Some Community Pharmacists Cry Foul on CVS Caremark Discount Program

By Kevin Schweers

You may have missed an interesting column this week in the Journal newspaper of Winston-Salem, NC. In it, a local columnist examines questions raised by Dave Marley of Marley Drug about a discount program CVS Caremark is running and the local city council will consider the issue in January. Here are some key excerpts:

“The deal looked too good to be true: discount cards for prescription drugs provided free to residents of Winston-Salem at no cost to the city.

“Who in their right mind — especially city council members elected to office — could possibly vote against such a deal?

“With little fanfare and even less debate, city officials leaped at the prospect and started distributing the cards last month.

“Provided by CVS Caremark, the cards allow residents to receive discounts of up to 20 percent at participating pharmacies for prescriptions not covered by insurance.

“Voting ‘no’ to such a proposal would be a short step away from signing off on a proclamation denouncing puppies and Santa Claus.

“‘My concern is that the city unknowingly gave some benefits to a larger competitor,’ said Dave Marley, the owner of Marley Drugs and a vocal defender of independent pharmacies. ‘Nobody asked what was in it for CVS or how it might hurt local businesses.'”

The column continues:

“Because CVS is a large chain pharmacy that happens to own Caremark — a pharmacy benefit-management company with a sizable mail-order component — it gets an unfair direct-marketing advantage by knowing exactly what prescriptions are being taken by patients who use independent pharmacies.

“‘Now they can target my customers directly with the information they get from that card,’ Marley said.”

In asking questions about the program, Marley has company.

In August, here’s what another community pharmacist told The Opelika-Auburn News when the program came to Opelika, AL:

“’The assumption being made is that all pharmacies other than CVS are over charging,’ said Roger Burnett, owner of Thomas Pharmacy Inc., in Opelika. ‘We feel like our prices are probably as good as they are going to tell us to charge anyway.’

“Customers have the option to pay the pharmacy price or the discount price the card provides. Another fear is that the cards could transmit customer information to CVS — that they could, in turn, use that information to solicit customers, said Bill Eley, director of legislative affairs for the American Pharmacy Cooperative Inc., which represents 1,300 independent pharmacies in 21 states, including Alabama.

“’They can get information when they run that prescription through,’ he said.

The Union-Democrat of Sonora, CA aired similar concerns in an August 2008 report.

The paper editorialized: “Prescription drugs at a 20 percent discount, throughout Tuolumne County, with no enrollment fees or strings attached? The plan presented to the Board of Supervisors last week, indeed, sounded too good to be true. That’s why the board was right to take a deep breath and a step back before pulling the trigger.”

The paper concludes: “And, perhaps most significantly, is it worth hurting independent local drug stores already dealing with hard economic times by adopting a program that will likely benefit a very small number of Tuolumne County’s residents?”

It’s not the first time pricing and privacy concerns have been mentioned in the same breath as CVS Caremark. Some patients and community pharmacists have complained about higher prices and other abuses resulting from the merger of retail chain CVS with pharmacy benefit manager Caremark, concerns which NCPA related to the Federal Trade Commission in May to prompt a formal investigation, which is now underway. And just nine months ago the company paid $2.25 million as it “agreed to settle Federal Trade Commission charges that it failed to take reasonable and appropriate security measures to protect the sensitive financial and medical information of its customers and employees, in violation of federal law,” in the agency’s words.

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