Antitrust Law Daily Wrap Up, ANTITRUST NEWS: House Judiciary Committee launches probe into CVS Caremark for potential antitrust violations, (Dec 17, 2024)

By Brian Craig, J.D.

Republican lawmakers request CVS Caremark to produce documents and information related to independent pharmacies.

Members of the House Judiciary Committee have launched an investigation of CVS Caremark over potential antitrust violations by requesting documents and information related to CVS Caremark’s practices that limit the ability of patients to access services through some independent pharmacies. In a letter to CVS Health President and CEO David Joyner, Republican lawmakers Jim Jordan (R-Ohio) and Rep. Thomas Massie (R-Ky.) contend that large pharmacy benefit managers (PBMs) such as CVS Caremark “can influence independent pharmacies because losing ‘in-network’ status with one of the large PBMs can mean that an independent pharmacy can no longer afford to serve the community that relies on its services.”

Market share among PBMs. House Judiciary Committee Chairman Jordan and Massie, chairman of the House Subcommittee on the Administrative State, Regulatory Reform and Antitrust have raised potential anticompetitive conduct by CVS Caremark and other PBMs. Three PBMs reportedly control nearly 80 percent of the market for pharmacy benefit management services, with CVS Caremark alone controlling over 30 percent of the pharmacy benefit management services for Medicaid and Medicare. With this market power, PBMs like CVS Caremark can influence independent pharmacies because losing “in-network” status with one of the large PBMs can mean that an independent pharmacy can no longer afford to serve the community that relies on its services.

The letter written by Jordan and Massie pointed out that innovative companies have recently created technology capable of helping doctors, pharmacies, and patients manage care and lower prescription drug costs for consumers. Digital pharmacy services including pharmaceutical hub services, prescription workflow services, patient management services, independent patient access solutions, or other patient solutions can all help patients save money.

Jordan and Massie noted that during a House Subcommittee hearing in September 2024, witnesses were asked if a large PBM could stifle independent pharmacies if they worked with companies that bypass the PBM network. The congressmen said PBMs “likely do have the power to stifle innovation in that way, and in particular, one witness replied that this type of conduct 'probably happens.'” If CVS Caremark is eliminating opportunities for patients to access such services through an independent pharmacist, Jordan and Massie contend that this practice raises significant concerns for patient welfare and innovation across the nation creating potential antitrust concerns.

Documents requested. In the letter to the CEO of CVS Caremark, the Republican lawmakers requested the following documents and information for the period January 1, 2019, to the present:

1. All documents and communications sent by CVS Caremark to an independent or specialty pharmacy requesting or requiring the pharmacy to cease certain practices with regards to pharmaceutical hubs;

2. All documents and communications between CVS Caremark and an independent or specialty pharmacy referring or relating to an independent pharmacy’s interactions with pharmaceutical hubs; and

3. All documents and communications referring or relating to CVS Caremark’s policies or guidance, formal or informal, against independent pharmacies working with pharmaceutical hubs.

The lawmakers requested that CVS Caremark turn over the documents and information no later than December 30, 2024.

Companies: CVS Caremark

News: Antitrust