Refunds on way to cover CVS business' price error
NEW YORK—The Federal Trade Commission said that it is mailing refund checks to 13,000 Medicare Part D beneficiaries who were overcharged for drugs because a CVS Caremark Corp. business understated the price of the medications.
The FTC says its redress administrator Rust Consulting Inc. began mailing the checks Tuesday. The checks are valid for 60 days from the date they were issued and they must be cashed within that time.
The checks are being sent to seniors who paid significantly more than they should have for drugs used to treat epilepsy and symptoms of breast cancer, among other illnesses, and who were forced into the so-called "donut hole" as a result of the payments. The "donut hole" a gap in government insurance coverage in which no drug costs are reimbursed.
The FTC said the seniors chose their prescription drug plans based on incorrect listings of prices for the drugs. The agency said RxAmerica, which is now a unit of CVS, submitted incorrect prices for the drugs and many Medicare Part D beneficiaries chose RxAmerica's coverage plans based on those listed prices. In some cases, the drugs cost 10 times more than RxAmerica said they did.
CVS Caremark said RxAmerica accidentally published incorrect drug price information on a Medicare site and the FTC said the inaccurate information was also posted on third-party websites. The drugs were sold at CVS stores and Walgreen Co. stores.
CVS Caremark agreed to pay $5 million in January to resolve the allegations. The inaccurate prices were listed from 2007 through at least November 2008. CVS bought RxAmerica in October 2008 when it acquired the Longs Drugs Stores chain.
Consumers who have questions about the settlement can call a toll-free FTC hotline at 1-888-773-8392.
CVS Caremark is based in Woonsocket, R.I. It runs one of the largest pharmacy benefits management companies in the U.S. and one of the largest drugstore chains.