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In response to complaints from Charlotte area pharmacists and patients, U.S. Rep. Larry Kissell, D-N.C., has asked the Federal Trade Commission to investigate reports of anti-competitive and deceptive practices by CVS/Caremark.
Kissell's request comes more than three months after Charlotte pharmacist Jesse Pike and two of his customers testified before FTC Chairman Jon Leibowitz about the chain pharmacy's unfair prescription drug pricing and referral patterns.
Kissell asked the FTC to review its decision to allow the 2006 merger of CVS, the largest retail pharmacy chain, and Caremark, the largest pharmacy benefits manager.
“We cannot allow a company to manipulate patients and drive local pharmacies out of business,” Kissell said in a statement released Wednesday.
Reached by the Observer Wednesday evening, Pike questioned why it had taken so long for the congressman to respond. “I'm ecstatic,” he said. “It's just taking a long time.”
Earlier this year, a spokeswoman for CVS/Caremark disagreed with the independent pharmacists' characterization of the chain's business practices. She said its integrated operations “provide greater choice and more convenience for patients.”
In mid-May, the Observer wrote about the testimony of Charlotte retirees Max and Jan Hauser, who joined Pike before the FTC in Washington. The Hausers, both over 65 and on Medicare, had been longtime customers of Pike's Pharmacy until they switched to a new prescription drug plan, RxAmerica.
The Hausers said RxAmerica encouraged them to get their drugs at CVS. They did, but they learned later that their new plan was administered by Caremark, which is owned by CVS, and that Caremark pays CVS more than it had paid Pike's for the same drugs.
According to Max Hauser's insurance documents, when Pike's filled a prescription for omeprazole, a generic drug for ulcers, the pharmacy received $4.77 for a 30-day supply. Caremark reimbursed the Hausers' $5 co-pay, for a total of $9.77.
When Hauser took the prescription to CVS, his plan paid CVS $62.59 for the same 30-day supply of omeprazole. Caremark also paid the Hausers' $5 co-pay, for a total of $67.59 – or $57.82 more than Pike's got paid.
That was not only unfair to Pike's, the Hausers said. It would inevitably cost Medicare more in reimbursements and would cost senior citizens more because the higher payments would put them in the so-called “doughnut hole” faster. That's when seniors must pay 100 percent of their drug costs instead of small co-payments.
