8/6/2019 Letter to Nathan Re CVS

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COUNCIL OF THE DISTRICT OF COLUMBIAWASHINGTON. D.C. 20004

July 20, 2011Irvin B. NathanAttorney GeneralDistrict of ColumbiaOffice of the Attorney General441 4th Street, NWWashington, DC 20001

Re: Request for Investigation: Neighborhood Pharmacies and Fair CompetitionDear Mr . Nathan:

I am writing to request that you open a formal investigation into the circumstancessurrounding CVS Caremark Corporation's termination of P&M Pharmacy, Inc., which does businessas Cathedral Pharmacy, from its CVS pharmacy benefits manager provider network, as well as thelarger unfair trade practices issues these facts suggest. Cathedral Pharmacy and its sole owner,Michael Madden, have served the citizens of Ward 3 for 38 years. In fact, a neighborhood pharmacyin that locale has provided for District of Columbia residents since 1924.

According to published reports and available court documents, in August of 2010 CVSperformed an audit on Cathedral focusing on antiretroviral drugs used for the treatment of AIDS.Cathedral participates in a federally funded program, called the AIDS Drug Assistance Program(ADAP), and receives the same AIDS drugs from the D .C. Department of Health for qualifyingpatients as it does from private sources for private customers using a pharmacy benefits manager(PBM) such as CVS. According to court papers, the ADAP drugs automatically replenish withoutany "invoicing," while the private AIDS drugs are invoiced when new supply is purchased from drugwholesalers.

CVS notified Mr. Madden that due to "discrepancies" in the audit performed by CVS, hisprovider status within the CVS network would be terminated. In response, Mr. Madden explainedthe distinction bet\veen invoices for private product and "manifests" for ADAP replenishments .CVS has now terminated Cathedral from its provider network . It is my understanding thatterminations of this nature have received numerous complaints nationwide. There is substantialconcern that CVS is using its audit process as a means to eliminate small, local pharmacie s. (Seehttp:/ /tinyurl.com / 25jom3t; See a/Jo / / www.nytimes.com / 2011 / 04/ 15/ business / 15cvs.html).Therefore, I request a formal investigation for the following reasons:

(I) Th e citlZens of the District, particularly the elderly and infirm, have a substantialinterest in the health and vitality of neighborhood pharmacies that offer personalizedcustomer service that large retail chains cannot match;

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8/6/2019 Letter to Nathan Re CVS

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(2) The citizens of the District have a substantial interest in consumer choice. Whilelarge retail chains may be that choice for many citizens, others who would preferpersonalized services from a tlUsted neighborhood practitioner deserve to have thatchoice;

(3) CVS' alleged conduct -- if proven -- may well constitute violations of the District'santitrust laws and unfair trade practices (including the common law); and(4) CVS's actions as PBM raise significant concerns regarding data-mining and thepotential for abuse of that data. For example, in Cathedral's case, CVS is bothCathedral' s largest PBM (with access to some of it most sensitive data) and its largestretail pharmacy competitor. The data-mining issue goes beyond fair competition,however, to include privacy concerns and improper uses of an individual's mostsensitive medical data -- all issues that I believe deserve your full attention.

Thanks for your attention to this matter-at stake are important issues of public health,consumer choice, and fair competition. Please let me know if you need anything further from me.

Best regards,ary M. ChehChairman Pro Tempore,Councilmember, Ward 3