June 24, 2010
The state of Connecticut is investigating the threat by CVS Caremark to end a consumer discount drug program because the law requires the chain to extend the same discounts to the state's Medicaid program.
Attorney General Richard Blumenthal and Department of Consumer Protection (DCP) Commissioner Jerry Farrell, Jr., have sent CVS Caremark a subpoena demanding it explain why providing the discounts to the state Medicaid program would result in termination of its Health Savings Pass program in Connecticut and other information.
"We are concerned that you have singled out the state of Connecticut for elimination of the drug discount program considering that the Health Savings Pass program continues to operate in other states where CVS Caremark does business," Blumenthal said in a letter to CVS Caremark CEO Thomas M. Ryan.
CVS Caremark's actions are at odds with other pharmacies that have extended their discount program drug pricing to the state Medicaid program and may be inconsistent with CVS Caremark's actions in other states.
Under the Health Savings Pass program, consumers pay $10 a year to fill a 90-day prescription for one of 400 generic drugs for $9.99 and receive other benefits. State law requires pharmacies to charge Medicaid the lowest drug price they offer consumers, which the state says obligates CVS to provide the Health Savings Pass discount, potentially saving taxpayers millions of dollars.
CVS disagreed, prompting the General Assembly to approve a law in the last session clarifying the requirement. CVS responded by threatening to end its Health Savings Pass program in Connecticut.
"I urge you in the strongest terms to reconsider this course of action. Many Connecticut residents continue to deal with the dual stresses of economic hardship and inadequate prescription drug coverage," said Blumenthal in his letter to Ryan. "CVS Caremark's intention to abruptly cancel a popular program that has assisted families in defraying the costs of medications is indeed alarming and raises significant legal questions."
He pointed out that CVS Caremark "has an obligation to charge the state of Connecticut the same discounted price for drugs for Connecticut Medicaid recipients that CVS Caremark charges to customers enrolled in the Health Savings Pass pharmacy discount program."
Blumenthal is also investigating whether the proposed cancellation would violate the contractual rights and other legal protections of consumers who paid to enroll in the Health Savings Pass program.
The AG's subpoena demanded CVS provide:
• any and all documents backing up its statement that extending Health Savings Pass discounts to the state Medicaid program makes the plan "economically unfeasible" in Connecticut, as well as all materials regarding its economic feasibility in other states;
• a list of drugs covered by the program, prices charged enrollees compared with those billed Connecticut's Medicaid program and the actual cost of those medications to CVS;
• the number of Connecticut consumers enrolled in the Health Savings Pass program and the states where it is offered; and
• consumer contracts, marketing materials and all other documents relating to the program.
