Pharmacy benefits manager CVS Caremark has agreed to pay $5 million to settle an investigation by the Federal Trade Commission that it overcharged seniors and taxpayers in the Medicare prescription drug program. The FTC also announced it has concluded its investigation of the company.
Not everyone is happy with the settlement, however. In a statement following the FTC’s announcement, Douglas Hoey, CEO of the National Community Pharmacists Association said that while he appreciates the FTC investigation, “it is regrettable that the FTC’s actions fell short of more robust protections for consumers and pharmacy competition, which are warranted, in our view. NCPA provided to the agency what we believe to be compelling evidence, including one-sided contract terms with pharmacy small business owners, patient privacy concerns and a lack of transparency.”
He went on to say that “the major PBMs stand virtually alone in the health care sector as self-dealing entities allowed to both provide a health service and manage the reimbursement and other terms of that service for their competitors. Mergers such as CVS Caremark and the pending Express Scripts-Medco arrangement simply pour gasoline on that fire and increase prescription drug costs.”
CVS Caremark president and CEO Larry Merlo, meanwhile, said the company is pleased to have reached an agreement with the FTC that ends the investigation. Douglas Sgarro, executive vice president and chief legal officer with CVS Caremark said, “it is important to note that, at the conclusion of this comprehensive investigation, the FTC made no allegations of antitrust law violations or anti-competitive behavior associated with any of our business practices, products or service offerings.”
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