Caremark to pay $38.5M over drug-switching practices

Note from John: the AG link below will take you to an Adobe download of the Official State of Ohio complaint against Caremark for alleged "deceptive practices" and other alleged nefarious actions. Sure, Caremark settled out of court without admitting guilt....you don't think they really wanted to air dirty laundry in a court of law, did you?

http://www.ag.state.oh.us/press/08/02/pr080214_c2.pdf

From John Curry, February 14, 2008
Subject: Damon Asbury and Gary Russell...please consider this!

Damon and Gary...below is what we retirees have been talking about concerning our previous PBM during all those trials and tribulations that both you and we suffered through. Rx problems were not a figment of retirees' imaginations. I would place more faith and trust in a pack of used car salesmen than I would a PBM....maybe now all 5 state retirement systems will put a little more effort into planning and developing our very own state-run PBM. Would you please share this with others who may be involved with the study of a state-run PBM? Thank you.

John Curry

"The states participating in the settlement with Illinois and Maryland are Arizona, Arkansas, California, Connecticut, Delaware, the District of Columbia, Florida, Iowa, Louisiana, Massachusetts, Michigan, Mississippi, Missouri, Montana, Nevada, New Mexico, North Carolina, Ohio, Oregon, Pennsylvania, South Carolina, South Dakota, Tennessee, Texas, Vermont, Virginia and Washington."

"The complaint also alleges that Caremark restocked and reshipped previously dispensed drugs that had been returned to Caremark’s mail-order pharmacies."

Caremark agrees to pay $38.5M over drug-switching practices
Feb 14, 2008
BusinessRockford.com

CHICAGO - An investigation led by Illinois Attorney General Lisa Madigan and Maryland Attorney General Douglas Ganslar has resulted in a 28-state, $38.5 million settlement agreement with Caremark Rx LLC, one of the nation’s largest drug-benefit management companies, Madigan’s office announced today in a news release.

Caremark processes prescription-drug claims and negotiates pharmaceutical-volume discounts for employer and government health plans. Under the settlement, Caremark must significantly change the practices it uses to ensure that patients, physicians and health plans have the information needed to make the most cost-effective buying decisions.

Madigan and Gansler led the investigation into Caremark’s drug-switching practices that resulted in today’s settlement announcement.

Under the agreement, Illinois will receive $1,263,977.77 of $22 million paid to the states for use to benefit low-income, disabled or elderly consumers of prescription medications, to promote lower drug costs for state residents, or to educate consumers concerning the cost differences among medications.

Caremark also will pay $16.5 million to the states for investigative costs, fees and consumer education, including $1.75 million for Illinois to use in consumer fraud enforcement.

Also as part of the agreement, Caremark will set aside an additional $2.5 million to reimburse patients who submit claim forms for expenses related to certain switches between cholesterol-controlling drugs. Affected consumers should expect to see a claim form in the mail from Caremark, Madigan’s release said.

The complaint against Caremark Rx LLC, and two of its subsidiaries — Caremark LLC and CaremarkPCS LLC, formerly AdvancePCS — alleges that Caremark engaged in deceptive business practices by encouraging doctors to switch patients to different brand-name prescription drugs and representing that the patients and/or health plans would save money.

According to the complaint, Caremark did not adequately inform doctors of the effect this switch would have on costs to patients and health plans. Further, Caremark allegedly did not clearly disclose to their client plans that rebates accrued from the drug-switching process would be retained by Caremark and not passed directly to the client plan.

The complaint also alleges that Caremark restocked and reshipped previously dispensed drugs that had been returned to Caremark’s mail-order pharmacies.

The states participating in the settlement with Illinois and Maryland are Arizona, Arkansas, California, Connecticut, Delaware, the District of Columbia, Florida, Iowa, Louisiana, Massachusetts, Michigan, Mississippi, Missouri, Montana, Nevada, New Mexico, North Carolina, Ohio, Oregon, Pennsylvania, South Carolina, South Dakota, Tennessee, Texas, Vermont, Virginia and Washington.