CVS Caremark Corporation will pay $5 million to settle Federal Trade Commission charges that it 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. The allegedly deceptive claims caused many seniors and disabled consumers to pay significantly more for their drugs than they expected and pushed them into the “donut hole“. The donut hole is a term referring to the coverage gap where none of their drug costs are reimbursed – sooner than they anticipated or planned.
The settlement will bar deceptive claims related to Medicare Part D drug prices and require CVS Caremark to pay $5 million to reimburse affected Medicare Part D consumers for the price discrepancy.
Many U.S. consumers choose their Medicare Part D drug plans by looking up plan benefits and drug prices on website of CVS Caremark’s subsidiary, RxAmerica, 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, which post the necessary information.
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. Because 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 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.
The FTC will publish a description of the consent agreement package in the Federal Register shortly. The agreement will be subject to public comment for 30 days, beginning February 12, 2012 through Feb. 13, 2012, after which the Commission will decide whether to make the proposed consent order final.
Score another one for the U.S. consumer!
© Copyright Rachel Agheyisi, Report Content Writer and Regulatory Compliance Digest Blog, 2012
Filed under: Compliance Enforcement Activities, Consumer Protection Alerts, FTC, FTC Enforcement Updates Tagged: | drug prices, Federal Trade Commission, healthcare costs, Medicare Part D, prescription drugs, price gouging
