CVS To Pay $5 Million To Seniors, Disabled Consumers

The FTC says that CVS Caremark Corporation misrepresented the prices of certain Medicare Part D prescription drugs – including drugs used to treat breast cancer symptoms and epilepsy – at CVS and Walgreens pharmacies. That seniors and disabled consumers were hit with higher prescription drug prices. That they were pushed into the "donut hole" – the term that refers to the coverage gap where none of their drug costs are reimbursed – sooner than they anticipated or planned. 

And now, to settle the FTC charges and reimburse affected Medicare Part D consumers for the price discrepancy, CVS has agreed to pay $5 million.
 
"This settlement puts money back in the pockets of older Americans who struggle to pay for their medications," said FTC Chairman Jon Leibowitz. "With the cost of health care on the rise, the FTC is especially focused on protecting consumers from any deceptive claims that would cause them to pay more than they should."
 
According to the FTC complaint, CVS offers Medicare Part D prescription drug plans through subsidiaries like RxAmerica, which CVS acquired in October 2008. Many consumers choose their Medicare Part D drug plans by looking up plan benefits and drug prices on RxAmerica's website, by going to the Centers for Medicare & Medicaid Services website and using the web-based tool Plan Finder, or by visiting other third-party websites where such information is posted.
 
The FTC charged that from 2007 through at least November 2008, RxAmerica posted on its website and supplied for posting to Plan Finder and third-party websites incorrect prices for Medicare Part D prescription drugs at two pharmacy chains, CVS and Walgreens. In some instances, the actual prices for these drugs were as much as 10 times more than the posted prices, according to the FTC. As a consequence of the deceptive price claims, many elderly and disabled consumers chose RxAmerica plans and paid significantly more than they expected for their drugs at CVS and Walgreens, the FTC alleged.
 
The proposed settlement order bars CVS Caremark from misrepresenting the price or cost of Medicare Part D prescription drugs or other prices or costs associated with Medicare Part D prescription drug plans. It requires that CVS Caremark pay $5 million in consumer refunds. The FTC will be mailing checks to eligible consumers who were harmed by these misrepresentations after the order becomes final. The settlement also contains standard record-keeping provisions to allow the FTC to monitor compliance with its order.