(Updated, 10:45 a.m.)
WOONSOCKET – CVS Caremark Corp. CEO Thomas M. Ryan said yesterday he is broadly supportive of the Obama administration’s push for health care reform but does not support a House committee’s proposal to force CVS and other companies to disclose how much they pay for drugs.
During a conference call with investors, Ryan said he thinks the Congressional Budget Office will determine that forcing the disclosures would raise the cost of prescription drugs by interfering in price negotiations. “We think when the CBO scores this, I’m not sure it will survive,” he said, according to a transcript posted on Seeking Alpha, an investor Web site.
The proposal was included in the health care reform bill passed last week by the House Energy and Commerce Committee. It followed a request made by five senators for the Federal Trade Commission to open a new investigation into whether the 2007 merger of CVS and Caremark hurt competition, Bloomberg News reported.
CVS is the largest prescription provider in the United States and manages most of the $10 billion federal pharmacy benefit program, which has higher costs than similar programs run by the Veterans Administration and Defense Department, according to Bloomberg.
“You know, people keep talking about transparency,” Ryan said on the call. “The real issue is to lower costs and make health care more competitive, and in some cases transparency doesn’t do that because people have confidential information and suppliers are less inclined to give you different prices.”
While protective of CVS’ business interest, Ryan has been broadly supportive of President Barack Obama’s goal of reforming the U.S. health care system. “I don’t think our health-care system is broken,” he told BusinessWeek magazine in February. “We are just spending too much, and it’s unproductive.”
Ryan argues that CVS Caremark, which processed more than 1 billion prescriptions in 2008, is uniquely positioned to help increase efficiency in the medical sector because of its vast electronic database of patient information and its investments in health information technology.
In yesterday’s investor call, Ryan said CVS has been “front and center on [health care reform] in our discussions in Washington and [with] local members of Congress.”
“We strongly support expanding coverage but we also believe that … with expanded coverage there has to be some reform measures that both improve health care and reduce costs,” he said, adding that expanding health insurance coverage to millions of uninsured Americans is likely to help CVS’s bottom line, as well.
Ryan also pointed to MinuteClinic, the company’s retail health clinic service, as “a microcosm of what you want in health care reform. It’s accessible, it’s affordable, and it’s good quality, which is all the things that the administration and Congress were talking about.”
