CVS Caremark
Encyclopedia
CVS Caremark Corporation is an integrated pharmacy services provider, combining a United States
pharmaceutical services company with a U.S. pharmacy chain. CVS Caremark provides pharmacy services through its over 7,000 CVS/pharmacy and Longs Drugs
stores; its pharmacy benefit management, mail order and specialty pharmacy division, Caremark Pharmacy Services; its retail-based health clinic subsidiary, MinuteClinic; and its online pharmacy, CVS.com. CVS Caremark Corporation is chartered in Delaware, and is headquartered in Woonsocket, Rhode Island
, where its pharmacy business is also headquartered. The pharmacy services business is headquartered in Nashville, Tennessee
. The company was #18 in the 2010 Fortune 500
list of the largest companies in the U.S., and is the largest company that has operations solely in the United States.
that operates within CVS Pharmacy stores.
, formerly based in Rye, New York
.
. In 1992, however, Baxter spun off Caremark as a public company. In 1996, Caremark then merged with Birmingham
, Alabama
based MedPartners/Mullikin, Inc., with the combined company being called MedPartners, Inc.. In 1998, MedPartners changed its name to Caremark Rx
.
CVS had previously operated stores in southern California and completely withdrew from the market in 1993. CVS sold virtually all the locations to American Drug Stores, the drug store division of American Stores Company. American Stores operated its drug stores in southern California as Sav-on Drugs. Ironically, many of the stores in Southern California that CVS acquired were stores that CVS had formerly owned. At the time CVS bought the stores back, Sav-on operated them as Sav-on Express stores. The Express name was used by Sav-on to help customers identify those stores that did not carry all lines of merchandise as compared to the larger traditional Sav-on Drugs location, hence the name Sav-on Express. As a result of the acquisition, the chain now operates over 6,200 stores in 43 states and the District of Columbia.
line of baby care is also in CVS stores. CVS was also first to sell single-use digital cameras and camcorders from Pure Digital.
The acquisition of the SavOn/Osco stores from the Albertson's chain provided CVS with its first opportunity for private label spirits. At a meeting for acquisition trainers, Larry Merlo reported Tom Ryan's enthusiasm, quoting, "I am not signing my name on a bottle of vodka!"
information with the Woburn
-based marketing company, Elensys. According to the Post, Elensys received information on specific prescription drugs that individual CVS customers had purchased and used this information to send targeted direct mailings urging customers to renew prescriptions and promoting other products in which they might be interested. CVS and Elensys argued that there were no privacy issues because Elensys was acting solely as a contractor
to CVS, and because the purpose of the mailings was to educate consumers. CVS claimed that it never shared customers' medical histories
with Elensys (despite the Washington Post's indirect evidence that they had). George D. Lundberg, editor of the Journal of the American Medical Association
, called the practice "a gross invasion" of privacy
. Following a firestorm of criticism and complaints by consumers, CVS discontinued the relationship with Elensys, and moved the practice in-house.
fraud scandals.
The combined price to settle this dispute with the U.S. Government cost the company over $250,000,000.
The lawsuits said that the acquired company, AdvancePCS, accepted kickbacks from drug makers to promote their products over those of rivals under contracts with government programs including the Federal Employees Health Benefit Program, the Mail Handlers Health Benefit Program and Medicare health maintenance plans.
There was no admission of wrongdoing by Caremark or AdvancePCS.
CVS Caremark Corp. has changed their practices. The formulary revision process considers manufacturer rebates, payments from drug manufacturers for low placement on PBM formularies, along with average warehoused price (AWP), drug availability, and bulk discounts when choosing at which co-pay a brand name drug should be placed.
reported:
United States
The United States of America is a federal constitutional republic comprising fifty states and a federal district...
pharmaceutical services company with a U.S. pharmacy chain. CVS Caremark provides pharmacy services through its over 7,000 CVS/pharmacy and Longs Drugs
Longs Drugs
Longs Drugs is an American chain of over 40 drug stores throughout the State of Hawaii. Before being acquired by CVS Caremark in 2008, it was a chain of over 500 stores, located primarily on the West Coast of the United States...
