Bob:
Non-disparagement and confidentiality clauses are standard in most contracts between two entities.
The language you share is not a “gag” clause as you label it, and clearly there are independent
pharmacies participating in our network that are talking about their relationship with CVS Caremark in a
negative manner, with media or other audiences.
In addition, while our contracts with participating pharmacies indicate that the rate at which they are
reimbursed for a drug is considered confidential, CVS Caremark does not prevent pharmacists in our
network from informing their patients of the cash price of a prescription drug. In fact, our contracts
with all dispensing pharmacies in our network require that CVS Caremark members always get the
benefit of at least the lower of the pharmacy’s cash price or the plan’s copay. In addition, if a CVS
Caremark plan member’s copay for a drug is greater than the dispensing pharmacy’s contracted rate, it
is not our practice to collect that difference from the pharmacy.
We have seen pharmacist associations in various states paint a skewed picture of the reimbursement
they receive from CVS Caremark by cherry-picking some claims and omitting others to disseminate
biased and unverified information. In addition, the associations have been unwilling to provide details to
us related to the reimbursement claims they are sharing so we are unable to validate and speak to the
information. The facts are that on an aggregate basis, we reimburse independent pharmacies at a
higher rate than larger regional and national chains.
Furthermore, CVS Caremark considers local, independently-owned pharmacies to be important partners
in creating our pharmacy networks, and in fact, independent pharmacies account for nearly 40% of our
network and the number of independents in our network has remained relatively stable for the last 25
years. We reimburse our participating network pharmacies, including the many independent
pharmacies that are valued participants in our network, at competitive rates that balance the need to
fairly compensate pharmacies while providing a cost-effective benefit for our clients.
Overall, we would not comment on the specifics of a competitor’s contract and we stand by the terms
and conditions outlined in our own contracts. Finally, we consider our contract template to be
proprietary and confidential and would not share it publicly.
Regards,
Chris
Christine Cramer│Senior Director, Corporate Communications
p 401-770-3317 │c 401-626-5675
CVS Health │One CVS Drive, Woonsocket, RI 02895

 Bob:
Per your follow-up questions, please see below.

1. To reiterate, our PBM, CVS Caremark does not engage in the practice of copay clawbacks, and

we have no plans to do so. If a PBM plan member’s copay for a drug is greater than the
dispensing pharmacy’s contracted rate, it is not our practice to collect that difference from the
pharmacy. In addition, we do not prevent pharmacies from discussing the availability of a lower
drug price for cash-paying patients with members and, in fact, our PBM members always get the
benefit of at least the lower of the pharmacy’s cash price and the plan’s co-pay.
In addition, earlier this month we published a statement in support of two new pieces of federal
legislation being proposed around the issue of clawbacks and gag clauses. You can find that
statement and our position at the following link to our corporate web
site: https://cvshealth.com/newsroom/press-releases/cvs-health-applauds-new-legislationbetter-inform-pharmacy-choices

2. We believe that independent pharmacies in our network are reimbursed fairly. The facts are

that on an aggregate basis (meaning across our full book of business in a state, not by cherrypicking some claims and omitting others), we reimburse independent pharmacies at a higher
rate than larger regional and national chains.
In addition, we had announced a few weeks ago that we will be introducing a generic effective
rate that would provide independent pharmacies in Arkansas with generic reimbursement
predictability that would balance the need to fairly compensate independent pharmacies while
providing a cost-effective benefit for our clients, while also reimbursing independents in
Arkansas at a higher rate than national chains.

3.

CVS Health maintains stringent firewall protections between our CVS Pharmacy retail business
and our CVS Caremark PBM business, and takes these protections very seriously. Our retail
business has engaged in acquisition activity and outreach to other pharmacies since well before
CVS and Caremark merged and the communications materials related to this activity has been
relatively unchanged over the years. In fact our retail business discontinued solicitation letters
to independent pharmacies and smaller chains last Fall. Any retail acquisition activity is
completely unrelated to, separated from, and not coordinated in any way with the PBM
business’ management of its pharmacy network.

Regards,
Chris
Christine Cramer│Senior Director, Corporate Communications
p 401-770-3317 │c 401-626-5675
CVS Health │One CVS Drive, Woonsocket, RI 02895