NCPA Responds to Consumer Groups' Request for CVS Caremark Divestiture


Alexandria, Va. - April 15, 2011

The New York Times reports today that the Federal Trade Commission (FTC) has received a letter from the Consumer Federation of America, Community Catalyst, Consumer Union, National Legislative Association on Prescription Drug Prices and U.S. PIRG asking for divestiture of CVS Caremark. In response, National Community Pharmacists Association (NCPA) Executive Vice President and CEO Douglas Hoey, RPh, MBA, issued the following statement:

"When the FTC prepared to approve the CVS Caremark merger, NCPA and others warned that the merger would lead to Caremark sharing non-CVS patient data with CVS in order to increase its market share. Unsurprisingly, after the 2007 merger, evidence mounted of anti-competitive and anti-privacy business practices through programs such as the ironically named 'Maintenance Choice'. In late 2008, NCPA argued that the best recourse was to urge an FTC investigation of CVS Caremark's alleged improprieties, which would hopefully lead to corrective action. Other observers, including Members of Congress from both parties and consumer groups, agreed. The investigation began in the latter part of 2009, but the FTC has yet to weigh in with its findings.

"Now, several national, respected consumer groups are seeking the most comprehensive solution—CVS Caremark's divestiture—to the problems posed by a coordinated effort to steer and sometimes force patients to CVS Caremark's retail or mail order pharmacies. The consumer advocates outline three compelling reasons in their letter and community pharmacists agree with those reasons. First, CVS Caremark's previous commitment to remain agnostic about where prescriptions are filled has not been honored. Second, structural relief is preferable to behavioral relief when dealing with a corporation that is motivated to direct business from competitors into their stores. Third, the proposed efficiencies from the merger do not seem to be realized. If the sole reason for the merger was increasing CVS store sales, that is not a significant benefit that would prevent the Commission from recommending divestiture.

"On behalf of NCPA and the more than 23,000 independent community pharmacies we represent across America, and the millions of patients they serve, we agree that action is needed to ensure a patient choice of pharmacy and that competitors' patient data are not being shared. Lesser solutions will inevitably lead to the FTC being approached once again with evidence of new and creative tactics being undertaken in the future that may not be in the best interest of patients or competition."

The National Community Pharmacists Association (NCPA®) represents the interests of America's community pharmacists, including the owners of more than 23,000 independent community pharmacies, pharmacy franchises, and chains. Together they represent a $93 billion health-care marketplace, have more than 315,000 employees including 62,400 pharmacists, and dispense over 41% of all retail prescriptions. To learn more go to www.ncpanet.org or read NCPA's blog, The Dose, at http://ncpanet.wordpress.com.

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