Connecticut's attorney general subpoenaed CVS Caremark Corp on Wednesday after the company threatened to shut down a consumer discount drug program rather than extend it to Medicaid patients.
Attorney General Richard Blumenthal said the subpoena is part of a probe into CVS Caremark's threat to end its Health Savings Pass program in the state.
A state law that takes effect July 1 would require the Woonsocket, Rhode Island-based company to also offer its lowest drug prices to Medicaid patients.
CVS Caremark is the nation's largest prescription drug provider and second-largest drugstore chain.
Blumenthal said CVS Caremark may have singled out Connecticut, saying the program operates in other U.S. states. Gov. Jodi Rell had asked the attorney general to review whether a closure would be legal.
CVS Caremark's intention to abruptly cancel a popular program that has assisted families in defraying the costs of medications is indeed alarming and raises significant legal questions, Blumenthal said in a letter to CVS Caremark Chief Executive Thomas Ryan. I urge you in the strongest terms to reconsider this course of action.
Mike DeAngelis, a CVS Caremark spokesman, had no immediate comment.
Blumenthal said the CVS Caremark program lets consumers pay a $10 annual fee to fill 90-day prescriptions for any of 400 generic drugs for $9.99.
The subpoena seeks documents to support CVS Caremark's claim that extending the program to Medicaid patients is economically unfeasible.
It also seeks to identify drugs covered by the program, the number of consumers enrolled, and other data. CVS Caremark has until July 9 to comply.
Last November, CVS Caremark said the Federal Trade Commission was investigating its business practices. On May 4, it said a task force including 24 U.S. states, Washington D.C. and Los Angeles County was examining similar issues as the FTC.
Then on Friday, CVS Caremark ended an 11-day dispute with Walgreen Co , the largest U.S. drugstore chain, over prescription drug reimbursements.
Shares of CVS Caremark were off 2 cents at $31.38 in afternoon trading on the New York Stock Exchange.
(Reporting by Jonathan Stempel; editing by John Wallace and Gerald E. McCormick)