CVS Caremark Violates HIPAA, TX Pharmacies Allege

John Commins, October 8, 2010

Six independent pharmacies in Texas have filed a federal law suit against CVS Caremark charging the drug retail giant and pharmacy benefits manager with violations of the Racketeer Influenced and Corrupt Organizations Act and trade secret misappropriation.

The complaint also alleges that CVS Caremark contracts requiring patients to buy maintenance medications only from CVS Caremark violate Texas' "Any Willing Provider" law.

"CVS Caremark traps patients and non-CVS retail pharmacies in a scheme to deny patient choice of pharmacy and to smother business competition," said Amanda Gohlke Fields, general counsel for plaintiffs American Pharmacies, a for-profit, member-owned pharmacy wholesale buying group.

CVS Caremark corporate spokeswoman Christine K. Cramer said the company is reviewing the suit. "CVS Caremark is confident that its business practices and service offerings, which are designed to reduce healthcare costs and expand consumer choice, are being conducted in compliance with applicable antitrust, privacy and other laws," Cramer said.

The suit claims CVS Caremark violates the firewall between the retail pharmacy and the pharmacy benefits manager divisions as required when the Federal Trade Commission approved the CVS and Caremark 2007 merger. Instead, the combined company built an information technology platform that straddles all of CVS Caremark's business segments, capturing in-depth patient data for marketing and other purposes in violation of HIPAA patient privacy laws, the suit alleges.


John Commins

John Commins is a senior editor at HealthLeaders Media.

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