stores; its pharmacy benefit management, mail order and specialty pharmacy division, Caremark Pharmacy Services; its retail-based health clinic subsidiary, MinuteClinic; and its online pharmacy, CVS.com. CVS Caremark Corporation is chartered in Delaware, and is headquartered in Woonsocket, Rhode Island
Woonsocket, Rhode Island
Woonsocket is a city in Providence County, Rhode Island, United States. The population was 41,186 at the 2010 census, making it the sixth largest city in the state. Woonsocket lies directly south of the Massachusetts border....
, where its pharmacy business is also headquartered. The pharmacy services business is headquartered in Nashville, Tennessee
Nashville, Tennessee
Nashville is the capital of the U.S. state of Tennessee and the county seat of Davidson County. It is located on the Cumberland River in Davidson County, in the north-central part of the state. The city is a center for the health care, publishing, banking and transportation industries, and is home...
. The company was #18 in the 2010 Fortune 500
Fortune 500
The Fortune 500 is an annual list compiled and published by Fortune magazine that ranks the top 500 U.S. closely held and public corporations as ranked by their gross revenue after adjustments made by Fortune to exclude the impact of excise taxes companies collect. The list includes publicly and...
list of the largest companies in the U.S., and is the largest company that has operations solely in the United States.
Background
CVS Caremark has three operating segments: CVS/pharmacy, Caremark Pharmacy Services, and MinuteClinic, a walk in clinicMinuteClinic
MinuteClinic, a subsidiary of CVS Caremark Corporation, is the largest provider of retail health clinics in the United States. As of December 31, 2009, it operated 569 clinics in 25 states...
that operates within CVS Pharmacy stores.
- CVS/pharmacy is one of the nation's largest retail pharmacy chains, with over 7,000 stores across 41 states. With more than 40 years in the retail pharmacy industry, CVS/pharmacy generates over 68% of its revenue from the pharmacy business. CVS/pharmacy fills more than one of every seven retail prescriptions in America, and one of every five in their own markets. Their ExtraCare program boasts over 65 million cardholders, making it the largest retail loyalty program in the country.
- Caremark Pharmacy Services, one of the nation's leading pharmacy benefit management (PBM) companies, provides comprehensive prescription benefit management services to over 2,000 health plans, including corporations, managed care organizations, insurance companies, unions and government entities. With net revenue of approximately $37 billion (including approximately $5.8 billion of retail copayments) in 2006, they are also one of the largest PBMs. Caremark operates a national retail pharmacy network with over 60,000 participating pharmacies, as well as 11 mail service pharmacies. Its call centers have been recognized for customer satisfaction excellence by J.D. Power & Associates (J.D. Power & Associates is also a client of Caremark). Caremark operates over 70 specialty pharmacies, and its specialty pharmacies have been accredited by the Joint Commission. Its disease managementDisease management (health)Disease management is defined as "a system of coordinated health care interventions and communications for populations with conditions in which patient self-care efforts are significant." For people who can access health care practitioners or peer support it is the process whereby persons with...
programs through Accordant(R) have also been accredited by the National Committee for Quality AssuranceNational Committee for Quality AssuranceThe National Committee for Quality Assurance is an independent 501 non-profit organization in the United States designed to improve health care quality. It was established in 1990 with support from the Robert Wood Johnson Foundation. NCQA manages voluntary accreditation programs for individual...
.
- MinuteClinicMinuteClinicMinuteClinic, a subsidiary of CVS Caremark Corporation, is the largest provider of retail health clinics in the United States. As of December 31, 2009, it operated 569 clinics in 25 states...
is the nation's largest walk-in medical clinic, with 570 locations in 25 states.
Name
CVS Caremark began as Melville CorporationMelville Corporation
Melville Corporation, formerly based in Rye, New York, was a large retail holding corporation incorporated in 1922 as the Melville Shoe company by Ward Melville. It changed its name to CVS Corporation in 1996...
