CVS Caremark, FTC Investigation Still Hot Topics in Washington

CVS Caremark has been battered by Walgreens and Wall Street this week and Washington hasn’t exactly forgotten about the multiple state and federal investigations into the company’s business practices, either.  

In response to calls from NCPA and others, the Federal Trade Commission (FTC) launched an open, joint investigation into allegations of both patient privacy violations and anti-competitive behavior following the merger of pharmacy chain behemoth CVS and pharmacy benefit manager Caremark.

Dozens of Members of Congress are on record expressing support for the FTC investigation. Now lawmakers are pressing for solutions.

 Most recently, U.S. Senator Amy Klobuchar (D-Minn) questioned FTC Chairman Jonathan Leibowitz about the Commission’s progress during a June 9, 2010 Senate Judiciary Subcommittee on Antitrust, Competition Policy and Consumer Rights hearing.  Senator Klobuchar highlighted consumer complaints since the 2007 CVS-Caremark merger including “difficulty accessing their drugs as a result of restrictive plans that steer them away from their local pharmacists to CVS which may be miles away in another town.  In some cases patients who do not elect to fill their prescriptions through CVS Caremark’s mail order business are charged higher co-pays.”

 Leibowitz said that the investigation at the FTC, in both the Competition and Consumer Protection bureaus, is ongoing. He said he has met with both community pharmacies and CVS and that the investigation is ongoing.

 This follows a recent query by U.S. Representative Jim Jordan (R-Ohio) who, in a letter, asked the agency for continued investigations into questions about patients forced into mail order, misuse of private medical information and overly aggressive auditing practices. 

 These instances reflect the bipartisan support in Congress for a full investigation into CVS Caremark and remedies to address a multitude of problems.

 In the pharmacy industry, the case against CVS Caremark continues to gain steam as well.  An attorney for one major PBM told NCPA that “Walgreens’ decision shows that community pharmacists were right all along and this puts the credibility of the community pharmacists through the ceiling.”  And this week representatives of many of the major supermarket chains and mass merchants, both national and regional, were also pressing Members of Congress this week about problems related to CVS Caremark.

 It’s becoming clear that CVS Caremark’s model harms consumers and overall health care.  NCPA had led this fight for months; now other retailers are seeing the light.

11 Responses to “CVS Caremark, FTC Investigation Still Hot Topics in Washington”

  1. 1 Christopher Young June 18, 2010 at 5:03 pm

    I have evidence of CVS Caremark’s unfair business practices on a daily basis:

    – They are ultra secretive about the 90 day supply retail reimbursement rates. This contract is encrypted and you have to jump through all sorts of hoops to get the decryption application only to find out that you will actually be paid less than you paid from the wholesaler for most brand name drugs and many generics if you fill a 90 day supply if CVS Caremark is the PBM.

    – CVS Caremark will require a new prior authorization be obtained if you have a different independent pharmacy or chain pharmacy fill certain higher cost medication under the auspices it is to make sure that the patient truly needs that drug. The problem is that this happens even if there is already a PA on file obtained by the previous pharmacy. More damning than that is if I get a “prior authorization required” rejection, I can send the patient with the same exact script over to one their retail stores and no PA will be required. They aren’t using the PA process to help control costs, they use it as a hurdle to steer patients to their retail and mail-order pharmacies.

    – As a PBM CVS Caremark regularly requires patients in certain pharmacy plan groups to utilize their specialty or mail order pharmacies only with no exception for retail to fill the prescription. This is despite the retail pharmacy having a contract in place already with CVS Caremark. This is a direct violation of the “Any Willing Provider” laws that we have in Tennessee which state that is you have a contract where you accept the reimbursement rates CVS Caremark offers, the PBM must allow you to fill the medication. This is applicable unless the plan is self-funded which is the case most of the time. CCVS Caremark already has a judgment against them regarding this from 2003 but the FTC and attorney general’s office don’t seem to care that CVS continues such practices.

    This is by no means a comprehensive list of practices CVS Caremark utilize (as does Medco and Express Scripts) to manipulate and steer customers to their mail order and retail pharmacy. However, I believe it does justify an investigation by the FTC or at least the Boards of Pharmacy and Attorney General at the state level. This issue isn’t difficult to grasp for those who aren’t in the healthcare industry. It is simply a case where the pharmacy benefit manager (PBM) gets to make the rules by which retail pharmacies provide services to patients but in doing so, the PBM makes it more difficult for competitors of their own retail pharmacies to operate. This is obvious patient steering and effort to monopolize as much of the market as possible at the financial expense of plan sponsors, and worse, patient care and attention we provide our customers.

