Critics of CVS Caremark—a company formed through the merger of the nation's second-largest pharmacy and the largest pharmacy-benefits management firm—are lining up in court to say the combined company illegally uses private patient data to target consumers and vanquish competitors.
CVS Caremark misusing data, critics say
Six independent pharmacies in Texas filed a federal lawsuit seeking national class-action status for its claims that CVS Caremark takes patient data collected through its pharmacy-benefits management business and uses it to target direct marketing to consumers and to find independent pharmacies to acquire. The litigants also say the benefits-management side of the company forces beneficiaries to buy many common drugs through CVS.
The Federal Trade Commission, which prohibited some information-sharing when it approved the 2007 merger of CVS and Caremark, announced in 2010 that CVS Caremark has come under investigation. An FTC spokesman Monday confirmed that probe is still active, but declined to elaborate.
CVS said in court records that the allegations against it, including violations of the Racketeering Influenced and Corrupt Organizations Act, should be dismissed because they are subject to mandatory arbitration, as is required under the provider agreements between Caremark and the pharmacies.
In the past week, a dozen pharmacists' interest groups around the country requested permission to file friend-of-the-court briefs arguing against CVS' request for arbitration. Several already have filed their briefs with the U.S. District Court in Southern Texas, including the National Community Pharmacists Association.
"We are confident that our business practices and service offerings, which are designed to reduce health care costs and expand consumer choice, are being conducted in compliance with applicable antitrust, privacy and other laws," a CVS spokesperson said in an e-mail.
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