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Author Topic: CVS/Caremark. unfair business practices  (Read 1611 times)

Offline Little John_NC

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CVS/Caremark. unfair business practices
« on: September 05, 2009, 06:00:37 pm »

I got this letter from Larry Kissell.
Is CVS"s advocating greater protection of the interests of consumers. I dont think so. What was the FTC thinking when they allowed this merger ?

September 3, 2009

Dear John,

 Our community pharmacies and their customers are at risk from unfair business practices, and I am committed to protecting them.

 In 2007, retail pharmacy giant CVS completed their acquisition of Caremark, one of the nation's largest Pharmacy Benefit Managers.

 After the merger, CVS/Caremark and its 6,200 stores combined to fill or manage more than 1.2 billion prescriptions annually and establish relationships with more than 150,000,000 consumers - one out of every two Americans.

 The idea of a company with this much individual power over so many consumers raises red flags. Now, alarming reports of anti-competitive and deceptive conduct on behalf of CVS/Caremark have prompted me to send a letter to Federal Trade Commission Chairman Jon Leibowitz seeking an immediate investigation into the merger between the two companies.

 After talking with several local pharmacies and many constituents, I believe this merger has led to significant harm for consumers and threatens the livelihood of many community pharmacies.

 One of the most disturbing reports of abuse is from patients with Caremark-operated Medicare Part D plans. Consumers have reported receiving requests to switch their prescriptions to CVS from their community pharmacies, and subsequently, have had their plan charged upwards of 3,800% more for a drug than they were charged at their local pharmacy. This deceitful and despicable practice pushes elderly patients closer to their Medicare Part D "doughnut hole" gap in the prescription drug coverage. Once someone reaches the gap, they are required to purchase their medications completely out of pocket until they reach an out-of-pocket maximum expense limit.

 Other allegations of abuse have included consumers receiving letters stating that they will have higher co-pays or loss of coverage for their drugs unless they consent to transfer their prescriptions to CVS or Caremark mail order. Non-CVS patients have had their confidential patient data used to fill prescriptions at CVS pharmacies without their knowledge or consent. Consumers have been forced to switch from their community pharmacies to a CVS or mail-order pharmacy which cannot serve the specific needs of specialty drug users. In some cases, patients' drug regimes require that they take a drug at a specific time or risk ruining their entire treatment.  When a mail-order delivery is late, the patient's health is at risk, and plan sponsors are ultimately responsible for thousands of dollars in additional drugs.

 We cannot tolerate these types of dishonest business practices especially that prey on some of our most vulnerable citizens. Seniors, who rely on their Pharmacy Benefits Manager to help them with the sometimes overwhelming task of managing their prescriptions, should not have to worry about the company lining its pockets instead of offering them the most efficient and reasonable options available.   In addition, this anticompetitive conduct threatens our local pharmacies which provide an invaluable service to our communities.

 An investigation of CVS/Caremark may yield further examples of patients and small businesses that have been harmed.  I believe that the merger of CVS and Caremark has created a vertically integrated firm with the power, incentives and capability to foreclose competition and ultimately harm consumers.  Allowing a powerful drug store to use its PBM to raise rivals' costs, steer patients to its own stores and use confidential patient data for marketing is not desirable from either a competition or a consumer protection standpoint.

 We must do everything we can to ensure our consumers and our local pharmacies are not harmed by these alleged business practices.

 The Federal Trade Commission has the power to reopen mergers after they have been completed. After months of working to find a solution to these concerns through other channels, I believe the only option to protect our consumers is a formal call for a full FTC investigation into this merger. 

Larry Kissell
Member of Congress
Little John

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