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By now, Caremark's customers have already started learning about the government's suspicions and have found themselves swept up in the questioning as well.
Austin, for example, fielded a letter explaining that the Texas attorney general has begun "investigating the possibility of unlawful acts" carried out by PBMs that may be failing to properly reimburse the state's Medicaid program. The letter goes on to mention the possibility of "false and inaccurate reporting" about customers who qualify for Medicaid and Caremark benefits alike.
"Such activities may violate the Texas Medicaid Fraud Prevention Act," the civil investigative demand states. "The Office of the Attorney General of Texas has reason to believe you may have information relevant to its investigation and, therefore ... asks that you answer each of the submitted interrogatories and produce all of the requested documents and other information by the deadline set out below."
The Texas prosecutor then asks the city to supply a slew of data about its relationship with Caremark -- including specific details about its contract -- within about one month. PBMs have fiercely protected such information, inviting attacks about transparency, in the past.
Robert Garis, a pharmacy professor at Creighton University who has studied PBMs extensively, welcomes the latest development.
"I am encouraged every time I see either private litigation or government mandates for transparency," Garis says. "Employers have been, unfortunately, somewhat naive. They have tended to trust the PBM industry a little bit too much and have assumed that the PBMs would look out for their best interests."
Garis says that many PBM clients still have no idea that the industry has attracted so much government scrutiny. Thus, he says, he is "quite sure" that the demand letters from Texas -- revealing the Medicaid fraud probe of Caremark -- will come as a surprise to some.
Melissa Davis
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