, formerly based in Rye, New York
New York
New York is a state in the Northeastern region of the United States. It is the nation's third most populous state. New York is bordered by New Jersey and Pennsylvania to the south, and by Connecticut, Massachusetts and Vermont to the east...
.
CVS
The CVS name once stood for Consumer Value Stores; though Thomas Ryan, CVS Caremark's former CEO, has said he now considers it to stand for "Convenience, Value and Service".Caremark
Caremark was established in 1979 as Home Health Care of America, and changed its name to Caremark in 1985. In 1987, Caremark was acquired by, then became a subsidiary of, Baxter InternationalBaxter International
Baxter International Inc. , is an American health care company with headquarters in Deerfield, Illinois. The company primarily focuses on products to treat hemophilia, kidney disease, immune disorders and other chronic and acute medical conditions...
. In 1992, however, Baxter spun off Caremark as a public company. In 1996, Caremark then merged with Birmingham
Birmingham, Alabama
Birmingham is the largest city in Alabama. The city is the county seat of Jefferson County. According to the 2010 United States Census, Birmingham had a population of 212,237. The Birmingham-Hoover Metropolitan Area, in estimate by the U.S...
, Alabama
Alabama
Alabama is a state located in the southeastern region of the United States. It is bordered by Tennessee to the north, Georgia to the east, Florida and the Gulf of Mexico to the south, and Mississippi to the west. Alabama ranks 30th in total land area and ranks second in the size of its inland...
based MedPartners/Mullikin, Inc., with the combined company being called MedPartners, Inc.. In 1998, MedPartners changed its name to Caremark Rx
Caremark Rx
Caremark Pharmacy Services is the prescription benefit management subsidiary of CVS Caremark Corporation, headquartered in Woonsocket, Rhode Island and Nashville, Tennessee.-Company history:...
.
Acquisitions and growth
- The first CVS store, selling health and beauty products, was founded in Lowell, Mass. by brothers Stanley and Sidney Goldstein and partner Ralph Hoagland in 1963.
- In 1964, CVS had 17 stores that sold primarily health and beauty products.
- In 1967, CVS began operation of its first stores with pharmacy departments, opening locations in Warwick and Cumberland, R.I.
- In 1969, CVS was sold to Melville Corporation.
- By 1970, CVS operated 100 stores in New England and the Northeast.
- In 1972, CVS nearly doubled in size with its acquisition of 84 Clinton Drug and Discount Stores. The purchase introduced CVS to the Midwest with stores in Indiana.
- In 1977, CVS acquired the 36-store New Jersey–based Mack Drug chain.
- In 1980, CVS became the 15th largest pharmacy chain in the U.S. with 408 stores and $414 million in sales.
- In 1988, CVS celebrated its 25th anniversary, finishing the year with nearly 750 stores and sales of about $1.6 billion.
- Since 1990, CVS has been rapidly growing in order to become a national drug store chain.
- In 1990, CVS acquired 500-store Peoples DrugPeoples DrugPeoples Drug was a chain of drug stores based in Alexandria, VA, a suburb of Washington, D.C.. Founded in 1904, Peoples was subsequently purchased by Lane Drug in 1975, Imasco in 1984, and finally by CVS in 1990, which continued to run the stores under the Peoples banner until 1994, at which time...
, which established the company in new mid-Atlantic markets including Washington, D.C., Pennsylvania, Maryland and Virginia. Peoples Drug stores were converted into CVS stores in May 1994.
- In 1994, CVS launched PharmaCare, a pharmacy benefit management (PBM) company providing a wide range of services to employers, managed care organizations, insurance companies, unions and government agencies.
- At the beginning of 1996, CVS was a division of Melville CorporationMelville CorporationMelville Corporation, formerly based in Rye, New York, was a large retail holding corporation incorporated in 1922 as the Melville Shoe company by Ward Melville. It changed its name to CVS Corporation in 1996...
