Texas Attorney General Ken Paxton has notified CVS Health that its supplier diversity practices could expose the company to liability under state and federal anti-discrimination laws, as well as the Texas Health Care Program Fraud Prevention Act.
In a letter dated May 12, 2026, Paxton’s office cautioned the pharmacy chain that its Supplier Diversity Program — and any similar Diversity, Equity, and Inclusion initiative — may run afoul of civil rights statutes, according to a release from the Office of the Attorney General.
The letter states that CVS, based on its public statements, sets aside a substantial share of its contracts for suppliers meeting certain demographic qualifications. Eligible vendors under the program must be businesses owned and operated by individuals fitting categories CVS recognizes, including minority- and women-owned enterprises and businesses owned by people who identify as lesbian, gay, bisexual, or “transgender.”
“People must be judged on the basis of merit, not the color of their skin,” Paxton said. “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 attorney general’s office noted that Paxton had previously cautioned that supplier diversity programs structured around demographic categories may violate federal law. Earlier this year, he issued a legal opinion outlining potential liability tied to DEI practices.
The letter also cites President Donald Trump’s Executive Order 14173, which bars federal contractors and subcontractors — a category that includes CVS — from considering race, color, sex, sexual orientation, religion, or national origin in ways that conflict with the nation’s civil rights laws.
As a Medicaid pharmacy provider, CVS is required to comply with applicable civil rights laws and is prohibited from discriminating on the basis of race, color, national origin, sex, age, disability, or religion, according to the release. Receipt of public funds is contingent on ensuring that company programs and activities comply with state and federal law, the letter states.
Paxton’s office warned that violations could trigger significant exposure under the Texas Health Care Program Fraud Prevention Act.
The letter directs CVS to inform the Office of the Attorney General’s Healthcare Program Enforcement Division within 14 days of receipt of the letter about the steps the company has taken to comply with state and federal anti-discrimination laws.
