Three CVS actions raise concerns for some pharmacies, consumers

First, CVS set up a website for consumers to compare drug prices.

But the site gave clear preference to CVS pharmacies, automatically putting them at the top of the comparison list. That occurred despite a “firewall” that’s legally required between the drugstore chain and CVS Caremark, the drug giant’s pharmacy benefit manager that runs the site.

Second, CVS’s benefit manager cut Medicaid reimbursements to local Ohio pharmacies this past fall,

which some say put them in financial jeopardy. Then CVS’s “acquisition unit” sent letters to many of those same pharmacies, saying times are tough and asking whether they would be interested in selling their business.

And in a third action that is raising concerns among independent pharmacists and consumers,

CVS dialed up Roberta Timmons.

When the 67-year-old Honda retiree received a telephone message a few weeks ago about her prescription drugs, she assumed it was from her longtime neighborhood pharmacist.

But when Timmons returned the call, the Plain City resident was told that she could save money by transferring her prescriptions to a CVS pharmacy. The caller was CVS Caremark, the pharmacy benefit manager (PBM) for SilverScript, a CVS-affiliated supplemental drug plan serving seniors covered by Medicare.

“I thought: ‘Why are they calling me when I don’t have prescriptions filled at CVS?’” Timmons asked. “What prescriptions was I missing or not getting filled?”

After learning that SilverScript and CVS Caremark were both part of CVS, Timmons, who has gone to the same independent Plain City pharmacy for 20 years, went from confused to angry.

“Knowing that I’ve been with one certain pharmacy for so many years — and then they think they can call and get me to change over certain prescriptions or tell me that I’m not getting the prescriptions I’m supposed to have?”

‘Extremely concerning’

The interaction between CVS and Timmons — as well as the buyout offers and the website — are part of a pattern, CVS critics say, of reaching around the firewall to help the company’s bottom line and drive out competition. In roughly the past three years, the number of independent pharmacies in Ohio has declined by 164, and the number of CVS pharmacies (which took over the pharmacies in Target stores) has climbed by 68, Ohio Board of Pharmacy data show.

Federal regulators required the firewall when CVS and Caremark merged in 2007, to make sure those in one part of the business did not use confidential information and economic power to unfairly help the other.

In 2012, the Federal Trade Commission closed an investigation into allegations of such anti-competitive practices as patient steering and spread pricing (profiteering), saying that it would “not take any additional action at this time” against CVS, now the nation’s seventh-largest company.

Mike DeAngelis, CVS’s senior director for corporate communication, said in an email: “CVS Health maintains stringent firewall protections between our CVS Pharmacy retail business and our CVS Caremark PBM business, and takes these protections very seriously.”

During the call to Timmons, a CVS Caremark representative said she was contacted to inform her that two of her medications could be refilled in a 90-day supply. When Timmons asked about her other prescriptions, the representative provided the cost at her pharmacy — which the caller could learn because CVS’s PBM provided the payment — compared with the cost at a CVS store. The CVS price was always cheaper. No pricing information was given for other pharmacies such as Kroger or Walgreens.


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