Florida AG subpoenas CVS Health in probe of 800 pharmacy locations

Florida's attorney general opened a formal investigation into CVS Health's pharmacy benefit manager practices, alleging the company may use its dual role to steer patients to its own stores and underpay independent rivals.

Florida Attorney General James Uthmeier issued a civil investigative demand to CVS Health on Tuesday, probing whether the company's Caremark PBM steers patients to its own 800 Florida pharmacies and pays them higher reimbursements than independent competitors.

"Here you have a situation where it appears one company has gotten so big that they are controlling market power in a way that might manipulate pricing at the cost of consumers," Uthmeier said during a press conference.

The subpoena, with a July 28 deadline, demands documents and sworn testimony covering pharmacy contracts, reimbursement rates, differential treatment of CVS-owned versus independent stores, and the company's expansion plans. CVS operates about 9,000 pharmacies nationwide, while Caremark — one of three PBMs that together process about 80 percent of U.S. prescriptions — manages drug coverage for health plans covering millions of patients.

The probe adds to mounting bipartisan scrutiny of vertical integration in the PBM industry, with lawmakers in Washington and multiple states calling for structural separation of PBM and pharmacy ownership. If the investigation finds evidence of anticompetitive conduct, it could accelerate regulatory action that forces CVS to unwind the business model that has long been central to its profitability.

The civil investigative demand seeks information on whether Caremark imposes burdensome audits that result in payment clawbacks from independent pharmacies and enforces contract provisions that place smaller operators at a disadvantage. Such practices, the attorney general's office said, contribute to pharmacy closures and the creation of "pharmacy deserts" — areas where patients, particularly seniors and low-income families, have limited access to prescription medications.

Aneesh Lakhani, incoming president of the Florida Pharmacy Association, called the investigation a necessary response to industry practices that independent pharmacists have long protested. "The system wasn't broken — PBMs broke the system," Lakhani said. "We will not rest until they are held fully accountable."

Agency for Health Care Administration Secretary Shevaun Harris also voiced support, saying the action aims to ensure Florida's health-care system serves patients rather than corporate interests.

CVS spokesman David Whitrap said the company "will work with the Florida Attorney General to address any concerns." Independent pharmacies "remain vital to CVS Caremark's networks," Whitrap said, adding that the company welcomes the opportunity to "set the record straight around these market dynamics."

The three largest PBMs — Caremark, Express Scripts by Cigna, and OptumRx by UnitedHealth Group — control about 80 percent of the prescription market, a concentration that has drawn scrutiny from the Federal Trade Commission and lawmakers in both parties. The FTC sued the three largest PBMs last year over alleged anticompetitive practices related to insulin pricing, a case that remains pending.

CVS shares traded up 0.27 percent on Tuesday, suggesting limited immediate concern among investors about the Florida probe's near-term impact. But the investigation adds to a growing legal and regulatory overhang that could weigh on the stock if other states or federal authorities pursue similar actions. The last time a state attorney general launched a comparable probe into PBM practices — a 2023 Ohio investigation into Express Scripts — it preceded a wave of state-level legislation targeting PBM transparency, with more than 30 states introducing bills to regulate the industry.

This article is for informational purposes only and does not constitute investment advice.