CVS unit ‘played both sides’ on top drug

WOONSOCKET – A division of CVS Caremark Corp. helped Eli Lilly & Co. market its antipsychotic drug Zyprexa to doctors even as the division was under contract with health insurers to bargain for better prices from the drugmaker, Bloomberg News reported this weekend.

Starting in 2003, AdvancePCS, a pharmacy benefit management (PBM) company that is now a unit of CVS Caremark, used its internal records to decide which mental-health doctors to target with thousands of letters promoting Zyprexa, according to 10,000 pages of internal corporate documents Bloomberg reviewed after they were filed in a $6.8 billion lawsuit against Lilly.

In one proposal, AdvancePCS offered to send 120,000 letters to doctors touting Zyprexa, and asked Eli Lilly to pay $5 for each letter.

Zyprexa costs $3,000 to $9,000 more per year than one generic drug it was looking to supplant, called haloperidol, Bloomberg said. It was Eli Lilly’s best-selling drug last year.

Woonsocket-based CVS is the nation’s largest pharmacy benefit manager, with 82 million patients and 12 percent of the market, according to Atlantic Information Services.

CVS acquired AdvancePCS in 2007 as part of its purchase of Caremark Rx Inc. Caremark Rx, in turn, had bought AdvancePCS in 2004.

CVS Caremark Corp. is not a defendant in the lawsuit, which was filed in 2005 by insurance plans who argue Eli Lilly used outsiders, such as PBMs, to market Zyprexa.

“The problem is that PBMs are negotiating these hidden deals while at the same time telling employers that they represent them at the negotiating table,” Gerry Purcell, a former PBM executive who advises companies on their drug plans, told Bloomberg. “These documents will add fuel to the perception that the companies and the PBMs are in cahoots with each other.”

But spokesmen for CVS and Eli Lilly defended the practice. CVS said it discloses to clients whenever it has financial relationships with pharmaceutical companies.

“CVS Caremark discloses to its PBM clients that it may have financial relationships with pharmaceutical manufacturers in connection with these educational programs,” Christine Cramer, a CVS spokeswoman, told Bloomberg in an e-mail. “CVS Caremark’s PBM clients are aware of these programs and have the opportunity to opt out.”

In addition, Cramer said AdvancePCS had a longstanding policy of disclosing relationships with drugmakers even before its acquisition by either CVS or Caremark Rx.

Robert Garis, a professor at Omaha-based Creighton University who studies the PBM industry, told Bloomberg that most states do not designate PBMs as having a fiduciary relationship with insurers that requires them to act always in their clients’ best interest.

Additional information on the health insurance companies’ lawsuit against Eli Lilly & Co. over Zyprexa, including the corporate documents reviewed by Bloomberg, are available at ZyprexaLitigationDocuments.com.