A number of Rhode Island’s independent pharmacy owners are responding today to a Providence Journal article from last week highlighting the call from the Partnership for Rhode Island, a nonprofit CEO roundtable, for Governor Dan McKee’s re-election campaign to stop its criticism of CVS in ads aimed at McKeen’s primary opponent Helena Foulkes.

The independent pharmacy owners say large corporations like CVS Health need to be held accountable for practices that harm consumers and hurt independent pharmacies. The pharmacy owners point to a May 2025 lawsuit filed by Attorney General Peter Neronha against CVS Caremark, CVS’s Health’s pharmacy benefit manager (PBM), alleging predatory practices that have driven independent pharmacies out of business.

The lawsuit also accused CVS Caremark, and two other large PBMs, Express Scripts and Optum Rx, of violating Rhode Island’s Deceptive Trade Practices Act with actions that deceived Rhode Islanders into thinking the companies were saving them money when in fact they were limiting drug choices and costing them more at the pharmacy counter in order to boost corporate profits.

“Rhode Island’s CEOs should not turn a blind eye to corporate behavior our own Attorney General labeled predatory and coercive,” said Nick Shanos, owner of Suburban Pharmacy in Warwick, one of 13 independent retail pharmacies operating in Rhode Island. “CVS can remain a vital part of Rhode Island’s economy, but they should stop using their dominant market power to force independent pharmacies to accept below cost reimbursement while paying their own pharmacies more for the same prescription.”

The AG’s lawsuit cites a report from a local independent pharmacist who said that CVS Caremark only reimbursed her $2,200 for drugs that cost over $2,800 despite reimbursing CVS pharmacies over $4,000 for the exact same drug. “These practices unfairly lessen independent pharmacies’ ability to compete with big, chain pharmacies, ultimately raise prices for consumers, and deny consumers their choice of pharmacy,” the lawsuit reads.

The AG’s lawsuit also accuses CVS Caremark and the other defendants of limiting the list of covered drugs to increase rebates and other fees. “Because exclusions were so profitable for Defendants, the number of medicines excluded from Defendants’ formularies increased 961% from 2014 (109 unique drug exclusions) to 2022 (1,156 unique drug exclusions). Drugs used to treat chronic conditions—including insulin, antidepressants, antipsychotics, and antiarrhythmics—are most frequently excluded by Defendants, which means Defendants’ unfair and deceptive restriction of these drugs may have long-term adverse consequences for the consumer-patients who require them. In other words, the choice of drugs available to consumers becomes driven not by which drug is safest or most effective for consumers, but by financial side-deals governing whether and at what cost-share amount a drug is placed on Defendants’ formulary.”

The independent pharmacy owners launched a grassroots campaign earlier this year, anchored with a website, and have recruited hundreds of loyal customers who weighed in with members of the General Assembly this session on the need for PBM reform. Several PBM reform measures have since been signed into law that require significant disclosures by PBMs seeking to do business in Rhode Island, including reporting details on whether PBMs pay independent pharmacies less than the PBM receives from an insurance company for a prescription.

The independent pharmacy owners, and their customers, have also been pressing former CVS Pharmacy president and gubernatorial candidate Helena Foulkes for months on where she stands on the AG’s lawsuit and whether she supports PBM reform. Foulkes recently disclosed to Suburban Pharmacy owner Nick Shanos that she does not support the AG’s lawsuit. Foulkes has also not detailed what steps she would take to protect independent pharmacies from predatory PBM practices.

“I’d like to hear Helena Foulkes explain which of the accusations in the AG’s lawsuit she disagrees with,” said Paul Capuano, co-owner of JB’s Pharmacy in Warwick. “I’d also like her to disclose what she knew when serving as President of CVS Pharmacy about Caremark’s reimbursement practices that disadvantaged independent pharmacies in favor of the CVS pharmacies she ran.”

Matt Olivier, owner of Matt’s Local Pharmacy in Middletown, RI, said dispensing fees from CVS Caremark can be as low as ten cents per prescription, far less than his costs when factoring in overhead expenses for staff, equipment, supplies and other operating costs. Financial losses on these prescriptions are worsened when his reimbursement for the drug itself is at or below his acquisition cost. “I can’t imagine CVS Caremark is paying these ridiculously low dispensing fees to their own pharmacies, or reimbursing them at or below their acquisition costs,” said Olivier. “Helena Foulkes could easily help answer this question since she ran CVS Pharmacy and I call on her to do so.”

