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CVS Settles Pennsylvania Suit

September 16, 2004
Pennsylvania consumers who were charged the full price for prescription drugs to treat injuries sustained in automobile accidents will be getting refunds from CVS pharmacies.

That's just part of the agreement reached between Attorney General Jerry Pappert and the drug store chain. CVS is also required to post a written notice in its more than 360 Pennsylvania locations, informing consumers that it will not fill prescriptions associated with car crashes.

Pappert said his Bureau of Consumer Protection entered into an "Assurance of Voluntary Compliance" agreement with CVS to resolve alleged violations of Pennsylvania's Consumer Protection Law, Motor Vehicle Financial Responsibility Law (MVFRL) and Automobile Insurance Medical Cost Containment Regulations, which went into effect in 1990.

According to the Commonwealth, CVS implemented a corporate policy which allowed the company to fill prescriptions without applying the 20 percent discount required under the MVFRL and Cost Containment Regulations on all drug prescriptions associated with injuries from auto accidents. The state created the discount requirement in 1990 to reduce the cost of insurance to policyholders.

"In Pennsylvania, pharmacies that fill prescriptions related to car accidents must honor the discount," Pappert said. "However, pharmacies, as a company policy, can decide not to fill these particular prescriptions at all. In this case, CVS was accused of filling the prescriptions for auto accident victims without applying the discount or notifying its customers that the discount is available under law."

CVS is accused of failing to adequately disclose to customers the true reasons for not filling these particular prescriptions. Customers at some CVS stores were told that the pharmacy is "not able to handle this type of claim." In reality, CVS simply decided it did not want to handle auto accident drug claims.

"Under the agreement, CVS must disclose to customers its corporate policy not to fill prescriptions subject to the Motor Vehicle Financial Responsibility Law and regulations which allows consumers to receive a 20 percent discount on auto accident related prescriptions," Pappert said.

In addition, CVS must clearly and conspicuously post a notice that informs auto accident victims that it will not honor the discounted price should they decide to bring these particular prescriptions to one of its stores.

Under the terms of the assurance, CVS admits no wrongdoing and is required to comply with the following or be subject to civil penalties:

• Refund consumers the difference between the discounted price and the full price paid. Consumers seeking refunds must file a complaint before December 12, 2004 and document that they paid full price for drug prescriptions related to an auto accident.
• Fully comply with the Consumer Protection Law, MVFRL and the Automobile Insurance Medical Cost Containment Regulations.
• Make full disclosures to consumers regarding its policy not to fill prescriptions related to auto accident injuries at the legally required discounted price.
• Pay $25,000 to the Commonwealth for investigation costs and other public protection purposes.

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