. During that year, Melville Corporation divested their other retail companies such as Linens 'N ThingsLinens 'n ThingsLinens 'n Things is an online retailer of home textiles, housewares and decorative home accessories. Until 2008, the company also did business as a big box retailer under the name Linens 'n Things, Inc., headquartered in Clifton, New Jersey, United States, and did business across the United States...
, KB ToysKB ToysK·B Toys was a chain of mall-based retail toy stores in the United States. It was founded in 1922 by the Kaufman brothers. K·B operated 605 stores in 44 U.S. states, Puerto Rico as well as Guam. It was privately held in Pittsfield, Massachusetts...
, Foot Action, and MarshallsMarshallsMarshalls, Inc., is a chain of American department stores owned by TJX Companies. Marshalls has over 750 conventional stores, as well as larger stores named Marshalls Mega Store, covering 42 states and Puerto Rico. Marshalls expanded into Canada in March 2011...
. Following the divestment, Melville changed their name to CVS Corporation and traded on the New York Stock Exchange with the symbol "CVS".
- During 1997, when it had about 1,400 stores, CVS doubled its size by purchasing the much larger RevcoRevcoRevco Discount Drug Stores , once based in Twinsburg, Ohio, was a major drug store chain operating through the Ohio Valley, the Mid-Atlantic states, and the Southeastern United States. The chain's stock was traded on the New York Stock Exchange under the ticker RXR...
drug stores, which had over 2,500 stores. Revco brought CVS into the Ohio Valley and SoutheasternSoutheastern United StatesThe Southeastern United States, colloquially referred to as the Southeast, is the eastern portion of the Southern United States. It is one of the most populous regions in the United States of America....
U.S.; previously CVS' footprint had not been south of VirginiaVirginiaThe Commonwealth of Virginia , is a U.S. state on the Atlantic Coast of the Southern United States. Virginia is nicknamed the "Old Dominion" and sometimes the "Mother of Presidents" after the eight U.S. presidents born there...
CVS could afford such a large purchase because of its recent Melville divesture.
- Also in 1997, CVS ProCare was established as a specialty pharmacy subsidiary of CVS.
- In 1998, CVS acquired 207 stores from Arbor DrugsArbor DrugsArbor Drugs was a chain of drug stores based in Troy, Michigan.It was founded by Eugene Applebaum and Bruno Manni in 1974, when they merged five stores and incorporated the chain under the Arbor name. In 1986, the chain went public, opening on NASDAQ under the stock symbol ARBR...
, bringing its store total to 4,100 across 24 states. The transaction gave CVS its first stores in Michigan and the instant lead in the highly competitive Detroit market.
- In 1999, CVS acquired Soma.com, the first online pharmacyOnline pharmacyOnline pharmacies, Internet pharmacies, or Mail Order Pharmacies are pharmacies that operate over the Internet and send the orders to customers.Online or internet pharmacies might include:...
, and renamed it CVS.com to become the first fully integrated online and brick-and-mortar pharmacy offering to consumers.
- In 2000 CVS acquired Stadtlander pharmacy from Bergen Brunswig Corporation for an undisclosed cash price. This made CVS ProCare the largest specialty pharmacy in the U.S. at the time. The transaction also included a distribution agreement that called for Bergen Brunswig to provide ProCare with $2.5 billion of pharmaceuticals over the next five years.
- CVS has also been expanding its store base through new store openings. CVS entered the ChicagoChicagoChicago is the largest city in the US state of Illinois. With nearly 2.7 million residents, it is the most populous city in the Midwestern United States and the third most populous in the US, after New York City and Los Angeles...
market in 2001, which at the time was dominated by Walgreens. In 2004, it has entered the CaliforniaCaliforniaCalifornia is a state located on the West Coast of the United States. It is by far the most populous U.S. state, and the third-largest by land area...
market, which was dominated by Longs DrugsLongs DrugsLongs Drugs is an American chain of over 40 drug stores throughout the State of Hawaii. Before being acquired by CVS Caremark in 2008, it was a chain of over 500 stores, located primarily on the West Coast of the United States...
