The 2007 merger of CVS and Caremark is making pharmacy health care more accessible, more effective and more affordable. Our integrated pharmacy and PBM operations provide greater choice and more convenience for customers and patients, improve health outcomes, and lower overall health care costs for plan sponsors and participants. Any suggestions that our business practices are anti-competitive or that we are violating antitrust laws are totally false.
Per the specific questions you had posed, below please find our detailed responses.
Maintenance Medications:
The program you refer to regarding the delivery of maintenance medication prescriptions is a program offered by CVS Caremark called Maintenance Choice. Maintenance Choice is a completely voluntary offering that is available only if a plan sponsor (i.e., health plan or employer) chooses to participate and is the latest example of CVS Caremark’s efforts to provide innovative solutions that help meet the needs of our customers and their plan participants.
Prior to the 2007 merger of CVS and Caremark, many plan sponsors required that participants obtain a 90-day supply of maintenance medications for chronic diseases only from mail order pharmacies since plan sponsors and plan participants are generally charged less for prescriptions filled via mail order. In these cases, a plan participant could typically fill a first or second refill of a maintenance prescription for chronic conditions at a retail pharmacy in their network, and then must fill their next prescription at the mail order pharmacy or pay higher co-pays if they did not select mail. Maintenance Choice provides plan participants the option of receiving a 90-day supply of maintenance medications either through the mail or in-person at one of our approximately 7,000 CVS/pharmacy stores located across the United States. Regardless of how the plan participant chooses to receive medications, he or she pays the lower mail co-pay and the health plan sponsor pays the lower mail service rate. For this reason, Maintenance Choice prescriptions are usually less expensive for the participant and for the plan sponsor than prescriptions obtained at other pharmacies. When a plan sponsor chooses Maintenance Choice, the participant is likely to receive a letter describing their health plan benefit and advising them of the savings associated with filling their maintenance prescriptions at mail order or through the convenient pick-up option now offered at CVS pharmacies.
We believe Maintenance Choice and its new pick-up option is consumer friendly, and it has been well received by our participating PBM clients and their plan participants. In any event, depending on plan design, plan participants are typically able to continue to obtain prescriptions for acute or short-term conditions at any one of the more than 64,000 participating pharmacies in our network. This network includes major retail chains as well as the majority of independent pharmacies.
FTC Investigation:
In August 2009, CVS Caremark was notified by the Federal Trade Commission (the “FTC”) that it is conducting a non-public investigation under the Federal Trade Commission Act into certain of the company’s business practices. CVS Caremark is cooperating fully in the FTC’s investigation. While we are not able to predict with certainty the timing, outcome or consequence of the investigation, we remain confident that our business practices and service offerings (which are designed to reduce health care costs and expand consumer choice) are being conducted in compliance with antitrust laws.
Medicare Part D:
With regards to your question about specific Medicare Part D beneficiaries, you have indicated that you are aware of two couples in different states expressing concern about our Medicare Part D program. We were able to determine that one of the couples participates in an RxAmerica Medicare Part D plan. RxAmerica is a company recently acquired by CVS Caremark as part of its acquisition of Longs Drug Stores. RxAmerica maintains a broad national retail network for its Medicare Part D plans, which includes the major retail pharmacy chains, independent pharmacies and thousands of other pharmacies. The price of a particular drug at a particular pharmacy may vary depending on contract terms negotiated by RxAmerica with each network pharmacy. However, any Medicare Part D plan participant is free to choose which network pharmacy to use, and there are no restrictions that limit a participant’s choice of pharmacy. Therefore, if a Part D participant is not satisfied with the price charged at any network pharmacy, he or she can go to any other network pharmacy to fill prescriptions.
We have no record of the other couple receiving Medicare Part D benefits through CVS Caremark, although it does appear they are participants in a non-Medicare retiree health plan administered by CVS Caremark. Any copay for any prescription they fill would be based on the requirements of their health plan sponsor’s plan design—their copays would not be determined by CVS Caremark. Therefore, we do not understand the basis for any complaint they may have about Medicare coverage relating to CVS Caremark. It is possible, however, that they have some type of Medicare coverage administered through a company different than CVS Caremark.
Christine Cramer
Director, Public Relations
CVS Caremark
