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Senate investigating CVS Caremark

The US Senate Special Committee on aging has launched an investigation into CVS Caremark over its handling of federal healthcare benefit programmes

The US Senate Special Committee on aging has launched an investigation into CVS Caremark, seeking to determine whether the company is properly handling oversight of federal healthcare benefit programmes, including the Medicare "Part D" prescription drug programme.

Committee chairman Herb Kohl has issued a letter to CVS Caremark chairman and CEO Thomas M Ryan outlining his concerns about the company's practices and requesting a slew of internal documents to aid in the investigation. The company was formed in 2007 by the merger of CVS, the largest US retail pharmacy chain, and Caremark Rx, one of the largest pharmacy benefit managers in the country.

"I am concerned by numerous reports the Committee has received of seniors being 'steered' to CVS retail or mail-order pharmacies based on promises of lower out-of-pocket costs, only to encounter higher copays, as well as higher drug charges to Part D plans," Kohl's letter states. "The committee also has received reports of claim denials for long-term care residents participating in CVS Caremark's Maintenance Choice plan, which requires residents to use a CVS retail or mail-order pharmacy for drugs they fill more than twice."

The letter requests documents including copies of all marketing materials targeted to Medicare Part D plan members.

The Federal Trade Commission (FTC) is already investigating CVS Caremark's practices, as are a number of state governments. The FTC probe began in 2009 at the urging of a bipartisan group of members of Congress.

The National Community Pharmacists Association (NCPA) expressed strong support for the new Senate investigation.

"Complaints continue to increase from patients and community pharmacists alleging CVS Caremark is engaging in anti-consumer, anti-competitive behavior," NCPA President Joseph H Harmison said in a written statement. "Seniors are both the most in need of pharmacy services and the patients arguably most vulnerable to the misleading and deceptive tactics of which CVS Caremark is accused."

30th September 2010

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