Monday, October 04, 2010, 10/04/2010 12:19:00 PM

Trade Secrets of Pharmacies Allegedly Misappropriated By CVS Caremark

By Todd

CVS Caremark is reportedly an integrated provider of prescriptions and related health services. They claim on their website that "It won't be long before every one of Caremark's patients can walk into a CVS/pharmacy with the confidence that his/her Pharmacist has a complete overview of his/her individual history." This prediction has got some private pharmacies angry. And they've sued alleging, among other things, that CVS Caremark is misappropriating THEIR trade secrets.


BusinessWire is reporting that this lawsuit alleges CVS Caremark violates the reported "firewall" between the retail pharmacy and the pharmacy benefit manager (PBM) entities as required when the Federal Trade Commission approved the CVS and Caremark 2007 merger. The complaint goes on to allege that the combined company built an information technology platform that straddles all of CVS Caremark’s business segments, capturing in-depth patient data for marketing and other purposes in violation of HIPAA patient privacy laws.


The plaintiffs go on to allege that patients report being forced, via higher copayments and refusal to cover maintenance medications, to leave their pharmacy where the patient and pharmacist have a long-time professional and personal relationship. Other patients report moving to a CVS Caremark network pharmacy out of fear of losing all health insurance coverage.


We haven't read CVS Caremark's side of the story yet but this one will likely turn into a barn-burner. The private pharmacies' complaint sounds like "bet the farm" allegations. We will print and report on CVS Caremark's response and rebuttal when we find it. This case is pending in federal court in Texas.

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