CVS Health Corp. is offering a prescription-drug plan
that charges patients more if they buy their medications at pharmacies that
sell tobacco products, a plan that could benefit the company’s own network of
drugstores. The plan, offered by CVS’s pharmacy benefits unit Caremark,
features copayments that are up to $15 higher on prescriptions filled
where tobacco is sold. That could give people covered by such plans an
incentive to buy their medications at CVS, which stopped selling tobacco
products last month.
Rival drugstore chains like Walgreen Co. and Rite-Aid Corp.
have resisted calls to stop selling tobacco themselves, saying it wouldn’t have
a significant impact on smoking rates.
CVS spokeswoman Carolyn Castel said the company created the
plan after being approached by Caremark clients interested in creating a
tobacco-free pharmacy network. People covered by the new plan would be able to
buy medications at the lower copays at Target Corp., which doesn’t sell
tobacco, as well as tobacco-free local or regional drugstores.
Still, the company is opening itself up to criticism that it
is designing coverage plans that give an advantage to its own pharmacies. David
Balto, a former policy director at the U.S. Federal Trade Commission who is now
an antitrust attorney, said the tobacco-free network could be problematic if it
effectively steers patients to CVS.
CVS’s tobacco-free network is only in the early stages. The
first employer to sign on is the city of Philadelphia, where around 5,400
nonunion employees will have to make an additional $15 copayment if they fill
their prescriptions at pharmacies that aren’t part of what is called a
preferred health network.
About 100 independent pharmacies and between 150 and 200 CVS
stores will participate in the Philadelphia network. Some independent
pharmacies are crying foul. The company says it will provide lists of
qualifying pharmacies.
CVS has come under fire in the past for practices that
steered its pharmacy-benefits clients to its pharmacies. CVS’s $27 billion
acquisition of Caremark in 2007 faced scrutiny from the Federal Trade
Commission over just such an issue, and a subsequent investigation was launched
in 2009 as well. The FTC concluded its review in 2012 without taking any action
on whether CVS was being anti-competitive.
That inquiry probed CVS’s “Managed Choice,” program which
gives patients a discount when they fill their 90-day prescription though CVS’s
mail-order program or pick them up at a CVS pharmacy. Such narrow-networks
aren’t uncommon as employers negotiate ways to save money on health-care costs.
CVS has been under pressure to show that its decision to
purge tobacco products from its stores is more than just cosmetic. The company
has said the decision cost it $2 billion in revenue as it repositions itself as
a health-care service provider.
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