Woonsocket, R.I. CVS Caremark has agreed to a settlement in relation to a multi-state consumer protection investigation of its pharmacy benefits manager AdvancePCS that began in 2004. The investigation alleged that Caremark urged doctors to switch patient medications in order to save money, but did not let doctors know Caremark would keep the savings, and patients and their health plans might pay more.
CVS Caremark said that its AdvancePCS (now known as CaremarkPCS) and Caremark subsidiaries have entered into a settlement agreement and consent order with 28 states and the District of Columbia. In entering the settlement, they have expressly denied any and all allegations, and there has been no finding of wrongdoing or inappropriate business conduct on their part.
The company has agreed to pay $12 million in settlement on behalf of legacy AdvancePCS, $10 million in settlement on behalf of legacy Caremark, $16.5 million in state investigative costs and up to $2.5 million as reimbursement for certain medical tests.
The mutually agreed consent order requires AdvancePCS and Caremark to maintain certain PBM business practices and will not result in significant changes to current business practices.