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Congressman blasts CVS Health, Aetna merger, asks for deeper investigation

Arkansas Rep. Rick Crawford alleged CVS business practices created an emergency situation in his home state, calls for more scrutiny in merger deal.

Beth Jones Sanborn, Managing Editor

Congressman Rick CrawfordCongressman Rick Crawford

Arkansas Congressman Rick Crawford is asking Attorney General Jeff Sessions to dig deeper into the proposed CVS Health/Aetna merger, which recently gained stockholder approval from both companies.

Crawford penned a letter to AG Sessions earlier this month saying the proposed merger "could potentially destroy competition in the healthcare industry and would encourage further consolidation, imperiling consumer choice and increasing costs for prescription medications."

Crawford argued that CVS is already the pharmacy benefits manager for Aetna and the relationship has already caused issues with independent stakeholders who have allegedly struggled to access preferred networks under Aetna's Part D plans. He also pointed to past sanctions against Aetna from 2010 and 2015 for mistakenly reporting that 6,887 retail pharmacies were designated "retail in-network," which affected seniors who were picking Part D plans. He said seniors, as a result, were forced to pay cash up front for their prescriptions and then seek repayment from Aetna, or be left without their medicines entirely.

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Crawford also wrote that CVS Caremark has wreaked havoc in his own state by "severely undercutting reimbursements to pharmacists." He cited data from the Arkansas Pharmacists Association involving small chain and community pharmacies from 2017 that he said showed CVS Caremark and another PBM paid community pharmacists between negative $2 and negative $4 per prescription. He also alleged that under the Arkansas Works program, which provides health coverage to low-income residents and certain legal immigrants, CVS Caremark and an insurance provider slashed reimbursements to the pharmacies after contracts were already signed and in place by "negatively manipulating maximum allowable cost prices."

Crawford said the APA testified before the state legislature that a CVS Caremark representative stated the company had purposefully instated reimbursements on generic drugs for community pharmacies in such a way that they would lose money on some drugs. After patients were turned away from pharmacies who refused to fill their prescriptions due to below-cost reimbursement rates under Arkansas Works, Crawford wrote that they found that CVS Caremark and another PBM had "implemented spreads to pay pharmacies a low amount and charge and charge the insurance companies a much higher amount. Since PBMs' contracts are not transparent, it is unknown who is pocketing the profits."

Crawford argued that those actions have spawned an "emergency situation" for both the state legislature and community pharmacies that has jeopardized healthcare and small businesses, and the merger could have dire implications for healthcare delivery in rural areas and marketplace competition in community pharmacies.

"Prescription drug costs are a perpetual challenge for rural Americans, and a merger between CVS Caremark and Aetna deserves a thorough and deliberate review by your agencies," Crawford wrote.

A CVS health spokesperson commented "We are progressing as planned and continue to expect that the transaction will close in the second half of 2018."

Twitter: @BethJSanborn
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