MCDANIEL JOINS 28 OTHER ATTORNEYS GENERAL IN SETTLING CONSUMER PROTECTION CLAIMS AGAINST CAREMARK

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February 15, 2008

LITTLE ROCK- Today, Attorney General Dustin McDaniel announced that he along with Attorneys General from 28 other states, entered into a settlement of consumer protection claims against Caremark Rx, L.L.C., one of the nation's largest pharmacy benefits management (PBM) companies.
The States allege that Caremark engaged in deceptive business practices by encouraging doctors to switch patients to different brand name prescription drugs and representing that the patients and/or health plans would save money. But doctors were not adequately informed of the effect this switch would have on costs to patients and health plans. Moreover, Caremark did not clearly disclose to their client plans that money earned by Caremark accrued from the drug switching process would be retained by Caremark and not passed directly to the client plan. The complaint further alleges that Caremark restocked and re-shipped previously dispensed drugs that had been returned to Caremark's mail order pharmacies.
As part of the settlement, Caremark is required to significantly change its business practices. In addition, Caremark will 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. Arkansas's share of the settlement is $654,971 .
"This settlement will go a long way in addressing some of the troubling practices that took place in the PBM industry. I am pleased that the work of the Attorneys General has produced this favorable result" said McDaniel.