CVS Health's Caremark has agreed to pay $45 million to Illinois to settle allegations that it failed to pass through rebates in a recent contract, according to a new report.
Stat obtained the settlement agreement, which claims the pharmacy benefit manager "unlawfully deprived the state" of rebates that it owed. Kwame Raoul, Illinois' attorney general, kicked off an investigation of Caremark amid concerns that rebates were not being appropriately passed back to Illinois.
Raoul also argued that Caremark did not make clear its relationship with other entities within CVS Health, namely its retail pharmacies and the group purchasing organization Zinc Health Services.
In the settlement, however, the PBM denies wrongdoing. The company noted in a statement to Stat that Illinois recently renewed its contract with Caremark.
"We look forward to continue working with the state for the benefit of its employees," the company told the news outlet.
Caremark is one of three large PBMs that dominate the market alongside Cigna's Express Scripts and UnitedHealth Group's Optum Rx. All three are vertically integrated with a major national health plan as well as other units including GPOs, healthcare services and data analytics.
PBMs have been under increasing scrutiny amid concern about the role they may play in driving up the cost of drugs in the U.S. Just this week, the leaders of those three large firms testified before Congress, and the relationship between them and their affiliated GPOs as well as the rebate relationships with drugmakers were on the discussion docket.
The Federal Trade Commission has also been investigating PBM business practices and vertical consolidation, and, in a report earlier this month, stopped short of arguing in favor of breaking up these companies. However, it did say some common practices are likely to warrant greater oversight.