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    Kmart suing Catamaran for shortchanging its pharmacies

    Kmart has sued pharmacy benefits manager (PBM) Catamaran for breach of contract and alleged violations of state and federal laws regarding reimbursements for prescription drug costs.

    See also: Kmart settles pharmacist whistleblower lawsuit for $1.4 million

    The lawsuit, filed in Cook County Circuit Court, requests $38 million in damages and a court order requiring Catamaran to reveal its pricing and reimbursement rates. Kmart alleges that Catamaran “improperly manipulated prescription reimbursements” to make the PBM “a more inviting acquisition target.”

    “As a result of Catamaran’s misconduct, Kmart has been unable to forecast financials, Kmart has experienced rapidly declining reimbursement rates from Catamaran, and, in many instances, Kmart now loses money on those prescriptions,” Kmart’s lawsuit stated. “Catamaran covered up its scheme by intentionally failing to comply with disclosure and state Prompt Pay Laws and by refusing to provide information requested and owed to Kmart.”

    According to Kmart’s lawsuit, Catamaran’s actions involve more than 4.9 million claims and have cost the retailer nearly $40 million. The retailer claims Catamaran paid less than agreed upon or refused to reimburse Kmart for nearly 28,000 pricing appeals.

    Kmart said its “efforts to negotiate in good faith with Catamaran to resolve these disputes informally have been rejected by Catamaran at every turn.”  Catamaran has not yet issued a response to Kmart’s lawsuit.

    Mark Lowery, Editor
    Mark Lowery an Editor for Drug Topics magazine.

    2 Comments

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    • Anonymous
      I wonder why the other chains 'accepted' Catamaran's Drug Discount Card? I not only think it's legitimate for K-mart to bring suit, as well as ALL other pharmacies, but it's clearly an anti-trust violation. What other profession takes it on the chin when PBMs dictate our job duties? I think that reason other much larger chain-drug stores did not officially complain about the Discount Cards is because the 'card' ensured patients would stop in the megashop and buy other non-pharmacy related goods? Heck, these cards were handed out like candy at a 4th of July parade, in Good Housekeeping, in the grocery aisle. Even the STATE of INDIANA was touting these little gems. 'Everyone should have one!!' Or, was it something more insidious like backdoor kickback deals? Fess up, Catamaran.
    • MarkBurger
      The chickens are finally coming home to roost: The CHAIN PHARMACY-DISCOUNT RX-Get-'Em-Into-The-Store-To-Sell-Them-More-Junk-That-The-They-Don't-Need-And-Makes-Them-Sick-er-PBM Model is a failing paradigm. Target got out. Wal-Mart finally admitted that their pharmacies were losers. Walgreen's is shutting down their 24-hour pharmacies and laying off many hundreds of pharmacists. All these are trimming or eliminating their $3 & $4 generic Rx lists. Now K-Mart is trying to recoup $38M from Catamaran. A compounding colleague of mine in Texas is suing CVS/CareMark for their compounding reimbursement joke. I, actually, applaud them (K-Mart & Annie's Apothecary) for standing up to the PBMs. More of us (even those of us in Independent Pharmacies) need to stand up to them. Don't sign contracts that don't make sense! You can't lose on every prescription and make it up in volume. It costs north of $15.00 to fill an Rx. It costs north of $15.00 to fill an Rx. If you lose or get $3.58/Rx you will go out of business. You can't make it up in Wholesaler Rebates, either ... the Drug Companies are giving PBMs rebates that make your Wholesaler Rebate look like chicken scratch. Wake up like K-Mart did. [BTW: I don't applaud them for how they tried to manipulate MediCare and MedicAid reimbursement to their advantage and the giving of coupons to entice Federal/State program enrollees to switch pharmacies. Shame on y'all]. Kudos to the whistle-blowing pharmacist! You should have been given more than $1.4M for saving the Guv'mint much, much more.