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[click here]Texas Counties Partnering With Caremark: Pharmacy Benefit Manager Sued for Fraud
Thinking they were offering a benefit to uninsured residents, numerous Texas counties have endorsed pharmacy benefit manager Caremark Rx to provide pharmacy discount cards. However, the corporation is being sued by Texas Attorney General Greg Abbott and 17 other states for fraud, as well as U.S. Department of Justice.
A pharmacy benefit manager, commonly known as a PBM, is a company under contract with health insurers, self-insured companies and government programs to control patient access to medicine with goal of saving money. The reality is that PBMs are extraordinarily profitable businesses standing between patients and their physicians, according to American Pharmacies, (APRx), a group of independent pharmacists mainly in Texas but also in Louisiana and Oklahoma.
Counties participating with Caremark include Bandera, Bastrop, Collin, Comal, Guadalupe, Houston, Jackson, Kaufman, Lavaca, Leon, Lipscomb, Marion, San Augustine, San Jacinto, Stephens, Tarrant, Victoria and Yoakum.
The suit on file in a San Antonio federal court alleges that Caremark, Inc. engaged in an unlawful scheme over many years to avoid reimbursing Medicaid for payments of prescription drugs for individuals who had dual insurance coverage—both by Caremark and by Medicaid. The suit says Caremark should have paid for the prescriptions first, with government-funded insurance the payer of last resort. The AG’s office filed amended objections and responses Oct. 11 to Caremark’s first set of interrogatories. The case follows revelations from a whistleblower in Caremark’s San Antonio claims office.
Other lawsuits against the nation’s largest PBM claim Caremark:
- restocked leftover prescription drugs and resold them to customers;
- illegally told consumers they had to use Caremark’s mail order pharmacy rather than local pharmacies; sent a 30-day supply when the intent of the physician and consumer, as well as representations from the company that mail-order would provide 90-day supplies for the same cost as 30-day supply;
- did not disclose the kickbacks received from pharmaceutical manufacturers, thus overcharging health plans; and
- Intentionally concealed revenue in order to avoid paying certain commissions owed to consultants who marketed and sold its services.
In a previous lawsuit, Caremark agreed to pay the federal government $137.5 million in 2005 to settle lawsuits that accused a Caremark subsidiary of taking kickbacks from drug manufacturers in exchange for favorable placement in government drug programs.
“Settlements to avoid being found guilty are all too prevalent among PBMs,” said APRx Vice President Richard Beck, R.Ph. APRx is part of a coalition of Texas pharmacy groups working to “shine the light on PBM practices that will be shocking to many people who thought they were doing right by their employees and constituents.
“Most people, including benefits managers, don’t realize how PBMs really work,” Beck said. “We are participating in a joint interim hearing Tuesday (Oct. 17) with the Senate Health and Human Services Committee and the Senate State Affairs Committee. Our experts will disclose questionable PBM practices that waste both tax dollars and health insurance funds.”
American Pharmacies is a for-profit, member-owned pharmacy buying cooperative operating in Texas, Oklahoma and Louisiana.
Note to editors: The hearing is scheduled for 9 a.m. Tuesday, Oct. 17 in the Senate Chamber.