AUSTIN (LN) — Texas Attorney General Ken Paxton sent a letter to CVS Health warning that the company’s supplier diversity program may violate state and federal civil rights laws and expose the pharmacy chain to significant liability under the Texas Health Care Program Fraud Prevention Act.
The Office of the Attorney General’s letter, issued Tuesday, targets CVS’s Supplier Diversity Program, which the company’s public statements say reserves a significant portion of its contracts for suppliers meeting certain demographic criteria. Under the program, eligible suppliers must be businesses owned and operated by individuals in classifications recognized by CVS, including minority and women-owned enterprises and businesses owned by individuals who identify as lesbian, gay, bisexual, or transgender.
Paxton’s office argued that the program may conflict with President Donald Trump’s Executive Order 14173, which prohibits federal contractors and subcontractors from considering race, color, sex, sexual preference, religion, or national origin in ways that violate civil rights laws.
“People must be judged on the basis of merit, not the color of their skin,” Paxton said in a statement. “My office will stand firmly against racist DEI policies. Whether it is found in hiring processes or contract determinations, I will take a sledgehammer to any radical DEI policies that discriminate against Americans.”
The letter notes that Paxton has previously warned that discriminatory supplier diversity programs may violate federal law, citing a legal opinion issued earlier this year detailing the potential liability such practices create.
As a Medicaid pharmacy provider, CVS must comply with all applicable civil rights laws and may not discriminate on the basis of race, color, national origin, sex, age, disability, or religion, the letter said. As a condition of receiving public funds, CVS must ensure that its programs and activities comply with state and federal law and do not discriminate by using “woke DEI frameworks,” according to the letter.
The Office of the Attorney General’s Healthcare Program Enforcement Division demanded that CVS notify the office of the steps it has taken to comply with state and federal anti-discrimination laws within 14 days of receipt.
To read the letter, click here.