, Rite AidRite AidRite Aid is a drugstore chain in the United States and a Fortune 500 company headquartered in East Pennsboro Township, Pennsylvania, near Camp Hill. Rite Aid is the largest drugstore chain on the East Coast and the third largest drugstore chain in the U.S....
, and WalgreensWalgreensWalgreen Co. , doing business as Walgreens , is the largest drugstore chain in the United States of America. As of August 31st, the company operates 8,210 locations across all 50 states, the District of Columbia and Puerto Rico. Founded in Chicago, Illinois in 1901, and has since expanded...
. It opened stores in Las Vegas, NevadaLas Vegas, NevadaLas Vegas is the most populous city in the U.S. state of Nevada and is also the county seat of Clark County, Nevada. Las Vegas is an internationally renowned major resort city for gambling, shopping, and fine dining. The city bills itself as The Entertainment Capital of the World, and is famous...
, Houston, TexasHouston, TexasHouston is the fourth-largest city in the United States, and the largest city in the state of Texas. According to the 2010 U.S. Census, the city had a population of 2.1 million people within an area of . Houston is the seat of Harris County and the economic center of , which is the ...
, and Dallas, TexasDallas, TexasDallas is the third-largest city in Texas and the ninth-largest in the United States. The Dallas-Fort Worth Metroplex is the largest metropolitan area in the South and fourth-largest metropolitan area in the United States...
, right before its purchase of Eckerd. CVS has also begun to open stores in ArizonaArizonaArizona ; is a state located in the southwestern region of the United States. It is also part of the western United States and the mountain west. The capital and largest city is Phoenix...
.
- In 2004, CVS purchased 1,268 Eckerd drug stores and Eckerd Health Services, Eckerd’s PBM/Mail-order pharmacy business, from JCPenney. Most of the former Eckerd stores that CVS purchased (and converted into CVS stores) were in FloridaFloridaFlorida is a state in the southeastern United States, located on the nation's Atlantic and Gulf coasts. It is bordered to the west by the Gulf of Mexico, to the north by Alabama and Georgia and to the east by the Atlantic Ocean. With a population of 18,801,310 as measured by the 2010 census, it...
and TexasTexasTexas is the second largest U.S. state by both area and population, and the largest state by area in the contiguous United States.The name, based on the Caddo word "Tejas" meaning "friends" or "allies", was applied by the Spanish to the Caddo themselves and to the region of their settlement in...
. Since JCPenney credit cards were accepted at Eckerd drugs stores, they have been continued to be used at CVS.
- Also in 2004, CVS ProCare became part of PharmaCare. All ProCare stores were re-branded as PharmaCare stores.
- On January 23, 2006, CVS announced that it had agreed to acquire the freestanding drug store operations of supermarket chain Albertsons. The deal included the acquisition of 700 drug stores trading under the Osco DrugOsco DrugOsco Drug is a chain of pharmacy stores which today operate as in-store pharmacies under SuperValu Pharmacies. Osco Pharmacy is found in Jewel-Osco, Albertsons, Shaw's and Star Market, while Sav-on Pharmacy is found in Acme and Albertsons. Since 2006, Osco is a wholly owned subsidiary of...
and Sav-On Drugs banners, mostly in the Midwest and Southwestern United States with primary concentration of stores in Southern California and Northern Illinois; and was formally completed on June 2, 2006. Transition of Sav-On and Osco stores to the CVS brand began shortly thereafter, and was completed by December 2006. CVS now dominates the Southern California market. Also included were Albertsons Health'n'Home (now CVS Home Health) durable medical equipment (DME) stores. Approximately 28 CVS Home Health locations are present in Arizona, California and the Kansas City area, representing CVS' first venture into the specialized DME market.
CVS had previously operated stores in southern California and completely withdrew from the market in 1993. CVS sold virtually all the locations to American Drug Stores, the drug store division of American Stores Company. American Stores operated its drug stores in southern California as Sav-on Drugs. Ironically, many of the stores in Southern California that CVS acquired were stores that CVS had formerly owned. At the time CVS bought the stores back, Sav-on operated them as Sav-on Express stores. The Express name was used by Sav-on to help customers identify those stores that did not carry all lines of merchandise as compared to the larger traditional Sav-on Drugs location, hence the name Sav-on Express. As a result of the acquisition, the chain now operates over 6,200 stores in 43 states and the District of Columbia.
