Connecticut Attorney General's Office
Press Release
Attorney General Investigating CVS Caremark Threat To Terminate Consumer Discount Drug Program
June 22, 2010
Attorney General Richard Blumenthal today announced an investigation of CVS Caremark’s threat to terminate a consumer discount drug program because the law requires the chain to extend the same discounts to the state’s Medicaid program.
Blumenthal, in cooperation with Department of Consumer Protection (DCP) Commissioner Jerry Farrell, Jr., has sent CVS Caremark a subpoena demanding the company explain why providing the discounts to the state Medicaid program would result in termination of its Health Savings Pass program in Connecticut and other information.
Blumenthal said in a letter to CVS Caremark CEO Thomas M. Ryan, “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’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.
Under the Health Savings Pass program, consumers pay $10 a year to fill a 90-day prescription of one of 400 generic drugs for $9.99 and receive other benefits. State law requires pharmacies to charge Medicaid the lowest drug price they offer consumers, which the state says obligates CVS to provide the Health Savings Pass discount, potentially saving taxpayers millions of dollars.
CVS disagreed, prompting the General Assembly to approve a law in the last session clarifying the requirement. CVS responded by threatening to end its Health Savings Pass program in Connecticut.
Blumenthal said in his letter to Ryan, “I urge you in the strongest terms to reconsider this course of action. Many Connecticut residents continue to deal with the dual stresses of economic hardship and inadequate prescription drug coverage. CVS Caremark’s intention to abruptly cancel a popular program that has assisted families in defraying the costs of medications is indeed alarming and raises significant legal questions.
“Furthermore, CVS Caremark also has an obligation to charge the state of Connecticut the same discounted price for drugs for Connecticut Medicaid recipients that CVS Caremark charges to customers enrolled in the Health Savings Pass pharmacy discount program.
“We are troubled by your representation to Gov. Rell and to the general public that CVS Caremark recently decided that it was ‘economically unfeasible to continue the [Health Savings Pass] program in Connecticut.’ We need to see and understand the factual basis for that claim in order to assess its accuracy.”
In comments separate from his letter, Blumenthal added, “Health care costs -- including pharmaceuticals -- are out of control and must be reined in. Extending Health Savings Pass discounts to Medicaid will save taxpayers millions -- much needed relief in the battle against spiraling health care expenses. I will battle to enforce the law to reduce medical costs, making quality health care more affordable for consumers and businesses.”
Blumenthal is also investigating whether the proposed cancellation would violate the contractual rights and other legal protections of consumers who paid to enroll in the Health Savings Pass program.
Blumenthal’s subpoena demanded CVS provide:
· Any and all documents backing up its statement that extending Health Savings Pass discounts to the state Medicaid program makes the plan “economically unfeasible” in Connecticut, as well as all materials regarding its economic feasibility in other states;
· A list of drugs covered by the program, prices charged enrollees compared to those billed Connecticut’s Medicaid program and the actual cost of those medications to CVS;
· The number of Connecticut consumers enrolled in the Health Savings Pass program and the states where it is offered;
· Consumer contracts, marketing materials and all other documents relating to the program.
The deadline for compliance is July 9.