- within Antitrust/Competition Law and Insurance topic(s)
Florida’s Attorney General has announced an antitrust investigation into CVS Health and Caremark, CVS’s wholly owned pharmacy benefit manager (PBM). Similar investigations are occurring in multiple states over PBMs’ business practices, including issues related to transparency, reimbursement, and market concentration. Arkansas and Tennessee have even enacted state laws to limit pharmacy ownership of PBMs, although those laws face legal challenges.
To that end, the Florida Attorney General has issued a Civil Investigative Demand for documents and witness testimony concerning PBM policies and procedures. More specifically, the investigation is focusing on whether Caremark inappropriately steered patients to CVS pharmacies and reimbursed CVS pharmacies at higher rates than it did for independent pharmacies. The investigation also seeks information on audits in which Caremark allegedly clawed back payments made to pharmacies or otherwise utilized contracts to harm independent businesses. Finally, Florida has asked for information on reimbursement rates, pharmacy contracts, rebates, audits, and expansion plans, giving CVS until July 28, 2026, to reply.
For its part, CVS says that it will cooperate with the Attorney General’s investigation to address its concerns. CVS continues to argue that drug manufacturers, not PBMs, determine prescription medication prices. CVS also states that it maintains relationships with independent pharmacies as part of its Caremark pharmacy networks.
PBMs serve as intermediaries between plans, employers, pharmacies, and drug manufacturers. Their main functions are to negotiate drug prices, administer formularies, and handle reimbursement to pharmacies for prescription drug claims. Caremark is one of the three largest PBMs in the nation, which collectively process about 80% of all prescriptions issued in the U.S.
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