Last February, CVS Health, now CVS Caremark, announced that it was stopping the sales of cigarettes and other tobacco products; in September, the shelves were cleared. Now comes word that the pharmacy giant plans to punish customers of pharmacies that still carry tobacco products, like Walgreen and Rite Aid.
How is this possible? CVS also owns Caremark, one of the nation’s largest pharmacy benefits managers. Benefits managers are the middle man between insurance companies and pharmacies. PBMs manage prescription drug plans for employers, customers and insurers. They also handle mail order prescriptions for retail pharmacies.
CVS is developing a new tobacco-free pharmacy network that would charge extra co-pay to customers of pharmacies who still sell tobacco. It is reported that the additional charge could be as much as $15 per prescription.
Since CVS and Caremark merged, the company has been the subject of antitrust concerns, though nothing major to this point. However, the point could be made that in this case, CVS is using its ownership of a similar business to put competitors at a disadvantage.
When CVS announced it planned to stop selling tobacco, it said it wanted to focus more on health-related services. Where cigarettes at one time took up all shelf space behind the cash registers, there are now banners promoting a plan to help you stop smoking.
A CVS spokesman says the company developed the new network after several PBMs requested it. The tobacco-free network will be used by only those PBM customers that choose it.
CVS is projected to lose $2 billion in annual revenue after pulling cigarettes from its shelves. This, apparently, is one way the health care company could make up some of the lost revenues. The extra co-pay would not apply to prescriptions filled at non-tobacco selling pharmacies.
Does this sound like fair practice to you?