Sam Uretsky

Drug Chain Chicken

On June 9, Walgreens, the largest pharmacy chain in the United States, with 7,500 stores, issued a statement saying that it would no longer participate in the CVS Caremark prescription program. effective 30 days from the date of the announcement. The announcement does not explain the reason for this decision, but in a press release dated June 7, Walgreens offered some background, including a statement: CVS Caremark’s promotion of prescription drug plan designs, such as Maintenance Choice, disrupts networks by requiring patients with chronic conditions in many plans to use CVS pharmacies or Caremark mail service facilities for their prescriptions instead of Walgreens. This limits patient choice and ends up separating patients from community pharmacists they know and trust at a Walgreens drugstore.

CVS replied with a press release which included: Per Lofberg, President of CVS Caremark’s pharmacy benefit management business, said, “Walgreens’ announcement was nothing more than a transparent attempt to try to raise the pharmacy reimbursement rates it receives from CVS Caremark. We’ve seen Walgreens use this approach in the past, targeting employers, health insurers, government entities and other plan sponsors. We believe this approach is totally contrary to the needs of our clients who are all struggling to keep pharmacy health care affordable in today’s challenging environment.”

CVS also said that the practice of directing patients to CVS stores or Caremark mail-order pharmacies was for the benefit of the patients. Many of the companies that signed up for a benefit plan would have taken one that required patients to fill all maintenance prescriptions by mai-order, so that making the service available at CVS stores offered a convenience that would not otherwise be available.

This dispute is a game of chicken between two sumo wrestlers, and it’s not a good idea to get stuck in the middle. CVS had assured the Federal Trade Commission that it would maintain a strict firewall between the pharmacy operation and the pharmacy benefit manager (PBM). There have been repeated complaints that the company used confidential information to increase its own sales. In 2009, the California Pharmacists Association, in a letter to the FTC, accused CVS Caremark of misusing confidential information. The letter claimed that CVS Caremark has cancelled its contracts with many independent and chain pharmacies, pushing patients to use either the CVS mail order system or CVS stores. In some cases, “Patients report that CVS has contacted their physicians without the patient’s knowledge or approval to solicit prescriptions for their maintenance medications. The information on which these calls are made by CVS appears to be based on records of paid prescription claims obtained from Caremark.” (Emphasis in original.)

The National Community Pharmacists Association, representing independent pharmacies, has also waded in on CVS misuse of information that should be confidential. The NCPA letter has a number of stories of patients being switched to CVS stores against their will. In one case, a patient requested a refill on a prescription, but the pharmacist found that the script had been transferred to a CVS store two towns over, without the patient’s approval. In another report, a couple switched to CVS because of a promise of lower prices. “The local pharmacy billed Medicare $11.08 for seven of their drugs; CVS charged $313.17 for the same order and his co-pay went up $12. Over 12 months, these actions would have cost the couple hundreds of dollars more by pushing them into their drug plan’s “doughnut hole” coverage gap sooner.”

While Pharmacy Benefit Management companies are supposed to keep prescription records confidential, apparently they can’t resist temptation. Formerly, the drug manufacturer Merck owned the PBM Medco. In an FTC settlement, Merck agreed to pay $42.5 million to settle suits claiming that the PBM had steered patients to Merck products, even when a comparable drug was available at a lower price. In one example, in 1995, Medco reported that 31% of its patients on cholesterol lowering agents were being treated with Merck’s Zocor, which at the time cost $116 for a month’s supply, while Warner-Lambert’s Lipitor cost $82. At other PBMs, Zocor had a significantly smaller market share.

Having a drug store chain or drug manufacturer own a PMB seems like more temptation than any multi-billion dollar corporation should have to deal with. Walgreens also operates a PMB but so far seems to have (mostly) avoided charges of misuse of confidential information. While government action to break up corporations like CVS Caremark may be far off, companies contracting with a PBM can at least scrutinize the contract to assure that patient confidentiality and patient rights are protected. So far, the complaints have come from patients and independent pharmacies. Maybe with Walgreens, CVS has finally picked on somebody its own size.

Sam Uretsky is a pharmacist on Long Island. NY.

From The Progressive Populist, August 1, 2010