Tim Baker, the retired owner of Baker’s Pharmacy in Jamestown, Rhode Island, had to close his pharmacy due to the financial squeeze from PBMs. “The culprits in the closing of Baker’s Pharmacy are the pharmacy benefit managers who kept forcing us to accept below cost reimbursement for prescriptions,” said Baker. “As hard as we tried, there was no way we could stem the losses. If it weren’t for these predatory practices, my son would be running Baker’s Pharmacy today.”

Bill Quirk, a registered pharmacist and the owner of Seaside Pharmacy in Westerly, RI, offered other examples of how CVS Caremark manipulates that rules around pharmacy benefits to help CVS pharmacies at the expense of independent pharmacies. “CVS Caremark allows CVS pharmacies and CVS’s mail order pharmacy to provide 90-day medication refills but restricts independent pharmacies to only 30-day refills,” said Quirk. “As the AG’s lawsuit details, CVS Caremark also steers more profitable pharmacy business to its own pharmacies at the expense of independent pharmacies.”

Quirk also took issue with the State of Rhode Island’s contract with CVS Caremark to administer the pharmacy benefit for state employees. “If a state employee wants to use an independent pharmacy, they have to contact CVS Caremark to get approval to use a pharmacy other than a CVS,” said Quirk. “That turns the pharmacy freedom of choice concept on its head.”

“No one is disputing the important role CVS Health plays in Rhode Island’s economy,” said Suburban’s Nick Shanos. “But that doesn’t mean we have to accept behavior that has shuttered independent pharmacies and limited choices for Rhode Islanders while costing them more at the pharmacy counter.”

Candidates in Attorney General Race Pledge to Pursue Lawsuit Against CVS Caremark and Other Defendants

Several of the candidates running to succeed term limited Attorney General Peter Neronha have told the independent pharmacy owners they will aggressively pursue the lawsuit against CVS Caremark and the other two PBM defendants if elected attorney general.

“While serving as a senior leader on the executive team in Attorney General Peter Neronha’s Office, we filed a significant lawsuit against Optum Rx, CVS Caremark, and Express Scripts,” said Keith Hoffmann, Neronha’s former Chief of Policy and Senior Counsel. “These giant PBMs have exploited their market dominance to undercut independent pharmacies here in Rhode Island and across the country. They also deceived Rhode Islanders, suggesting that they secured prescription drug savings for us when in fact they caused drug prices to skyrocket. I’m proud to have been a part of the team that stood up to these companies and I’m grateful that Attorney General Neronha has endorsed me to succeed him. As Attorney General, I’ll continue the fight to ensure access to health care for all Rhode Islanders – and demand accountability from PBMs that have violated the law.”

"I worked hard in the General Assembly to advance PBM reform, and it was always an uphill fight against companies with money and influence,” said State Representative and AG Candidate Joseph Solomon. “The Attorney General's case against Optum Rx, CVS Caremark, and Express Scripts is about holding all of these PBMs accountable for practices that hurt patients and independent pharmacies. As Attorney General, I'll see it through."

Solomon’s first cousin, Peter Solomon, runs the pharmacy his great uncle opened decades ago. Today, Anthony’s Pharmacy operates in Johnston and uses the original Anthony’s Pharmacy location on Manton Avenue in Providence for non-retail pharmacy operations.

“I saw firsthand the value independent pharmacies provide when my dad was managing a serious illness late in his life,” said Kim Ahern, former Special Assistant Attorney General and candidate for Attorney General. “The independent pharmacy in his hometown supported him with a level of care and personal attention I'd never seen before. As Attorney General, I will always stand with Rhode Islanders in the fight to protect patients and the local, independent pharmacies that support them.”

Rhode Island’s independent pharmacy owners joined forces today to launch a grass roots campaign to help secure long-sought pharmacy benefit manager (PBM) reform in the Rhode Island General Assembly. The campaign, kicked off at Suburban Pharmacy in Warwick, seeks to leverage a lawsuit filed last May by Attorney General Peter Neronha against CVS Caremark, Express Scripts and Optum Rx, the nation’s three largest PBMs.

The AG’s lawsuit alleges that these companies engaged in “coercive, exploitative, collusive, abusive, deceptive, predatory, restrictive, and exclusionary” conduct by taking advantage of their significant power in the PBM market to force independent pharmacies to accept unfair contractual terms”.  The lawsuit also alleges that the PBM Defendants’ conduct “denies consumers free and fair access to the pharmacy of their choice.”

