Biotech Values

[DewDiligence]

This story is not exactly flattering to PBM’s…

http://www.reuters.com/article/marketsNews/idINN0749754120090507

›FTC Asked to Probe CVS on Prescription Drug Prices

Thu May 7, 2009 3:27pm EDT

WASHINGTON, May 7 (Reuters) - An association of state lawmakers concerned about drug prices asked the U.S. Federal Trade Commission on Thursday to take another look at its approval of CVS's 2007 purchase of Caremark, saying there was evidence of "harmful and deceptive conduct."

The National Legislative Association on Prescription Drug Prices alleged that pharmacy benefit managers, or PBMs, associated with CVS Caremark took rebates from manufacturers and did not pass them on to customers; suggested different, more expensive drugs and negotiated with employers and pharmacies separately, pocketing the difference.

"One investigation found that a PBM charged an employer $215 for a generic prescription but paid the pharmacy only $15. The PBM pocketed the $200 spread at the expense of the employer," the group said in a letter to FTC Chairman Jon Leibowitz.

CVS said the group "has it exactly backwards."

"The merger of CVS and Caremark is, in fact, making pharmacy health care more accessible, more effective and more affordable. Our integrated pharmacy and PBM operations provide greater choice and more convenience for patients, improve health outcomes, and lower overall health care costs for plan sponsors and participants," the company said in a statement.

At the time of the 2007 merger, CVS was the country's largest pharmacy and Caremark was a leading PBM.

"We believe that this evidence suggests that CVS Caremark has engaged in anti-competitive conduct that ultimately will harm both consumers and competition," the group said in its letter.

"We urge the commission to open an investigation of CVS Caremark to explore whether there have been competition or consumer protection violations of the law," the letter said.

The FTC did not respond to a request for comment.‹