Wednesday, June 2, 2010

GIC Contract With CVS Questioned

State contract pits CVS/Caremark against Independent Pharmacies despite federal and state investigations

By Genevieve Fraser

The Commonwealth’s Group Insurance Commission (GIC) has chosen CVS/Caremark as the state’s new pharmacy benefits manager, a move that will impact tens of thousands of state retirees and will serve to further undercut the ability of community pharmacies to remain in business. The Group Insurance Commission is a quasi-independent state agency governed by a fifteen-member Commission appointed by the Governor.

The GIC contract was drawn up with CVS/Caremark despite investigations by the Federal Trade Commission, the Massachusetts Insurance Commission and the Attorney General’s office regarding monopolistic practices by CVS/Caremark. The change over to the Rhode Island based CVS will take effect on July 1 and replace Express Scripts which has been the state vendor since 2000.

The greatest change to the consumer is “retirees will have the option of receiving their maintenance medications through the mail or picking it up at the retail level,” according to a GIC announcement. Mail order deliveries involve 90 day supplies that are transferred through unsecured delivery routes to mailboxes that are not secured.

“With CVS that problem has been solved, in that you can now get the financial benefit of mail order, but still visit the pharmacy to pick up the drugs,” Ralph White, president of the Association of State Board of Retirement stated. “The catch is that you will need to use CVS in order to participate in the mail order plan.”

CVS, which operates 7,000 retail stores throughout the country, merged with the pharmacy benefits manager (PBM) giant Caremark in 2007. Earlier, Caremark had swallowed up three pharmacy benefits manger companies.

“With the completion of the merger between CVS and Caremark, the Company became the largest provider of prescriptions in the United States, filling or managing more than 1.2 billion prescriptions annually. CVS Caremark also has more retail drugstores (6,900), more retail health clinics (over 500), more active cardholders in its retail loyalty program (over 50 million), and more pharmacists and nurse practitioners than any company in the nation. The combined drugstore-PBM giant has relationships with over 150 million consumers, one of every two Americans, and has access to data on approximately 30 percent of all prescriptions in the United States,” according to the Change to Win coalition of labor unions initiative, Alarmed about CVS/Caremark.

David Benoit, vice president of Patient Care Services for the Northeast Pharmacy Service Corporation voiced concern that problems arise from supplying 90 days worth of medicines to patients. “Many drugs require close monitoring due to possible drug interactions or reactions to particular prescriptions,” he explained. If for any reason, the patient changes to a different medication, precious dollars are wasted. He also cited problems with individuals on anti-depressants. “Overdoses with antidepressants can cause real problems with a thirty day supply; 90-day supplies are much more dangerous,” Benoit said.

Todd Brown, executive director of the Massachusetts Independent Pharmacy Association stated, “It’s disappointing that despite the fact CVS/Caremark is being investigated by several different parties the Massachusetts GIC has still decided to use them as their pharmacy benefits manager. This has a negative impact on consumers because it limits their choice of pharmacy.”

In 1970, there were 26,000 independent community pharmacies in Massachusetts. Today there are 1,000. CVS owns three hundred Massachusetts based pharmacies.

NOTE: Genevieve Fraser is an Independent candidate for state representative for the 2nd Franklin District. For further information, contact
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