[Federal Register Volume 77, Number 12 (Thursday, January 19, 2012)]
[Notices]
[Pages 2724-2726]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2012-876]
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FEDERAL TRADE COMMISSION
[File No. 112 3210]
CVS Caremark Corporation; Analysis of Proposed Consent Order To
Aid Public Comment
AGENCY: Federal Trade Commission.
ACTION: Proposed consent agreement.
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SUMMARY: The consent agreement in this matter settles alleged
violations of Federal law prohibiting unfair or deceptive acts or
practices or unfair methods of competition. The attached Analysis to
Aid Public Comment describes both the allegations in the draft
complaint and the terms of the consent order--embodied in the consent
agreement--that would settle these allegations.
DATES: Comments must be received on or before February 13, 2012.
ADDRESSES: Interested parties may file a comment online or on paper, by
following the instructions in the Request for Comment part of the
SUPPLEMENTARY INFORMATION section below. Write ``CVS Caremark, File No.
112 3210'' on your comment, and file your comment online at https://ftcpublic.commentworks.com/ftc/cvscaremarkcorpconsent, by following the
instructions on the Web-based form. If you prefer to file your comment
on paper, mail or deliver your comment to the following address:
Federal Trade Commission, Office of the Secretary, Room H-113 (Annex
D), 600 Pennsylvania Avenue NW., Washington, DC 20580.
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FOR FURTHER INFORMATION CONTACT: Lisa Weintraub Schifferle (202) 326-
3377) or Meredyth Smith Andrus (202) 326-2863), Federal Trade
Commission, 600 Pennsylvania Avenue NW., Washington, DC 20580.
SUPPLEMENTARY INFORMATION: Pursuant to section 6(f) of the Federal
Trade Commission Act, 38 Stat. 721, 15 U.S.C. 46(f), and Sec. 2.34 the
Commission Rules of Practice, 16 CFR 2.34, notice is hereby given that
the above-captioned consent agreement containing a consent order to
cease and desist, having been filed with and accepted, subject to final
approval, by the Commission, has been placed on the public record for a
period of thirty (30) days. The following Analysis to Aid Public
Comment describes the terms of the consent agreement, and the
allegations in the complaint. An electronic copy of the full text of
the consent agreement package can be obtained from the FTC Home Page
(for January 12, 2012), on the World Wide Web, at http://www.ftc.gov/os/actions.shtm. A paper copy can be obtained from the FTC Public
Reference Room, Room 130-H, 600 Pennsylvania Avenue NW., Washington, DC
20580, either in person or by calling (202) 326-2222.
You can file a comment online or on paper. For the Commission to
consider your comment, we must receive it on or before February 6,
2012. Write ``CVS Caremark, File No. 112 3210'' on your comment. Your
comment--including your name and your state--will be placed on the
public record of this proceeding, including, to the extent practicable,
on the public Commission Web site, at http://www.ftc.gov/os/publiccomments.shtm. As a matter of discretion, the Commission tries to
remove individuals' home contact information from comments before
placing them on the Commission Web site.
Because your comment will be made public, you are solely
responsible for making sure that your comment does not include any
sensitive personal information, like anyone's Social Security number,
date of birth, driver's license number or other state identification
number or foreign country equivalent, passport number, financial
account number, or credit or debit card number. You are also solely
responsible for making sure that your comment does not include any
sensitive health information, like medical records or other
individually identifiable health information. In addition, do not
include any ``[t]rade secret or any commercial or financial information
which is obtained from any person and which is privileged or
confidential,'' as provided in Section 6(f) of the FTC Act, 15 U.S.C.
46(f), and FTC Rule 4.10(a)(2), 16 CFR 4.10(a)(2). In particular, do
not include competitively sensitive information such as costs, sales
statistics, inventories, formulas, patterns, devices, manufacturing
processes, or customer names.
If you want the Commission to give your comment confidential
treatment, you must file it in paper form, with a request for
confidential treatment, and you have to follow the procedure explained
in FTC Rule 4.9(c), 16 CFR 4.9(c).\1\ Your comment will be kept
confidential only if the FTC General Counsel, in his or her sole
discretion, grants your request in accordance with the law and the
public interest.
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\1\ In particular, the written request for confidential
treatment that accompanies the comment must include the factual and
legal basis for the request, and must identify the specific portions
of the comment to be withheld from the public record. See FTC Rule
4.9(c), 16 CFR 4.9(c).
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Postal mail addressed to the Commission is subject to delay due to
heightened security screening. As a result, we encourage you to submit
your comments online. To make sure that the Commission considers your
online comment, you must file it at https://ftcpublic.commentworks.com/ftc/cvscaremarkcorpconsent by following the instructions on the Web-
based form. If this Notice appears at http://www.regulations.gov/#!home, you also may file a comment through that Web site.
If you file your comment on paper, write ``CVS Caremark, File No.
112 3210'' on your comment and on the envelope, and mail or deliver it
to the following address: Federal Trade Commission, Office of the
Secretary, Room H-113 (Annex D), 600 Pennsylvania Avenue NW.,
Washington, DC 20580. If possible, submit your paper comment to the
Commission by courier or overnight service.