- On July 13, 2006, CVS announced that it had entered into a definitive agreement to acquire Minneapolis-based MinuteClinicMinuteClinicMinuteClinic, a subsidiary of CVS Caremark Corporation, is the largest provider of retail health clinics in the United States. As of December 31, 2009, it operated 569 clinics in 25 states...
, the pioneer and largest provider of retail-based health clinics in the U.S. MinuteClinic operates as a wholly owned subsidiary of CVS Corporation. MinuteClinic health care centers are staffed by board-certified nurse practitioners and physician assistants who are trained to diagnose, treat and provide prescriptions (when clinically appropriate) for common family illnesses such as strep throat and ear, eye, sinus, bladder and bronchial infections. MinuteClinic also offers common vaccinations, such as flu shots, tetanus, and Hepatitis A & B. The clinics are also supported by physicians who collaborate with the nurse practitioners to assure the highest quality of care. CVS plans to have 400 MinuteClinics by the end of 2007, most of which within CVS/pharmacy locations, and are targeting a total of about 2,500.
- During Fall 2006, Caremark Rx, a pharmacy benefits management [PBM] company, was facing fierce acquisition from Express Scripts, an opposing PBM. CVS/Pharmacy entered into the sale, offering a cash/stock mix, board seats, and a merge with CVS's existing Pharmacare PBM. Though touted as a merger, CVS acquired Caremark Rx on March 22, 2007 renaming the company CVS Caremark Corp. and the corporate headquarters remained in Woonsocket, RI. The pharmacy services business, including the combined pharmacy benefits management (PBM), specialty pharmacy, and disease management businesses, is headquartered in Nashville, TN. Tom Ryan, the Chairman & CEO of CVS remained president and CEO of CVS Caremark Corporation, while Caremark's Edwin Crawford became the Chairman of the Board. On November 7, 2007 Edwin Crawford quit his position, and Tom Ryan was again named Chairman of the Board.
- On August 12, 2008 CVS announced that they would acquire Longs Drugs Stores Corp., in a $2.9 billion deal. Longs operates 521 stores in the Western United States, 41 of these stores in Hawaii alone, with a heavy concentration in California. This will strengthen the 2006 acquisition by CVS of Sav-On Drugs, also primarily in California and now operating under the CVS brand. CVS will also enter the Hawaiian market which it did not previously operate, and retain the well-established Longs name there. This deal is estimated to bring over $100 million a year in cost savings to the combined company. It closed October 30, 2008.
- On November 3, 2008 CVS opens their first Beauty 360 store in Washington, DC. Beauty 360 features a wide range of prestige and niche beauty brands from the skincare, cosmetics, men's grooming and fragrance categories. Staffed with trained and licensed professionals, they offer brand-specific services including mini-manicures, express facials, hand massages and make-up application. CVS expects to open about 50 Beauty 360 stores by the end of 2009, with the majority of the stores being located adjacent to existing CVS/pharmacy locations.
Community involvement
- The CVS Caremark Charitable Trust was established to provide funding for health care, education and community involvement initiatives in communities where CVS/pharmacy stores are located.
- Since 1978, CVS Samaritan Vans have provided free roadside assistance to motorists and the community in numerous cities. They are "emergency response vehicles" that patrol select major freeways of Chicago, Charlotte, Cincinnati, Cleveland, Boston, Detroit, Indianapolis, Providence and Washington, D.C. in search of motorists in need. The drivers have a multitude of talents and certifications. They are Nationally Certified Auto Mechanics, State Certified Emergency Medical Technicians (EMTs) or Paramedics, and Nationally Certified Animal Control Officers. They are capable of making numerous on-site auto repairs, administering medical help, calming a tense situation or using their communication equipment to summon the state police or other assistance. Each year, the CVS Samaritan Vans travel about 600000 miles (965,604 km), checking and assisting nearly 50,000 people, and responding to more than 61,000 roadway incidents.
