CVS Health Corporation (NYSE:CVS)
Historical Stock Chart
5 Years : From Jul 2012 to Jul 2017
CVS Caremark Corp. (CVS) has agreed to pay $5 million to settle charges that it misrepresented prices of certain Medicare Part D prescription drugs, the Federal Trade Commission announced Thursday.
The agreement comes after the FTC has spent more than two years investigating the company's business practices. In announcing Thursday's settlement, the agency also said it has closed its investigation of CVS.
The FTC alleged from 2007 until at least November 2008, CVS subsidiary Rx America posted incorrect prices for certain Medicare Part D prescription drugs at CVS and Walgreens pharmacies. The actual costs of some drugs were as much as 10 times more than Rx America's posted rates, the commission said.
Because of the deceptive prices, elderly and disabled consumers chose Rx America plans and paid significantly more than they expected for their drugs at CVS and Walgreens, the FTC alleged.
Thursday's settlement requires CVS to pay $5 million in consumer refunds.
CVS did not immediately respond to a request for comment.
CVS's 2007 acquisition of Caremark, which was cleared by the FTC without a lengthy review, allowed the drugstore chain to become a major player in the market for managing pharmacy benefits.
The merger, however, has been a continued source of concern for consumer groups, which have accused the company of using deceptive and anticompetitive practices to drive consumers into CVS stores.
Last year, several consumer groups called on the FTC to require CVS to divest Caremark or impose significant restrictions on how the combined company operates.
Thursday's announcement comes as the FTC continues to give close scrutiny to the proposed merger of two of CVS Caremark's main rivals in the pharmacy benefit management space: Express Scripts Inc. (ESRX) and Medco Health Solutions Inc. (MHS).
-By Brent Kendall, Dow Jones Newswires; 202-862-9222; firstname.lastname@example.org