The Federal Trade Commission secured a landmark settlement with one of the nation’s largest pharmacy benefit managers (“PBMs”), Express Scripts, Inc., and its affiliated entities (collectively “ESI”). The settlement requires ESI to adopt fundamental changes to its business practices that increase transparency, are expected to drive down patients’ out-of-pocket costs for drugs like insulin by up to $7 billion over 10 years, bring millions of dollars in new revenue to community pharmacies each year, and advance the Trump Administration’s key healthcare priorities.

The FTC’s enforcement action against ESI, as well as Caremark Rx and OptumRx, alleges that the PBMs created a system that artificially drove up the list prices of drugs by preferencing rebates. The complaint alleges that this system pushed insulin manufacturers, among others, to compete for preferred formulary coverage based on the size of rebates off the list price rather than net price, which ultimately benefitted the PBMs, including ESI, which keep a portion of the inflated rebates. According to the FTC’s complaint, the inflated list prices hurt patients whose out-of-pocket payments like copays and coinsurance are tied to the list price of the drug.

“Community pharmacy owners are the canary in the coal mine when it comes to federal or state prescription programs,” said NCPA CEO B. Douglas Hoey, pharmacist, MBA. “For years, our members and we have been telling anyone who will listen — and worked to convince others who wouldn’t listen — about the PBM-insurer conglomerates gobbling up market share, driving up drug costs, crushing small-business pharmacies, and making it more difficult for patients to receive the care they need. We’ve been warning that unless action is taken, more pharmacies will close, and more pharmacy deserts will grow. Unfortunately, as time passed, we were proven correct and finally, there is action to help reverse these trends.

Providence Journal Op-Ed by Suburban Pharmacy Owner Nick Shanos

I love being a community pharmacist because I can really get to know my patients and provide personalized medication counseling. I share my love of pharmacy with immediate and close family members; my brother Zaheer Akbar, recently opened Park Avenue Pharmacy in Cranston; my cousin Hursh Patel, a pharmacist, recently opened Coventry Pharmacy, and another cousin, Hasan Iqabl, also a pharmacist, helps me manage Park Square Pharmacy.

Beyond a shared love of the personal service an independent pharmacy can provide, we also share a common threat. Pharmacy Benefit Managers, who act as middlemen between health plans, pharmaceutical manufacturers and pharmacies, have routinely forced independent pharmacy owners like me in Rhode Island to accept reimbursement rates below cost for certain prescriptions, a practice that has driven more than a dozen independent pharmacies in Rhode Island out of business over the past 20 years.

In 2018, my wife and I poured our life savings into opening Matt’s Local Pharmacy in Middletown. I’d previously worked as a pharmacist for a major chain drug store and also worked in a hospital pharmacy but I wanted to own my own pharmacy so I could provide more personalized service to my patients. I’ve been able to do just that over the past eight-plus years, but I’ve also faced a serious challenge that threatens the very existence of my pharmacy.

Pharmacy Benefit Managers (PBMs), who act as middlemen between health plans, pharmaceutical manufacturers and pharmacies, have routinely forced me and other independent pharmacy owners in Rhode Island to accept reimbursement rates below cost for certain prescriptions, a practice that has driven more than a dozen independent pharmacies in Rhode Island out of business over the past 20 years.

Thankfully, our Attorney General, Peter Neronha, is not afraid to challenge CVS Caremark and other major PBMs for their unfair trade practices. On May 27, 2025, the Attorney General filed a lawsuit against CVS Caremark, Express Scripts and Optum Rx.

Attorney General Neronha filed a lawsuit in Providence County Superior Court against the country’s largest Pharmacy Benefit Managers (CVS Caremark, Express Scripts, and Optum) and their affiliated Group Purchasing Organizations (Zinc, Ascent Health Services, Emisar Pharma Services) for their role in unfairly and deceptively increasing the costs of prescription drugs, limiting care choices for Rhode Islanders, and harming local businesses.

The complaint alleges that the defendant Pharmacy Benefit Managers (PBMs) and Group Purchasing Organizations (GPOs) deceive consumers by branding themselves as a source of cost-savings when in fact they profit directly from cost increases. These defendants act as intermediaries between health plans and other entities in the drug distribution chain, such as prescription drug manufacturers and pharmacies. Often secretive and unknown to consumers, PBMs and GPOs exploit the complex scheme of pricing and payment for prescription drugs, and they take a cut of ever-increasing drug prices at every step of the way. They may also make decisions about formularies – the lists of drugs that are available to plan enrollees – that unfairly restrict access to safe and effective medications.