Pharmacy benefit manager CVS Caremark has agreed to refund consumers $5 million to settle allegations that it misrepresented the price of certain prescription drugs in one of its Medicare plans, according to an announcement by the Federal Trade Commission on Thursday, the Wall Street Journal reports (Kendall, Wall Street Journal, 1/13).
Details of Charges
According to FTC, CVS Caremark from 2007 through at least November 2008 incorrectly posted prices for some medications that were sold to Medicare beneficiaries at CVS and Walgreen pharmacies under its RxAmerica plan.
In some instances, the prices the pharmacies charged were up to 10 times higher than prices posted on websites beneficiaries used to select their Medicare Part D plans, FTC said. The higher prices pushed many beneficiaries into the "doughnut hole," the prescription drug coverage gap that requires them to pay out-of-pocket, the New York Times reports.
FTC said the settlement, which CVS Caremark will pay out in checks to affected beneficiaries, ends a more than two-year investigation into allegations that the company engaged in deceptive pricing and antitrust and anti-competitive business practices. FTC noted the latter charges have been dismissed (Abelson/Singer, New York Times, 1/12).
The settlement has yet to finalized, according to the Washington Post.
CVS Response
CVS officials said that the pricing discrepancy was inadvertent, adding that it was rectified once they learned of the problem.
In a statement, CVS Caremark's Chief Legal Officer Douglas Sgarro said, "It is important to note that, at the conclusion of this comprehensive investigation, the FTC made no allegations of antitrust law violations or anti-competitive behavior associated with any of our business practices, products or service offerings" (ElBoghdady, Washington Post, 1/12).