{"id":13896,"date":"2018-03-08T22:10:21","date_gmt":"2018-03-08T22:10:21","guid":{"rendered":"http:\/\/arknews.org\/?p=13896"},"modified":"2018-03-08T22:10:21","modified_gmt":"2018-03-08T22:10:21","slug":"congressman-asks-regulators-to-slow-cvs-aetna-merger-citing-arkansas-pharmacy-controversy","status":"publish","type":"post","link":"https:\/\/arknews.org\/index.php\/2018\/03\/08\/congressman-asks-regulators-to-slow-cvs-aetna-merger-citing-arkansas-pharmacy-controversy\/","title":{"rendered":"Congressman asks regulators to slow CVS\/Aetna merger, citing Arkansas pharmacy controversy"},"content":{"rendered":"

 <\/p>\n

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U.S. Rep. Rick Crawford (file photo)<\/figcaption><\/figure>\n

 <\/p>\n

On Thursday, U.S. Rep. Rick Crawford (AR-1) sent letters to federal regulators stating his \u201cgrave concern\u201d over the proposed acquisition of Aetna, Inc., one of the nation\u2019s largest insurance companies, by CVS Health, a Rhode Island-based health care conglomerate that has been at the center of a political showdown in Arkansas.<\/span><\/p>\n

The congressman wrote that CVS Caremark \u2014 a subsidiary of CVS Health \u2014 has \u201crun amok in my state by severely undercutting reimbursements to pharmacists.\u201d CVS Caremark is a pharmacy benefits manager, a middleman company that negotiates drug prices with manufacturers on behalf of insurance carriers. PBMs also handle retail pharmacy claims.<\/span><\/p>\n

Independent pharmacies in Arkansas say CVS Caremark, which is the PBM for insurer Arkansas Blue Cross and Blue Shield, recently slashed its payments for Blue Cross patients so deeply that drugstores now lose money when they fill many prescriptions. That has resulted in layoffs and may lead to store closures, according to the Arkansas Pharmacists Association.<\/span><\/p>\n

The state legislature is now considering legislation that would subject PBMs to regulation by the Arkansas Insurance Department. Governor Hutchinson was expected to call a special session to address the issue as early as next week, after the 2018 fiscal session concludes. But Crawford\u2019s letters to U.S. Attorney General Jeff Sessions and <\/span>U.S. Federal Trade Commission Acting Chair Maureen Ohlhausen<\/span>\u00a0may add a new dimension to the fight.<\/span><\/p>\n

In December, CVS Health announced plans to acquire Aetna for $69 billion. CVS, which also owns the country\u2019s largest retail pharmacy chain, is already ranked as the seventh-largest corporation in the U.S. by Fortune magazine, and critics of the deal say it would give one company too much leverage over the health care system. The Department of Justice and the FTC are empowered under federal antitrust law to stop such an acquisition if it is shown to hurt consumers.<\/span><\/p>\n

\u201cLeft unchecked, the vertical integration of PBMs could destroy competition in community pharmacies, leaving patients with broken provider-patient relationships, higher costs, and less access to patient centered care,\u201d Crawford wrote Sessions and Ohlhausen. \u201cMerging two entities with such a large footprint within the drug supply chain will only exacerbate problems with respect to pharmacy access, especially in underserved areas, like the First District of Arkansas.\u201d<\/span><\/p>\n

In an interview Wednesday morning, Crawford said he was speaking out against the CVS\/Aetna deal because of the actions of CVS Caremark and other PBMs in Arkansas. Crawford, whose brother-in-law is a pharmacist in Missouri, said pharmacies are \u201ca critical part of our health care model in rural America.<\/span><\/p>\n

\u201cHistorically, I stay in my lane \u2014 I work on federal issues \u2026 but the lanes merged here with health care, and so I need to provide a level of support to my counterparts at the state level,\u201d Crawford said. What\u2019s happening in Arkansas is \u201ca case study for \u2026 why they shouldn\u2019t allow that type of merger to take place,\u201d he added.<\/span><\/p>\n

