Retail News Breaks Archives
CVS Caremark: FTC probe now closed
January 12th, 2012
WOONSOCKET, R.I. – CVS Caremark Corp. said it has settled a Federal Trade Commission investigation involving the Rx America subsidiary of Longs Drug Stores Corp., which CVS acquired over three years ago.
In the probe, the FTC examined certain business practices of Rx America that occurred before the Longs acquisition in October 2008, CVS Caremark said Thursday.
The company has agreed to pay a settlement but noted that there were no allegations of antitrust law violations or anticompetitive behavior related to CVS Caremark's business practices, products or services and that it has received a formal letter from the FTC closing all other aspects of the investigation.
CVS Caremark said it has entered into a consent order in which it will deposit $5 million into a fund for compensating consumers who bought coverage for the 2008 plan year from a Medicare Part D prescription drug plan sponsored by Rx America.
The fund is being set up because Rx America inadvertently posted inaccurate pricing information for certain generic drugs on a website maintained by the Centers for Medicare & Medicaid Services (CMS), according to CVS Caremark. The company added that, going forward, it has agreed to refrain from making any misrepresentations regarding drug pricing information relating to affiliate-sponsored Medicare Part D plans.
"CVS Caremark is pleased to have reached an agreement with the FTC that ends the investigation and enables us to continue our focus on offering unique, innovative products and services that differentiate us and benefit consumers," Larry Merlo, president and chief executive officer of CVS Caremark, said in a statement. "We remain committed to delivering the best possible pharmacy care by driving down health care costs, expanding consumer access and improving health care outcomes.
The consent order will be published in the Federal Register and is subject to comment for 30 days.
"During the course of this two-year investigation, our company cooperated fully with the FTC and provided to the government millions of documents as well as access to numerous members of our management team who participated in voluntary interviews and depositions," stated Douglas Sgarro, executive vice president and chief legal officer of CVS Caremark. "It is important to note that, at the conclusion of this comprehensive investigation, the FTC made no allegations of antitrust law violations or anticompetitive behavior associated with any of our business practices, products or service offerings."