Court lets the Zepbound formulary lawsuit against CVS Caremark proceed

A federal judge has cleared the way for a proposed class action accusing CVS Caremark of dropping Zepbound (tirzepatide) from its drug lists after signing a rebate deal with Novo Nordisk, maker of the competing drug Wegovy (semaglutide). In an opinion and order dated August 26, 2026, Judge Louis L. Stanton of the U.S. District Court for the Southern District of New York denied Caremark's motion to compel individual arbitration and granted its motion to dismiss only in part ^[1].

The plaintiffs, Dennis Larkin and Danielle Gosline, sued under the Employee Retirement Income Security Act of 1974 (ERISA), alleging breach of fiduciary duty and prohibited transactions ^[1]. According to Bloomberg Law, the judge found they validly alleged that Caremark ignored the terms of their health plans when denying Zepbound coverage and that it engaged in self-dealing by making coverage decisions based on its own financial interest ^[2]. Plaintiffs have until September 25, 2026 to file an amended complaint ^[1].

What the complaint alleges

Larkin and Gosline get prescription drug benefits through employer-sponsored plans at Publicis and Hillside Children's Center, with CVS Caremark serving as the pharmacy benefit manager (PBM) that decides coverage and handles appeals ^[1]. Larkin used Zepbound for obesity and sleep apnea; his coverage was first denied on June 19, 2025, and denied twice more on appeal, exhausting his administrative appeals ^[1]. Gosline used Zepbound for obesity after other medications caused intolerable side effects; her coverage was denied on July 1, 2025, and after one denied appeal, Caremark told her that her appeals were exhausted because the request was deemed "urgent" ^[1].

The complaint alleges that CVS Caremark or its parent, CVS Health Corporation, entered a rebate agreement with Novo Nordisk on or around May 1, 2025, under which Caremark would favor Wegovy to the exclusion of Zepbound in exchange for rebates on Wegovy sales ^[1]. Zepbound was removed from the formularies effective July 1, 2025 ^[1]. The plaintiffs say Zepbound should still have been covered as medically necessary regardless of formulary status, and that Caremark's denial letters cited medical necessity without weighing current medical guidelines or the records they submitted ^[1]. They also argue the substitutes offered — Wegovy and Mounjaro (tirzepatide) — did not meet their plans' coverage requirements ^[1].

Caremark Rx, L.L.C. has argued it is merely the parent of the plans' actual PBM, CaremarkPCS Health, L.L.C., and is not involved in claims decisions ^[1]. On arbitration, Caremark pointed to terms and conditions on Caremark.com, where both plaintiffs created accounts in 2024 and kept using them through 2025; the plan documents themselves contain no arbitration clause ^[1]. The published opinion text available here shows the court found Caremark met its initial burden of showing an arbitration agreement was made and could invoke it as an "affiliate," but the portion explaining why the motion was ultimately denied is cut off ^[1]. Which specific claims were dismissed is also not spelled out in the available text ^[1].

Why it matters for patients

Millions of Americans get their GLP-1 coverage through a PBM's formulary, and the 2025 shift that made Wegovy preferred over Zepbound on Caremark's template formulary affected patients mid-treatment. This ruling does not restore anyone's coverage and does not decide whether Caremark broke the law. It means the case survives an early stage and moves toward discovery, where the terms of rebate arrangements could be examined.

The ruling also matters because Caremark tried to push the dispute into individual arbitration based on website terms rather than plan documents ^[1]. Denying that motion keeps the case in open court as a proposed class action ^[1].

Whether the plaintiffs will ultimately win, and whether any remedy would extend to other plan members, is not yet known.

What happens next

September 25, 2026 is the deadline for the plaintiffs to submit an amended complaint ^[1]. No trial date or further schedule appears in the available sources.