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Commerce fines CVS Caremark $500,000 after 2022 case alleging violations of Pharmacy Benefit Manager Act

5/1/2023 8:59:22 AM

The Minnesota Department of Commerce today announced it has levied a $500,000 penalty against Caremark after alleging that Caremark violated state law prohibiting the steering of patients to pharmacies or mail-order prescription services in which Caremark had an ownership interest. Under that practice, some Caremark enrollees complained of being forced to drive up to 130 miles to fill prescriptions.   

As a pharmacy benefit manager, Caremark is hired by health insurers and employers to manage prescription drug benefits for enrollees. In an April 2022 order, Commerce argued that by requiring Minnesotans to use pharmacies owned by CVS Health, Caremark had violated the Pharmacy Benefit Manager Act. Oklahoma’s insurance commissioner last month filed a similar complaint against Caremark, saying the company had continued steering patients to CVS-owned pharmacies even after a previous state order. 

Minnesota’s Pharmacy Benefit Manager Act prohibits a PBM from requiring or incentivizing a member to use a pharmacy it owns unless the same incentives are available at other pharmacies. In accordance with Minnesota law and the department’s consent order, Caremark must open its Maintenance Choice program and any similar programs to any pharmacy that wants to enroll and accepts the network’s standard terms and pricing.  The consent order applies to all health plans enrolled in the Maintenance Choice or similar programs, including employer-sponsored plans regulated by the federal government.  

Caremark’s Maintenance Choice program is intended for patients with diabetes, high blood pressure, Alzheimer’s disease, and other conditions requiring “maintenance” prescriptions. As of 2021, about 72,000 Minnesotans were enrolled in Maintenance Choice. After filling their first three prescriptions, patients were required to use a CVS retail or mail-order pharmacy rather than their preferred in-network pharmacy. 

“Commerce filed the complaint against Caremark because we recognize the critically important role that pharmacies play in ensuring Minnesota families have access to the health care they need,” Commissioner Grace Arnold said. “Forcing a family to drive more than 100 miles or use a mail-order service to refill an insulin prescription or to get medicine for high blood pressure is a clear example of a corporation placing profits before people. This Order is an important win for Minnesota and demonstrates Commerce’s commitment to protecting consumers and holding companies accountable.” 

The Minnesota Attorney General’s Office represented Commerce in its case against Caremark. “No one should have to choose between affording their lives and affording to live, but the cost of prescription drugs is so high that too many Minnesotans face that terrible choice. And one of the top drivers of drug prices is pharmacy benefit managers,” Attorney General Keith Ellison said. “I’m proud my office represented the Department of Commerce in holding CVS Caremark accountable under Minnesota law regulating PBMs, and I’m proud we’ve reached a settlement that will make drugs more accessible for Minnesotans, especially those in Greater Minnesota. We will continue to work closely with the Department of Commerce to make sure CVS Caremark and all PBMs abide by Minnesota law and will hold them accountable when they don’t.” 

The Attorney General’s Office released a report in 2020 on ways to lower pharmaceutical drug prices. Included was a recommendation to robustly regulate PBMs and their business practices. Commerce’s website has more about state regulation of the 49 PBMs licensed in Minnesota. 

Get updates and news from the Minnesota Department of Commerce by following Commerce at mn.gov/commerce or @MNCommerce on social media. 


MEDIA CONTACTS: 

Mo Schriner, Communications Director
Minnesota Department of Commerce
mo.schriner@state.mn.us

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