- Played at the Rhode Island Country Club, the CVS Caremark Charity Classic was established to raise money for the support of non-profit agencies throughout New England. Since 1999, it has raised over $8 million for charity. The event has featured golf legends such as Arnold Palmer, Jack Nicklaus, Hale Irwin, and Gary Player along with today's top stars like David Duval, Chris DiMarco, Davis Love III, & Scott McCarron.
Private label
CVS has an extensive assortment of various private labels and proprietary brands. In addition to CVS Brand, CVS also carries exclusive store brands under the names of Just the Basics, Essence of Beauty, Gold Emblem, Absolutely Divine, Blade, Earth Essentials, Caliber, and Life Fitness. CVS also holds exclusive contracts to sell proprietary brands such as Nuprin, Christophe, PreVentin-AT, 24/7, Skin Effects, and the European brand Lumene. A new exclusive PlayskoolPlayskool
Playskool is an American company that produces educational toys and games for children. It is a subsidiary of Hasbro, Inc., and is headquartered in Pawtucket, Rhode Island.-History:...
line of baby care is also in CVS stores. CVS was also first to sell single-use digital cameras and camcorders from Pure Digital.
The acquisition of the SavOn/Osco stores from the Albertson's chain provided CVS with its first opportunity for private label spirits. At a meeting for acquisition trainers, Larry Merlo reported Tom Ryan's enthusiasm, quoting, "I am not signing my name on a bottle of vodka!"
Elensys
In 1998, the Washington Post reported that CVS Corporation appeared to be sharing prescription drugPrescription drug
A prescription medication is a licensed medicine that is regulated by legislation to require a medical prescription before it can be obtained. The term is used to distinguish it from over-the-counter drugs which can be obtained without a prescription...
information with the Woburn
Woburn, Massachusetts
Woburn is a city in Middlesex County, Massachusetts, USA. The population was 38,120 at the 2010 census. Woburn is located north of Boston, Massachusetts, and just south of the intersection of I-93 and I-95.- History :...
-based marketing company, Elensys. According to the Post, Elensys received information on specific prescription drugs that individual CVS customers had purchased and used this information to send targeted direct mailings urging customers to renew prescriptions and promoting other products in which they might be interested. CVS and Elensys argued that there were no privacy issues because Elensys was acting solely as a contractor
Independent contractor
An independent contractor is a natural person, business, or corporation that provides goods or services to another entity under terms specified in a contract or within a verbal agreement. Unlike an employee, an independent contractor does not work regularly for an employer but works as and when...
to CVS, and because the purpose of the mailings was to educate consumers. CVS claimed that it never shared customers' medical histories
Medical history
The medical history or anamnesis of a patient is information gained by a physician by asking specific questions, either of the patient or of other people who know the person and can give suitable information , with the aim of obtaining information useful in formulating a diagnosis and providing...
with Elensys (despite the Washington Post's indirect evidence that they had). George D. Lundberg, editor of the Journal of the American Medical Association
Journal of the American Medical Association
The Journal of the American Medical Association is a weekly, peer-reviewed, medical journal, published by the American Medical Association. Beginning in July 2011, the editor in chief will be Howard C. Bauchner, vice chairman of pediatrics at Boston University’s School of Medicine, replacing ...
, called the practice "a gross invasion" of privacy
Privacy
Privacy is the ability of an individual or group to seclude themselves or information about themselves and thereby reveal themselves selectively...
. Following a firestorm of criticism and complaints by consumers, CVS discontinued the relationship with Elensys, and moved the practice in-house.
