A CVS customer was entitled to damages after his name and address were taken from a prescription list and used as part of a mailing campaign without his permission, according to a recent ruling by a Massachusetts Superior Court judge.
CVS Pharmacy failed to notify the customer it was profiting from the arrangement, the judge found.
Rhode Island-based CVS argued its actions were lawful because it had not disclosed any of the customer’s privileged medical information and had included an explanation in the letter that the mailing was funded by a co-defendant pharmaceutical company, Merck & Co, Inc.
But Judge Ralph D. Gants disagreed with that argument, ruling CVS violated the Massachusetts consumer protection statute (Chapter 93A) by not adequately revealing its financial arrangement when it sent letters to customers discussing the link between high cholesterol and heart disease. The judge also ruled that Merck violated the consumer protection law as well.
The judge added that a pharmacy deprives customers of critical information whenever it gives medical advice to consumers without clearly indicating that it stands to make a net profit by doing so.
“[Only] with such information, the patient reasonably may question whether the advice was intended to serve the health and best interest of the patient or the financial health and best interest of the pharmacy,” he said. “This information is so important to the appropriate evaluation of the advice that it is fundamentally unfair to the patient for the pharmacy to deprive him of it.”
Gants said because no disclosure of the customer’s prescription information occurred, CVS did not breach its duty of confidentiality to the customer.
The 32-page decision is Kelley v. CVS Pharmacy, Inc., et al. (Docket No. 98-0897).

Cards on the table

David Pastor of Boston, who represented the customer, said “what Judge Gants found objectionable, was that [CVS] took the personal information that people submitted to the pharmacy when filling out a prescription and used it in their marketing program for profit.”
Before deciding what value to place in such a letter, Pastor said customers were entitled to be fully advised of any financial arrangements made by the pharmacy.
“If pharmacies are going to take a customer’s prescription information and use it to make a profit, what they at least have to do is fully disclose it,” he said.
Jason B. Adkins of Boston, who also represented the customer, added that although the damages awarded were small, his client met his goal of trying to stop CVS from sending out such letters in the future.
Moving forward, he said, his client plans to ask Gants to reconsider a December 2006 decision to decertify a previously certified group of plaintiffs in a class-action suit.
Citing pending motions for reconsideration by several of the involved parties, Michael S. Gardener of Boston, who represented CVS, declined comment.

Special delivery

In 1996, CVS Pharmacy agreed to mail certain letters about high cholesterol to customers who had been prescribed certain medications. Merck & Co. approved the letters before they were mailed.
CVS, which never asked for its customers’ consent before sending the letters, identified those who should receive the mailing and provided an administrator with a database that contained customers’ names, addresses and dates of birth.
On the second page of the letter, recipients were given the chance to check a box if they no longer wished to receive “CVS/pharmacy prescription-related mailings.”
At no time did CVS disclose the personal information of customers to the co-defendant company. Rather, CVS simply informed the company, which paid the pharmacy $2 for each mailed letter, of the number of customers who had received such letters.
Days before being sued, CVS announced it was terminating the mailing program.
In 1997, the plaintiff, Jeffrey Kelley, a CVS customer who had filled a prescription there for diabetes medication, received one of the letters.
Sent on CVS stationery by the “Staff of CVS/pharmacy,” in small print on the bottom of the letter it stated that “[f]unding for this mailing was provided by Merck & Co.”
In his complaint, the customer argued that CVS had violated his right to privacy and engaged in an unfair and deceptive act or practice by sending the letter.
He further alleged CVS breached its obligation to protect the confidentiality of his prescription information and misappropriated information that belonged solely to him.

The motive

In granting partial summary judgment against CVS, Gants said that without a full financial disclosure, the customer may have reasonably assumed that the information in the letter was medical advice provided solely for his health and best interests.
“The key question then is whether it is an unfair act or practice in violation of Chapter 93A for a pharmacy to use customer information that it obtained for the sole purpose of filling prescriptions for its own financial gain, without the consent of the pharmacy customer,” he said.
In general, Gants said it was not improper for pharmacies to use information obtained from confidential records in order to send customers letters about health and safety issues.
“It only becomes an unfair practice if the pharmaceutical company goes beyond reimbursement of the cost of mailing, pays the pharmacy an amount likely to generate a significant net profit from the mailing of these letters, and the pharmacy fails to reveal to the patient that it is profiting from the mailing of the letters,” he said.
As a matter of law, Gants ruled that the customer was entitled to recover the net profit that CVS obtained from its mailing of the letter under Chapter 93A.
However, where the case – once a class-action suit – had earlier been decertified and the customer was proceeding as an individual, Gants found he was only entitled to the minimum statutory damage award of $25 plus reasonable attorneys’ fees.