HealthLawProf Blog

Editor: Katharine Van Tassel
Concordia University School of Law

Friday, June 11, 2010

A Pharmacy Feud Erupts Disrupting Consumer Choice

Two of the nation’s biggest drugstore chains, Walgreen and CVS Caremark, have begun a duel that may affect where millions of consumers can fill their prescriptions. According to The New York Times:

On Monday, Walgreen, which operates about 7,500 drugstores across the country, announced it would not participate as a prescription drug provider for customers in new drug benefit plans administered by CVS Caremark. CVS Caremark, besides operating more than 7,000 of its own drugstores, is also a leading provider of prescription drug benefit plans that many employers offer workers and their dependents. On Wednesday, CVS Caremark countered the Walgreen move. The company said that anyone now enrolled in its drug benefit plans would have to stop filling their prescriptions at Walgreen within a month.

Smaller drugstore operators had already raised antitrust concerns against CVS Caremark, citing potential conflicts caused by its dual role as a pharmacy chain and a drug plan administrator. Independent pharmacists argue CVS Caremark has limited consumers’ choices of where to refill their prescriptions.

“When a patient does not have the right to choose the health care provider, in this case the pharmacy that they choose and trust, that’s not good,” said Joseph H. Harmison, the president of the National Community Pharmacists Association, a group representing nearly 23,000 independent community pharmacies and pharmacy chains. “Some people who feel intimidated by physicians turn to their local pharmacists for medical advice about their prescriptions, he said. “The pharmacist is often the person a patient will wait to ask the questions to,” he said.

Last May, his association filed a complaint with the Federal Trade Commission alleging that CVS Caremark had used its dominant position in the pharmaceutical service industry to eliminate consumer choice and drive consumers away from competing pharmacies. The F.T.C. confirmed Wednesday that it was investigating CVS Caremark, but Richard A. Feinstein, the director of the agency’s bureau of competition said the commission would not comment on the subject of the probe. Attorneys general in 24 states are conducting a similar investigation, according to CVS Caremark.

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