Six independent pharmacies in Texas have decided to sue CVS Caremark under the Racketeer Influenced and Corrupt Organizations (“RICO”) Act, charging that the company’s Caremark pharmacy benefits management (“PBM”) division engaged in racketeering and violated HIPAA by gaining control over patient data and eliminating competition out of the retail pharmacy market. Pretty heavy stuff when the RICO card gets played!
WBC (wbcbaltimore.com) has been following this story with great interest. The CVS/Caremark saga has been something of an ongoing soap opera, with charges and counter-charges between industry rivals being leveled in a steady barrage since the companies merged. Many plan sponsors, however, have sworn by the Caremark model, expressing great satisfaction with the integration of retail and PBM services along with the member convenience of Maintenance Choice, their 90-Day @ Retail option.
The lawsuit claims CVS Caremark violates the firewall between the retail pharmacy and the PBM that was expressed and required by the FTC when they approved the 2007 merger of the companies. Instead, the combined company built an information technology platform that captures in-depth patient data from all business units for marketing and other purposes in violation of HIPAA patient privacy laws. Additionally, the lawsuit claims that CVS/Caremark violates the Texas “Any-Willing-Provider” law by requiring prescriptions be filled at a CVS retail outlet.
The lawsuit also details how the company plans to develop a “Consumer Engagement Engine” with “a comprehensive view of the patient.” This “Engagement Engine” is a detailed profile that would show the patient’s name, demographics, drug history, prescribers, health behavior, adherence patterns and communication preferences.
In response, Carolyn Castel, CVS/Caremark vice president for corporate communications, sent an e-mail regarding the lawsuit to a reporter last Friday. “We have learned that a new lawsuit has been filed, but we have not yet had a chance to review its contents,” she said. “CVS/Caremark is confident that its business practices and service offerings, which are designed to reduce health care costs and expand consumer choice, are being conducted in compliance with applicable antitrust, privacy and other laws.”
A review and whitepaper on how to select your PBM can be downloaded at our website (wbcbaltimore.com).