Visit the Commission Web site at http://www.ftc.gov to read this
Notice and the news release describing it. The FTC Act and other laws
that the Commission administers permit the collection of public
comments to consider and use in this proceeding as appropriate. The
Commission will consider all timely and responsive public comments that
it receives on or before February 13, 2012. You can find more
information, including routine uses permitted by the Privacy Act, in
the Commission's privacy policy, at http://www.ftc.gov/ftc/privacy.htm.
Analysis of Agreement Containing Consent Order To Aid Public Comment
The Federal Trade Commission has accepted, subject to final
approval, a consent agreement from CVS Caremark Corporation (``CVSC'').
The proposed consent order has been placed on the public record for
thirty (30) days for receipt of comments by interested persons.
Comments received during this period will become part of the public
record. After thirty (30) days, the Commission will again review the
agreement and the comments received, and will decide whether it should
withdraw from the agreement and take appropriate action or make final
the agreement's proposed order.
CVSC is a pharmacy services company that, among other things,
markets and sells Medicare drug plans and Medicare Part D drugs. CVSC
currently owns multiple subsidiaries, including RxAmerica, that offer
Medicare Part D prescription drug plans. Medicare Part D is a
prescription drug benefit for consumers with Medicare coverage,
primarily seniors and persons with disabilities. To obtain Part D
benefits, beneficiaries must enroll in a Medicare drug plan
administered by an insurer or other private company approved by the
Centers for Medicare & Medicaid Services (``CMS''). Beneficiaries can
shop for a Medicare drug plan by looking up plan benefits and drug
costs on a provider's Web site, by going onto CMS' Medicare Web site
and using the web-based tool known as Plan Finder, or by visiting other
third-party Web sites where such information is posted. Once enrolled,
beneficiaries generally have cost sharing obligations until the total
cost of their drugs reaches what is known as the coverage gap or
``donut hole,'' at which point the beneficiary pays the full cost of
the drugs.
The Commission's complaint alleges that CVSC, through its
subsidiary RxAmerica, violated Section 5 of the FTC Act by
misrepresenting that the prices of covered Medicare Part D prescription
drugs, as posted on Plan Finder and on the Web sites of RxAmerica and
other third parties from approximately 2007 until the end of 2008, were
accurate estimates of the prices that beneficiaries would pay for those
drugs at CVS and Walgreens. Rather, the prices charged to RxAmerica
beneficiaries who purchased their covered Part D generic drugs from CVS
Pharmacy or Walgreens during the relevant time period were
significantly higher--in some cases as much as ten times higher--than
the prices posted on those Web sites. As a result of this
[[Page 2726]]
pricing discrepancy, many RxAmerica beneficiaries using CVS Pharmacy
and Walgreens stores ran through their benefits coverage at faster
rates than they would have based on the posted prices. Many
beneficiaries, therefore, unexpectedly entered the donut hole and
became responsible for the total cost of their prescription drugs, with
no opportunity to change plans until the next calendar year.
To remedy the violations charged and to prevent CVSC from engaging
in the future in practices similar to those alleged in the complaint,
the proposed order contains injunctive provisions and a consumer
redress program.
Section I of the proposed order prohibits CVSC from misrepresenting
the price or cost of Medicare Part D prescription drugs, or other
prices or costs associated with Medicare Part D prescription drug
plans.
Section II of the proposed order requires CVSC, within five (5)
days of the date the order becomes final, to pay the Commission $5
million for consumer redress and administrative costs. This provision
specifies that the Commission may apply any remaining funds after
redress is completed for such other equitable relief as it determines
to be reasonably related to CVSC's practices alleged in the complaint.
Any remaining funds not used for such equitable relief shall be
deposited into the United States Treasury as disgorgement. Section III
of the proposed consent order requires CVSC to produce certain
information necessary for the Commission to administer consumer
redress.
Sections IV through VIII of the proposed order are reporting and
compliance provisions. Section IV requires CVSC to retain documents
relating to its compliance with the order for a five (5) year period.
Section V requires dissemination of the order now and in the future to
all current and future subsidiaries, current and future principals,
officers, directors, and managers, and to persons with responsibilities
relating to the subject matter of the order. It also requires CVSC to
secure a signed and dated statement acknowledging receipt of the order
from all persons who receive a copy of the order pursuant to Section V.
Section VI ensures notification to the Commission of changes in
corporate status. Section VII mandates that CVSC submit a compliance
report to the Commission within sixty (60) days, and periodically
thereafter as requested. Section VIII is a provision ``sunsetting'' the
order after twenty (20) years, with certain exceptions.
The purpose of this analysis is to facilitate public comment on the
proposed order. It is not intended to constitute an official
interpretation of the complaint or the proposed order, or to modify the
proposed order's terms in any way.
By direction of the Commission.
Donald S. Clark,
Secretary.
[FR Doc. 2012-876 Filed 1-18-12; 8:45 am]
BILLING CODE 6750-01-P