For Immediate Release
Transparency Fight Over CVS Caremark Contracting Practices Escalates With Lawsuit for Release of Univ. Drug Benefit Contract
Change to Win, Public Citizen Seek Records From Michigan School to Shine Light On Prescription Drug Costs, Increase Transparency in Government Spending
WASHINGTON - Change to Win today sued Ferris State University, seeking the
release of a government contract between the university and CVS
Caremark, a pharmacy benefit management (PBM) company, among other
documents. Change to Win is represented by Margaret Kwoka, an attorney
at Public Citizen, a nonprofit organization with a history of fighting
for government transparency, and by attorney Ted Iorio of the Michigan
firm Kalniz, Iorio & Feldstein. The case was brought under the
Michigan Freedom of Information Act (FOIA) in Mecosta County Circuit
"CVS Caremark's lack of transparency is driving up prescription
drug costs for consumers and health plans alike," said Chris Chafe,
executive director of Change to Win. "Michigan law protects the
people's right to know, in this case, what CVS Caremark is charging the
university for prescription drug benefits, but also what compensation
CVS Caremark may be receiving in the form of undisclosed agreements
with drug manufacturers and pharmacies at taxpayers' expense."
Change to Win filed the suit after Ferris State University, a public
college based in Big Rapids, Mich., partially denied a request for a
copy of the CVS Caremark contract. The school released part of the
contract but refused to release key portions such as pricing
information. Public Citizen and Change to Win assert that the redacted
information, such as prices, should also be disclosed. Change to Win is
engaged in an effort to increase the public accountability and
transparency of drug middlemen, such as CVS Caremark, to allow for
public scrutiny of drug benefits and drug pricing practices.
CVS Caremark Resists Transparency
CVS Caremark is enormously resistant to transparency. The company
has taken extraordinary measures to prevent greater disclosure of its
practices, including allegedly interfering with audits by its clients,
opting out of contract opportunities to avoid greater disclosure and
vigorously opposing legislative and other measures to increase
transparency in the PBM industry. Last year, CVS Caremark sued the
Texas Attorney General to prevent disclosure of a public contract in
Texas but dropped its suit on the day of trial last September. The
contract has since been made public. A recent study by the Texas State
Auditor's Office found that CVS Caremark's prices were significantly
higher than some competing PBMs, and called on Texas agencies to
educate themselves about PBM contracting practices before entering into
drug benefit contracts.
"Ferris State University is unlawfully withholding information about
its contract with CVS Caremark," said Kwoka. "Under Michigan law, the
full contract, including the prices, should have been released to our
client. Michigan FOIA law does not allow the university to withhold
information such as prices that are a necessary part of the terms of a
government contract. This suit will ensure that Michigan FOIA laws
serve the purposes they were meant to, permitting public scrutiny of
government practices such as contracting."
Right to Know in Michigan
Under well-established Michigan law, the people have a right to know
how government spends tax dollars through government contracts. The
Michigan FOIA provides that information submitted to gain a government
contract or other governmental benefit must be released upon public
request. The law reflects the public interest in the public
availability of basic information that allows for citizen debate and
oversight regarding the expenditure of government funds.
CVS Caremark is the country's second-largest PBM and has contracts
with many state entities across the country, including several in
Michigan. In 2005, the University of Michigan stopped contracting with
Caremark, citing concerns that its pricing practices were not
transparent. Many PBM contracts with government agencies, including
several Caremark contracts, have been made public in Michigan and other
states under Freedom of Information laws.
Public Citizen is representing Change to Win as part of its Public Interest FOIA Clinic,
which was launched last year and is designed to give comprehensive
assistance to other nonprofit organizations seeking government-held
information. Through the clinic, Public Citizen provides direct FOIA
litigation assistance to public interest organizations. Public Citizen
lawyers also collect and analyze information about recent FOIA
litigation conducted by public interest organizations to identify and
address common FOIA problems.
To read the lawsuit, go to: http://www.citizen.org/documents/ferrisstatefoiacomplaint.pdf
Alarmed About CVS Caremark is a Change to Win initiative to
educate health plan managers and trustees as well as consumers about
the newly merged CVS Caremark, now the country's second largest
pharmacy benefits manager (PBM) and largest retail pharmacy chain.
Change to Win represents workers in CVS Caremark plans that cover more
than 10 million people. On behalf of these health plan members, the
initiative seeks reform of the PBM industry to protect plan members'
health and privacy.
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Public Citizen is a national, nonprofit consumer advocacy organization founded in 1971 to represent consumer interests in Congress, the executive branch and the courts.