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Three years ago, a former CVS Health executive told a U.S. Senate committee hearing that the company — which has deep tentacles into the Byzantine system for making prescription drugs available — ensures that its customers receive the lowest-cost medicines.

“When those lower list prices result in the lowest net cost for the patient as well as for the plan, then absolutely, that is the preferred drug on formulary,” said Derica Rice, who was an executive vice president at the time. He was responding to questions about the ways in which CVS places medicines on its formularies, or list of medicines covered by health insurance, created by its pharmacy benefits unit.


But a recently unsealed whistleblower lawsuit argued that, in fact, CVS and its various subsidiaries — the CVS Caremark pharmacy benefits manager, the SilverScript Medicare Part D plan and the CVS chain of pharmacies — conspired to do exactly the opposite. Instead, CVS reached deals with drug makers that yielded profits at the expense of Part D beneficiaries who were denied access to lower-cost generics.

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