NCPA Statement on CVS Caremark-Walgreens Agreement

Alexandria, VA - June 18, 2010

 

In response to the CVS Caremark-Walgreens agreement announced today that keeps Walgreens pharmacies in the CVS Caremark network, the National Community Pharmacists Association (NCPA) issued the following statement from Arlington, Texas pharmacy owner and NCPA President Joseph H. Harmison, PD: 

“The merger of retail chain CVS and giant pharmacy benefit manager (PBM) Caremark has resulted in broken promises, restricted patient choice, stifled pharmacy competition and allegations of higher costs and violated patient privacy. The CVS Caremark-Walgreens standoff that necessitated the agreement announced today provided fresh evidence of these problems and illustrated their scope. 

“A 7,000 store, Fortune 50 mega-chain felt compelled to pull out—albeit temporarily—to force CVS Caremark to recognize these issues. That speaks volumes as to the outsized influence that the CVS Caremark chain-PBM behemoth is exerting on the patient’s ability to choose their pharmacist and on competition from independent pharmacies and other rivals with less leverage than Walgreens. 

“The limited information available about the financial agreement announced today leaves many questions unanswered. Has CVS Caremark agreed to admit Walgreens pharmacies and patients into its highly restricted ‘Maintenance Choice’ network? Is this simply a band-aid solution to help CVS Caremark get through the current pharmacy benefit manager (PBM) selling season without addressing more fundamental problems? Or did Walgreens simply cave in and agree to typical CVS Caremark terms? 

“The U.S. Federal Trade Commission’s competition and privacy bureaus and at least 24 states and municipalities are investigating CVS Caremark regarding the many anticompetitive, anti-consumer complaints lodged by patients, Members of Congress and independent community pharmacists. NCPA will continue to work to support these and other investigations in the hopes the regulators will see the need to implement meaningful changes to protect the patient’s choice of pharmacy and to restore meaningful pharmacy competition. 

“While CVS Caremark is by far the worst offender, this episode illustrates the need for regulation of the PBM industry more broadly. H.R. 5234, the PBM Audit Reform and Transparency Act of 2010, would protect the patient’s choice of pharmacy, discourage abusive pharmacy auditing practices, and require greater PBM disclosure with patients and plan sponsors to root out costly middlemen markups. Further, Congress should grant independent pharmacies greater ability, such as through H.R. 1204, to collectively negotiate PBM contracts as Walgreens did today for its 7,000 pharmacies.”

The National Community Pharmacists Association (NCPA®) represents America's community pharmacists, including the owners of more than 22,700 independent community pharmacies, pharmacy franchises, and chains. Together they represent an $88 billion health-care marketplace, employ over 65,000 pharmacists, and dispense over 40% of all retail prescriptions. To learn more go to www.ncpanet.org or read NCPA's blog, The Dose, at http://ncpanet.wordpress.com.

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