NCPA Comments on FTC Action Against CVS Caremark, Vows to Continue PBM Transparency Efforts

The Federal Trade Commission (FTC) announced today that CVS Caremark agreed to pay $5 million to settle allegations that the company overcharged seniors and taxpayers in the Medicare prescription drug program and that the FTC has concluded its investigation into charges alleging that CVS Caremark engaged in anti-consumer, anticompetitive business practices following the 2007 merger of mega-chain CVS with pharmacy benefit manager (PBM) Caremark. The FTC inquiry was launched at the urging of the National Community Pharmacists Association (NCPA) and others.

NCPA CEO B. Douglas Hoey, RPh, MBA, issued the following statement in response:

“We appreciate the FTC reviewing the evidence and concerns brought by NCPA, patients, members of Congress and others regarding anti-consumer, anticompetitive behavior by CVS Caremark. The investigation resulted in a multi-million dollar settlement of claims that CVS Caremark overcharged seniors and taxpayers and misled beneficiaries in its marketing of prescription drug plans on Medicare’s Plan Finder Website. The settlement should also serve as a warning to any Medicare drug plan sponsors that have potentially misled seniors in their promotion of so-called ‘preferred pharmacy’ plans.

At the same time, it is regrettable that the FTC’s actions fell short of more robust protections for consumers and pharmacy competition, which are warranted in our view. NCPA provided to the agency what we believe to be compelling evidence, including one-sided contract terms with pharmacy small business owners, patient privacy concerns and a lack of transparency. Now more than ever, NCPA urges Congress and state legislatures to enact legislation, such as S. 1058/H.R. 1971, that provides transparency and promotes pharmacy competition and consumer protections to address these types of questionable practices.

On behalf of its community pharmacist members and their patients, NCPA opposed the merger of CVS and Caremark from day one. The union of these companies further compounds the inherent, ‘the fox is guarding the henhouse’ problem with today’s prescription drug benefit system. The major PBMs stand virtually alone in the health care sector as self-dealing entities allowed to both provide a health service and manage the reimbursement and other terms of that service for their competitors. Mergers such as CVS Caremark and the pending Express Scripts-Medco arrangement simply pour gasoline on that fire and increase prescription drug costs.

We appreciate the patients and pharmacists who provided evidence about CVS Caremark’s conduct and questionable practices by PBMs. Our efforts concerning CVS Caremark are all part of the ongoing, years-long initiative at NCPA to increase transparency in prescription drug benefit administration and to align the interests of payers, patients, and pharmacists. Those efforts will continue going forward.”