Patients Warned on Prescription Switching

via Daily Advantage from PharmaLive.com

"The Nebraska Academy of Family Physicians joined several other organizations in warning against a push by insurers to switch prescriptions written by physicians to less expensive substitutes. "This switch can have unwanted effects for patients, prolonging illnesses, increasing hospitalizations and prompting other health issues," said the group's president. Last December, a bill to stop prescription switching was introduced in the Massachusetts legislature."

More often, these switches can increase quality and lower costs. I remember the ongoing battle we had over Vioxx and our efforts to encourage use of higher value medications. In the end, we had fewer hospitalizations, few deaths and >50% lower drug costs. More and more physicians also realize that unnecessary use of more expensive medications simply make it more difficult to pay for other services and increases pressure on their own reimbursement.

However, I often do not push for switching patients. Since most patient change therapy within a year anyway, you can achieve positive results by promoting the prescribing of higher value medications for new prescriptions.

Reason #123,308 to Check your PBM Contract

The allegations against CVS Caremark involved encouraging switches to brand-name drugs and keeping the resulting drug company payments, rather than passing these on to the payer. Take a look at Medco's 3Q07 Manufacturer Report for an idea of how "rebates" no longer reflect PBM revenues from drug companies. Less than 1/2 of payments get classified as rebates.

Please talk to your consultant about proper contractual protections.

CVS Caremark Statement on State Settlement

WOONSOCKET, R.I.--(BUSINESS WIRE)--Feb. 14, 2008--CVS Caremark Corporation (NYSE: CVS) announced today that it has resolved a multi-state consumer protection investigation of certain alleged PBM business practices of its legacy AdvancePCS and legacy Caremark subsidiaries. As previously disclosed, this investigation began in 2004 and is similar to multi-state consumer protection investigations of other major PBM companies.

The Company's AdvancePCS (now known as CaremarkPCS) and Caremark subsidiaries have entered into a settlement agreement and consent order with 28 states and the District of Columbia. In entering the settlement, they have expressly denied any and all allegations, and there has been no finding of wrongdoing or inappropriate business conduct on their part.
The Company has agreed to pay $12 million in settlement on behalf of legacy AdvancePCS, $10 million in settlement on behalf of legacy Caremark, $16.5 million in state investigative costs and up to $2.5 million as reimbursement for certain medical tests. The mutually agreed consent order requires AdvancePCS and Caremark to maintain certain PBM business practices and will not result in significant changes to current business practices. In that regard, the Company is committed to driving value for its clients and plan participants by effectively managing pharmaceutical costs and improving health care outcomes
The Company has agreed to enter into the settlement to confirm its continued commitment to compliance with state consumer protection laws in serving the pharmacy benefit needs of its PBM clients and their participants and to avoid the uncertainty and expense of the investigation. The amounts to be paid were previously accrued for by legacy Caremark in prior fiscal periods, so the settlement will not affect the 2008 financial results of the Company.
About CVS Caremark
CVS Caremark is the largest provider of prescriptions and related healthcare services in the nation. The Company fills or manages more than 1 billion prescriptions annually. Through its unmatched breadth of service offerings, CVS Caremark is transforming the delivery of health care services in the U.S. The Company is uniquely positioned to effectively manage costs and improve healthcare outcomes through its approximately 6,200 CVS/pharmacy 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. General information about CVS Caremark is available through the Investor Relations portion of the Company's website, at http://investor.cvs.com, as well as through the pressroom portion of the Company's website, at www.cvs.com/pressroom.

CONTACT: CVS Caremark Corporation
Investor Contact: Nancy Christal, 914-722-4704 Senior Vice President Investor Relations or Media Contact: Eileen Howard Dunn, 401-770-4561 Senior Vice President Corporate Communications SOURCE: CVS Caremark Corporation