Retail News Breaks
Connecticut, CVS Caremark at odds over Rx discount program
June 24th, 2010
NEW YORK – Connecticut's attorney general has begun an investigation of CVS Caremark Corp. over a disagreement about extending a consumer discount drug program offered by the company to the state's Medicaid program.
Richard Blumenthal, attorney general of Connecticut, announced Wednesday that the investigation will examine CVS Caremark's "threat" to end its Health Savings Pass program for Connecticut consumers because state law requires the chain to extend the same discounts to Medicaid.
Blumenthal said that, in cooperation with Department of Consumer Protection Commissioner Jerry Farrell, he has sent CVS Caremark a subpoena to explain why providing the discounts to the state Medicaid program would result in termination of the Health Savings Pass in Connecticut, as well as to provide other information.
"We intend to fully comply with all applicable legal requirements in this matter, and we will fully cooperate with the attorney general's investigation," CVS Caremark said in a statement.
Under the Health Savings Pass Program, consumers who pay a $10 annual enrollment fee can fill a 90-day prescription for one of more than 400 common generic maintenance medications that treat conditions such as diabetes, high blood pressure and high cholesterol for $9.99 at a CVS/pharmacy. CVS Caremark said the program was developed primarily to help uninsured and underinsured individuals have access to certain medications.
"We recently informed the state of Connecticut that we would consider discontinuing the Health Savings Pass program in Connecticut if the state continued in its demand for access to Health Savings Pass pricing for the state's Medicaid program," CVS Caremark stated. "The state's actions would alter the intent of this program and make it economically unfeasible to continue."
According to Blumenthal, Connecticut law requires pharmacies to charge Medicaid the lowest drug price they offer consumers, which the state said obligates CVS Caremark to provide the Health Savings Pass discount. He said CVS Caremark disagreed with that contention, prompting the state's General Assembly to approve a law clarifying the requirement, to which CVS responded by threatening to end the Health Savings Pass in Connecticut.
The attorney general also claimed that CVS Caremark's actions are at odds with other pharmacies that have extended their discount program drug pricing to the state Medicaid program and "may be inconsistent with CVS Caremark's actions in other states."
In a letter to CVS Caremark chairman and chief executive officer Tom Ryan, Blumenthal stated, "We are concerned that you have singled out the state of Connecticut for elimination of the drug discount program considering that the Health Savings Pass program continues to operate in other states where CVS Caremark does business."
CVS Caremark said it's not bound by law to offer the Health Savings Pass, noting that consumers elect to join the program.
"The CVS Health Savings Pass is a voluntary membership program that is not required by any law," the company stated. "Information provided to members upon enrollment informs them that CVS/pharmacy may discontinue the program for any reason. If this matter [with the state of Connecticut] cannot be resolved, we will inform in writing any Connecticut customer who enrolled in the Health Savings Pass program within the past 12 months that the program is being discontinued and that their membership fee will be refunded."
CVS Caremark added, "We remain hopeful that we can resolve this matter on terms that permit us to continue to offer the program in Connecticut."
Blumenthal said CVS Caremark's deadline for compliance with the subpoena is July 9.
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