Crawford cited an example of so-called \u201cspread pricing,\u201d in which a PBM charges an insurance company a much higher rate for a particular drug than the rate at which it reimburses a pharmacy for the same product. According to data provided by the Arkansas Pharmacists Association, it recently cost an independent pharmacy in Arkansas about $91 to buy the generic equivalent of Tamiflu, a popular antiviral, from a drug wholesaler. When a Blue Cross patient filled a prescription at the pharmacy, CVS Caremark only reimbursed that pharmacy about $36 for the drug. That meant the pharmacy lost $55 by filling the prescription. <\/span><\/p>\n

Meanwhile, Blue Cross has paid CVS Caremark about $133 for the reimbursement \u2014 meaning $96 of the cost of the reimbursement ostensibly went to the PBM. Blue Cross is by far the largest insurer in Arkansas, and the company covers a majority of beneficiaries on Arkansas Works, the state\u2019s public-private approach to Medicaid expansion.<\/span><\/p>\n

\u201cThe question is, where is this money going?\u201d Crawford asked. \u201cTo say it\u2019s unfair is really a huge understatement. I think it\u2019s possibly illegal \u2014 it just looks illegal \u2014 and it certainly looks unethical.\u201d<\/span><\/p>\n

When asked last month about allegations of unethical or illegal pricing in Arkansas, a spokesperson for CVS Health responded by email: \u201cT<\/span>he Arkansas Pharmacists Association is painting an overall skewed picture of how CVS Caremark reimburses pharmacies. We believe that independent pharmacies in our network are reimbursed fairly and that we are in compliance with state law. It is important to note that APA has repeatedly refused to share specific claims data with us to validate their allegations.\u201d<\/span><\/p>\n

Crawford acknowledged that opposing the Aetna merger won\u2019t directly address the Arkansas pharmacy reimbursement issue. <\/span><\/p>\n

\u201cI\u2019m<\/span> not sure if there\u2019s anything we can do at the federal level to address this Arkansas-specific problem \u2026 I think it\u2019s going to require an Arkansas solution,\u201d he said. \u201cBut what I can do at the federal level is raise this question in general terms that, \u2018Is it good to see this kind of consolidation and vertical integration in the health care industry?\u2019 \u201d<\/span><\/p>\n

He also said the problem of PBMs squeezing pharmacies extended well beyond Arkansas. \u201cThis is happening all over the country. Pharmacists have been visiting members of Congress for the last two years with this complaint,\u201d Crawford said. \u201cWe\u2019ve kind of reached a boiling point \u2026 and while all this is going on, then you see these two companies [CVS and Aetna] seeking to merge and further consolidate control of a large portion of the health care industry.\u201d<\/span><\/p>\n

Crawford has held the First District seat since 2011 and is running for reelection this year against Democratic challenger Chintan Desai.<\/span><\/p>\n

This reporting is courtesy of the Arkansas Nonprofit News Network, an independent, nonpartisan news project dedicated to producing journalism that matters to Arkansans. Find out more at arknews.org.<\/i><\/p>\n

<\/div>\n","protected":false},"excerpt":{"rendered":"

