Groups Target CVS Caremark, Seek Privacy Violation Probe
By Dinah Wisenberg Brin, Of DOW JONES NEWSWIRES
Consumer advocates and a national pharmacists' group have asked the Federal
Trade Commission and the Department of Health and Human Services to investigate
possible violations of U.S. health-privacy rules by CVS Caremark Corp. (CVS),
the combined drug retailer and pharmacy benefits manager.
The FTC already is probing CVS Caremark's business practices after lawmakers
and the National Community Pharmacists Association raised concerns, including
allegations the company improperly used patient data from its pharmacy-benefit
operation to steer customers into its CVS drug stores.
The NCPA and other groups added to their complaints in a letter dated last
Friday to the FTC and HHS' civil rights office that accused CVS Caremark of
violating patient privacy laws--the Health Insurance Portability and
Accountability Act, or HIPAA, and more recent provisions--by using protected
patient information from health plans and competing pharmacies to channel
customers into CVS drug stores. The company used the data to fashion letters to
make patients switch to a CVS pharmacy for long-term medications, the groups
say.
"The patients that have received the marketing letters from CVS Caremark are
extremely upset that their medical information is being accessed and manipulated
not for the coordination of their medical care but for the financial gain of a
business associate of their health plan," the letter said. Several privacy and
consumer advocate groups signed the letter.
NCPA recently asked the FTC to take a closer look at PBM mergers and "
anticompetitive conduct" by PBMs, and had been asking the agency this year to
review the 2007 merger that formed CVS Caremark.
NCPA spokesman Kevin Schweers said the group's latest CVS Caremark complaint
is more specific than its previous allegations.
The allegations center around CVS Caremark's "maintenance choice" program,
which allows Caremark PBM members to use a CVS pharmacy for 90-day supplies of
chronic medications at the same price charged by the company's mail-order
pharmacy. Under employer drug plans that require members to use the Caremark
mail-order pharmacy for maintenance prescriptions, patients essentially must buy
the drugs either through the CVS Caremark mail pharmacy or at a CVS store.
Other PBMs also have mail-order-only benefit plans for supplying maintenance
medications, and CVS promotes the maintenance choice program as an extra,
consumer-friendly option for members who otherwise would be restricted to the
mail-order pharmacy.
"CVS Caremark places the highest priority on maintaining our customers'
privacy. We have extensive policies and procedures in place to safeguard our
customers' sensitive personal and health information, and we follow federal and
state laws in handling this information," the company said Monday.
CVS said the pharmacists' group is challenging both "the convenient and
affordable option of mail delivery" commonly used by PBMs and now "the
convenient retail pick-up option that CVS Caremark is offering for our PBM mail-
delivery prescriptions." The company said its services are designed to improve
patient health while reducing costs for plan sponsors.
NCPA, however, said it "has been collecting examples of CVS Caremark
misconduct from pharmacist members and their patients since early 2009. We have
collected over 300 complaints covering a wide range of deceptive, fraudulent or
otherwise egregious practices."
Some of the letters from CVS Caremark to patients involved drugs of a
sensitive nature, raising the risk that a neighbor might inadvertently learn of
a medical condition, NCPA said.
CVS Caremark earlier this month disclosed that the FTC notified the company in
August of a non-public probe of some company business practices. The company
said it was confident its business practices and service offerings comply with
antitrust laws.
Last week, law firms filed class-action shareholder lawsuits accusing CVS
Caremark of belatedly disclosing the FTC probe and of failing to disclose
earlier billions of dollars in contractual losses for 2010. CVS stock dropped
20% on Nov. 5 when it disclosed a net $4.8 billion in lost accounts for next
year.
-By Dinah Wisenberg Brin, Dow Jones Newswires; 215-656-8285; dinah.brin@
dowjones.com
(END) Dow Jones Newswires
11-23-091531ET
Copyright (c) 2009 Dow Jones & Company, Inc.
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