  2. 2 john July 25, 2010 at 10:04 pm

    I have posted this previously on another article, but shall post it again here.
    I would like to know when you folks will stop trying to destroy caremark. it seems that everything I read is how bad caremark is. It appears to me to be a vindetta against the company because of your lawsuit. Whereas the actions like this have no defense, there seems to be a steady stream of negativity spewed forth on your pages, even if the “new” information you offer is not really new. The biggest concern I have for your actions is in regards to your current issues with cvs/caremark’s maintenance choice plan. You seem to have forgotten that prior to maintenance choice, there were many companies that offered manditory mail order only.There are still many clients of cvs/caremark that do not have such a program in place. The clients of caremark that take this option (manditory mail order) would offer no local support whatsoever, so the NCPA would have no iron in the fire of this matter anyway. Maintenance choice helps the member by giving them an option to go to a local CVS pharmacy when they may have had manditory mail order before. if you truly cared about your patrons, you may not fight so hard to make sure the only way that some have to get their maintenance medications gets dissolved, thus endangering their lives. Please consider both sides of the equation before paasing judgement.

  3. 3 Joy August 13, 2010 at 2:41 am

    My husband and I are being forced by Caremark to order our long term medicine by mail 90 day supply we do not have the funds to buy 90 day supply. So my husband is electing to be with his medicine till I can talk to the dr to get a generic one we can get from Walmart. What gives them the right to force someone to buy 3month supply when they can not afford it shame on them.

    • 4 Joy August 13, 2010 at 2:46 am

      I meant to say without his medicine. Also I have cried since I got off work because they did not feel his medicine. It just burns me up that they have the nerve to treat us like this. Im considering legal matters will be checking my plan thru my employer it better say YOU HAVE TO ORDER BY MAIL IF YOUR ON LONG TERM MEDICINE. If it does not I will be contacting a lawyer for a class act law suit this is bull.

  4. 5 Mike August 28, 2010 at 7:01 pm

    John, you must be a cvs/caremark insider to be advocating for them. Plain and simple, why are MAIL ORDER prescriptions being filled at a locaL level? It seems like the bend twist or break every rule to their advantage. The only people benifiting from this is the top brass a cvs/caremark. The shareholders areen’t even doing so well

  5. 6 robert woodside November 28, 2010 at 5:46 pm

    can you please tel me the cost of
    effexor xr cap 75mg
    recently became generic

  6. 7 Nancy January 26, 2011 at 9:34 pm

    Yes, please give info on the Effexor XR 75 mg cap Caremark seems to have no problem playing with meds and ignoring correspondence with doctors. I qualify for the Pfizer discount program and for six months it was honored by my local CVS pharmacy. All of a sudden a new year and the script went from $31.42 for a 30 day supply to $97. for a 30 day supply. And now they want me to go for the 90 day plan. You do the math. The generic does not work for me, and no all generics are not duplicates of the brand. This is not the only script that they have played with and I shop around to find out what the best prices are for my meds.

    I have researched the Internet and Caremark always comes up with more complaints than any other company. The sad part is that real people with real illnesses are suffering at the hands of that company and it’s punitive business practices.

  7. 8 Veronica February 1, 2011 at 5:04 pm

    As if 2009 I was notified I could no longer get my prescriptions filled at my local pharmary that I have used for over 20 years. I now must use CVS or Caremark mail order for all prescriptions. They did allow a 2 prescription purchase and a 1 time override for the life of may participation in the plan. When I contacted Caremark to ask what would happen since I have met the two exceptions if I was some where and need a prescription filled but there was no CVS. They actually told me it was not a wise choice, but one selected by my employer and I was told to contact my Benefits Department since they made the choice. I asked what was the benefit to my company and again I was told to ask them. I also complained that CVS did not deliver and since I am disabled it is difficult for me to go and wait. There are people who have waited over 1 hour. I pay to participant in the Caremark plan, they do not give it to me for free so why am I not given the freedom to chose where I want to make my purchases.

  8. 9 Bill September 20, 2011 at 8:18 pm

    cvs-greedy bastards

  9. 10 mike November 10, 2011 at 11:45 am

    my rite aid was purchased by cvs. CVS now has obtained my confidential info without my authorization.. My neighbor works at the cvs in question.. I am devastated

  1. 1 CVS, Walgreens bid to dominate drug retail - SmartPlanet Trackback on June 18, 2010 at 4:09 pm

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