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Pennsylvania Attorney General Corbett Announces Multi-State Settlement With Caremark
Date:2/14/2008

HARRISBURG, Pa., Feb. 14 /PRNewswire-USNewswire/ -- One of the nation's largest pharmacy benefits management companies (PBMs) has reached a settlement with Attorneys General from 29 states resolving claims of deceptive business practices.

Attorney General Tom Corbett said that the agreement was reached with Caremark Rx, L.L.C. and two of its subsidiaries: Caremark, L.L.C. and CaremarkPCS, L.L.C., formerly Advance PCS.

As part of the settlement, Caremark is required to significantly change its business practices and pay $38.5 million to the states and up to $2.5 million in reimbursement to patients who incurred expenses related to certain switches between cholesterol-controlling drugs.

Corbett said that $22 million of the amount paid to the states must be used to benefit low-income, disabled or elderly consumers of prescription medications, to promote lower drug costs for state residents, to educate consumers concerning the cost differences among medications, or for similar purposes. Pennsylvania will receive $1.2 million for this purpose.

Caremark will also pay $16.5 million to the states in costs.

In the complaint, the states allege that Caremark engaged in deceptive business practices by encouraging doctors to switch patients to different brand name prescription drugs. Caremark also allegedly represented that the patients and/or health plans would save money. Doctors were not adequately informed of the effect this type of switch would have on patients' costs.

Corbett said that Caremark did not clearly disclose to their clients' plans that rebates accrued from the drug switching process would be retained by Caremark and not passed directly to the client plan.

"Caremark was operating against their clients' interests by retaining rebates and discounts that they were obligated to pass onto their clients," Corbett said. "This agreement stops the deceptive business practices and takes the necessary st
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SOURCE Pennsylvania Office of Attorney General
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