Boston prescriptions
During 2005 a rash of prescription mistakes came to light in some of CVS Corporation's Boston-area stores. An investigation confirmed 62 errors or quality problems going back to 2002. In February 2006, the state Board of Pharmacy announced that the non-profit Institute for Safe Medication Practices (ISMP) would monitor all Massachusetts stores for the next two years.Health & Medicare Fraud
In the late 1980s and early 1990s Caremark RX was involved in a number of health fraud and MedicareMedicare (United States)
Medicare is a social insurance program administered by the United States government, providing health insurance coverage to people who are aged 65 and over; to those who are under 65 and are permanently physically disabled or who have a congenital physical disability; or to those who meet other...
fraud scandals.
The combined price to settle this dispute with the U.S. Government cost the company over $250,000,000.
Pharmaceutical Kickbacks
In 2005, Caremark RX paid $137.5 million to settle federal lawsuits filed by whistle-blowers that accused a company it acquired in 2003 of improper dealings with pharmaceutical manufacturers.The lawsuits said that the acquired company, AdvancePCS, accepted kickbacks from drug makers to promote their products over those of rivals under contracts with government programs including the Federal Employees Health Benefit Program, the Mail Handlers Health Benefit Program and Medicare health maintenance plans.
There was no admission of wrongdoing by Caremark or AdvancePCS.
CVS Caremark Corp. has changed their practices. The formulary revision process considers manufacturer rebates, payments from drug manufacturers for low placement on PBM formularies, along with average warehoused price (AWP), drug availability, and bulk discounts when choosing at which co-pay a brand name drug should be placed.
Deceptive Business Practices
In February 2008, CVS settled a large civil lawsuit for deceptive business practices. The Kaiser Family FoundationKaiser Family Foundation
The Henry J. Kaiser Family Foundation , or just Kaiser Family Foundation, is a U.S.-based non-profit, private operating foundation headquartered in Menlo Park, California. It focuses on the major health care issues facing the nation, as well as the U.S. role in global health policy...
reported:
CVS has agreed to a a $38.5 million settlement in a multi-state civil deceptive-practices lawsuit against pharmacy benefit manager Caremark filed by 28 attorneys general, the Chicago TribuneChicago TribuneThe Chicago Tribune is a major daily newspaper based in Chicago, Illinois, and the flagship publication of the Tribune Company. Formerly self-styled as the "World's Greatest Newspaper" , it remains the most read daily newspaper of the Chicago metropolitan area and the Great Lakes region and is...
reports. The attorneys general, led by Lisa Madigan (D) of Illinois and Douglas Ganslar (D) of Maryland, allege that Caremark "engaged in deceptive business practices" by informing physicians that patients or health plans could save money if patients were switched to certain brand-name prescription drugs (Miller, Chicago Tribune, 2/14).
However, the switch often saved patients and health plans only small amounts or increased their costs, while increasing Caremark's profits, Connecticut Attorney General Richard Blumenthal (D) said (Levick, Hartford Courant, 2/15). Pennsylvania Attorney General Tom Corbett (R) said the PBM kept discounts and rebates that should have been passed on to employers and patients (Levy, APAssociated PressThe Associated Press is an American news agency. The AP is a cooperative owned by its contributing newspapers, radio and television stations in the United States, which both contribute stories to the AP and use material written by its staff journalists...
/San Francisco ChronicleSan Francisco Chroniclethumb|right|upright|The Chronicle Building following the [[1906 San Francisco earthquake|1906 earthquake]] and fireThe San Francisco Chronicle is a newspaper serving primarily the San Francisco Bay Area of the U.S. state of California, but distributed throughout Northern and Central California,...
, 2/14). In addition, Caremark did not "adequately inform doctors" of the full financial effect of the switch and did not disclose that the switch would increase Caremark's profits, the lawsuit alleges (Chicago Tribune, 2/14).
...The settlement prohibits CVS from requesting prescription drug switches in certain cases, such as when the cost to the patient would be higher with the new prescription drug; when the original prescription drug's patent will expire within six months; and when patients were switched from a similar prescription drug within the previous two years (Hartford Courant, 2/15). Patients also have the ability to decline a switch from the prescribed treatment to the prescription offered by the pharmacy under the settlement, Madigan said (Bloomberg News/Philadelphia Inquirer, 2/15).