But two weeks ago, many of the loyal customers began receiving letters from CVS Caremark, one of the nation’s largest pharmacy benefit managers, informing them that they would no longer be able to fill prescriptions at Cathedral Pharmacy. The letters directed them to nearby pharmacies, including CVS stores.
Cathedral’s owner of 38 years, Michael Madden, said the business won’t survive without CVS Caremark, which manages prescriptions for many major employers, including the federal government. Madden, 62, said a quarter of his customers are on the prescription program.
CVS Caremark said it is terminating Cathedral’s contract Friday because a recent audit found that the pharmacy was not complying with the terms of their agreement. Madden said an error led to the audit’s findings, but he said it was an honest — and ultimately harmless — mistake. He said CVS Caremark is canceling his contract because the company, which also operates a giant retail pharmacy chain, is trying to drive him out of business.
“It’s the death knell,” said Madden, who sought an injunction against CVS on Tuesday in D.C. Superior Court. “My customers are so hurt — it’s a crime what [CVS is] doing to them, as well as to us.”
In a statement, CVS Caremark Corp. said the company provided Cathedral with “every opportunity” to challenge the findings but that the pharmacy didn’t produce additional information to resolve the problem. CVS Caremark said that it cancels less than 1 percent of the contracts in its network in a year and that terminations are based on concerns over fraud or patient safety, not business interests.
Antitrust complaints
Since CVS and Caremark merged in 2007, consumer advocates and independent pharmacists have raised concerns that CVS could have access to sensitive information from rival pharmacies. The pharmacy benefit management part of CVS Caremark’s business, which processes and pays prescription drug claims, involves collecting customers’ personal data, as well as the drugs prescribed and the pricing.
The company said information obtained through its pharmacy benefit management services is not shared with its retail operations.
But the National Community Pharmacists Association said it has identified examples of CVS Caremark pushing patients toward its retail and mail-order pharmacies by using information from its pharmacy benefit manager.
The association also said CVS Caremark has used audits — conducted regularly to make sure claims and reimbursements are filed accurately — to bully competing pharmacies. CVS denies the association’s claim.
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