing repeatedly stops and starts, most commonly caused by a blockage of the airway, and can trigger high blood pressure and heart disease if untreated). Thus, the denial of Zepbound for a diagnosed case of sleep apnea was alleged to have been a further violation of the terms of their employer-sponsored health plans, including coverage for medically necessary prescription drugs.7 

“The company is effectively saying, ‘We’re not going to cover this FDA-approved drug for sleep apnea, and instead we’ll make you take Wegovy, which is not FDA-approved for that condition,” said D. Brian Hufford, one of the attorneys representing patients Larkin and Danielle Gosline.8 “That’s a breach of the health insurance contract as well as a breach of the fiduciary duty CVS owes its members.” 

In addition to the lawsuit filed in New York’s Southern District Court, another similar lawsuit was filed in Washington State, in which the plaintiff, Martin Hamburger, alleged that CVS Caremark and CareFirst BlueCross BlueShield dismissed his requests for Zepbound coverage without ever considering whether the drug was medically necessary for his sleep apnea.9 Hamburger’s legal counsel stated that CareFirst and CVS breached their ERISA obligations by categorically denying all coverage for Zepbound — irrespective of medical necessity, and by neglecting to adhere to the plan’s review process for medically necessary prescription drugs not on the plan’s formulary. Hamburger — whose suit is pending in the District of Columbia — is represented by Nichols Kaster and Virtue Law Group. His proposed class includes patients who need Zepbound to treat obstructive sleep apnea and whose healthcare and pharmacy benefits are administered by CareFirst and CVS Caremark. 

The response from CVS Caremark 

In turn, CVS Caremark has responded that the lawsuit is without merit, as its formulary change leverages competition to reduce costs, and added that there is a process for making case-by-case exceptions for rare instances in which on-formulary options are ineffective or yield harmful side effects. 

“By drawing upon our decades of expertise in making prescription drugs more affordable and accessible, we are confident that our formulary move means lower costs and better outcomes for consumers and our customers,” a CVS Caremark spokesperson told Fierce Healthcare in September.10 

Whitrap, vice president of external affairs for CVS Health, shared with Bloomberg Law that “By forcing the drug manufacturers to compete with one another on price, CVS Caremark was able to unlock significant cost savings for the employers and unions that hire us to manage their pharmacy benefits . . . That savings will enable those same employers and unions to broaden access to this entire GLP-1 drug category: where they previously could provide access to none, now they can provide access to Wegovy.”

Whitrap went on to state that CVS Health creates many drug formularies to meet a vast array of needs, and that “the exclusion of Zepbound doesn’t apply to all 90 million Americans for whom CVS Caremark is their [PBM].”

Compliance concerns

Though the outcome of Larkin v. Caremark RX, L.L.C. remains very much in question, the ongoing litigation has brought to light some very important lessons for those invested in the healthcare compliance industry. First and foremost, this case elucidates the significance of ensuring compliance with one’s ERISA duties as well as the terms of the applicable plan document. The plaintiff, Hamburger, alleged that not only was he deprived of a full and equitable review of his claim by CareFirst and CVS Caremark, but also that those entities breached their ERISA obligations by refusing to cover Zepbound, irrespective of medical necessity. As such, there was an alleged compliance violation for failing to adhere to the plan’s review process for medically necessary prescriptions that fall outside the plan’s formulary. For compliance officers, the overarching takeaway is to avoid making “arbitrary and capricious” decisions (i.e., denials) that can be perceived as irresponsibly a plan document’s medical-necessity language, a physician’s recommendations, and established medical studies. Such ill-advised decisions can potentially amount to a violation of one’s fiduciary duties under ERISA

Takeaways 

• Pharmacy benefit managers (PBMs) decisions favoring one medication over another due to cost differences can trigger Employee Retirement Income Security Act litigation if participants believe their benefits were improperly denied. 
• To avoid allegations of fiduciary breaches, it would be prudent for plan sponsors and third-party administrators (TPAs) to ensure that PBM formulary changes comply with plan terms and medical-necessity definitions. 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. 
• Along those lines, it would be wise for plan sponsors to ensure that their respective participants understand either how GLP-1 drugs are covered or, conversely, if they are excluded, what clinical factors and cost considerations factor into the exclusion. 
• Meanwhile, plans sponsors should regularly monitor their respective plans’ GLP-1 provisions to ensure that the language aligns with their intent. 
• TPAs may consider documenting their medical necessity review processes and being prepared to help plan sponsors respond to participant appeals. 

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