On Thursday, U.S. Representative Rick Crawford (AR-1) sent letters to federal regulators stating his \u201cgrave concern\u201d over the proposed acquisition of Aetna, Inc., one of the nation\u2019s largest insurance companies, by CVS Health, a Rhode Island-based health care conglomerate that has been at the center of a political showdown in Arkansas.<\/p>\n","protected":false},"author":2,"featured_media":13897,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[111],"tags":[],"class_list":["post-13896","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-health-care"],"yoast_head":"\nCongressman asks regulators to slow CVS\/Aetna merger, citing Arkansas pharmacy controversy - Arkansas Nonprofit News Network<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/arknews.org\/index.php\/2018\/03\/08\/congressman-asks-regulators-to-slow-cvs-aetna-merger-citing-arkansas-pharmacy-controversy\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Congressman asks regulators to slow CVS\/Aetna merger, citing Arkansas pharmacy controversy - Arkansas Nonprofit News Network\" \/>\n<meta property=\"og:description\" content=\"On Thursday, U.S. Representative Rick Crawford (AR-1) sent letters to federal regulators stating his \u201cgrave concern\u201d over the proposed acquisition of Aetna, Inc., one of the nation\u2019s largest insurance companies, by CVS Health, a Rhode Island-based health care conglomerate that has been at the center of a political showdown in Arkansas.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/arknews.org\/index.php\/2018\/03\/08\/congressman-asks-regulators-to-slow-cvs-aetna-merger-citing-arkansas-pharmacy-controversy\/\" \/>\n<meta property=\"og:site_name\" content=\"Arkansas Nonprofit News Network\" \/>\n<meta property=\"article:published_time\" content=\"2018-03-08T22:10:21+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/i2.wp.com\/arknews.org\/wp-content\/uploads\/2018\/03\/U.S._Congressman_Rick_Crawford_R-AR_questions_Agriculture_Secretary_Tom_Vilsack_in_2013.jpg?fit=1000%2C702\" \/>\n\t<meta property=\"og:image:width\" content=\"1000\" \/>\n\t<meta property=\"og:image:height\" content=\"702\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:creator\" content=\"@Lindsey_millar\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Lindsey Millar\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"5 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"Organization\",\"@id\":\"https:\/\/arknews.org\/#organization\",\"name\":\"Arkansas Nonprofit News Network\",\"url\":\"https:\/\/arknews.org\/\",\"sameAs\":[],\"logo\":{\"@type\":\"ImageObject\",\"@id\":\"https:\/\/arknews.org\/#logo\",\"inLanguage\":\"en-US\",\"url\":\"https:\/\/arknews.org\/wp-content\/uploads\/2021\/04\/annn_logo.png\",\"contentUrl\":\"https:\/\/arknews.org\/wp-content\/uploads\/2021\/04\/annn_logo.png\",\"width\":1200,\"height\":900,\"caption\":\"Arkansas Nonprofit News Network\"},\"image\":{\"@id\":\"https:\/\/arknews.org\/#logo\"}},{\"@type\":\"WebSite\",\"@id\":\"https:\/\/arknews.org\/#website\",\"url\":\"https:\/\/arknews.org\/\",\"name\":\"Arkansas Nonprofit News Network\",\"description\":\"\",\"publisher\":{\"@id\":\"https:\/\/arknews.org\/#organization\"},\"potentialAction\":[{\"@type\":\"SearchAction\",\"target\":{\"@type\":\"EntryPoint\",\"urlTemplate\":\"https:\/\/arknews.org\/?s={search_term_string}\"},\"query-input\":\"required name=search_term_string\"}],\"inLanguage\":\"en-US\"},{\"@type\":\"ImageObject\",\"@id\":\"https:\/\/arknews.org\/index.php\/2018\/03\/08\/congressman-asks-regulators-to-slow-cvs-aetna-merger-citing-arkansas-pharmacy-controversy\/#primaryimage\",\"inLanguage\":\"en-US\",\"url\":\"https:\/\/arknews.org\/wp-content\/uploads\/2018\/03\/U.S._Congressman_Rick_Crawford_R-AR_questions_Agriculture_Secretary_Tom_Vilsack_in_2013.jpg\",\"contentUrl\":\"https:\/\/arknews.org\/wp-content\/uploads\/2018\/03\/U.S._Congressman_Rick_Crawford_R-AR_questions_Agriculture_Secretary_Tom_Vilsack_in_2013.jpg\",\"width\":1000,\"height\":702,\"caption\":\"U.S. Rep. 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