CVS Makes An Honest Mistake. And By Honest Mistake I Mean Rips Off Its Customers. Probably To The Tune Of At Least A Million Dollars.

You know how it's illegal, if you run a store, to advertise one price for a product and then charge another, higher price for that product when a customer comes in to buy it? That's why we have rain checks and stuff. Because it's totally illegal to get someone's business by promising to sell something at one price and then charging another.

Unless, evidently, you're CVS. From that bastion of the liberal media, The Wall Street Journal:


Many customers of CVS Caremark Corp.'s SilverScript Medicare prescription-drug programs have been paying higher prices than they were promised when they signed up for the plans in late 2009.
CVS blames the problem on a computer error, which it says caused prices for brand-name drugs to be listed about 4% lower than they should have been. It says the error appeared in data CVS supplied to the Medicare website that allows senior citizens to do comparison shopping between rival prescription insurance plans.
CVS says it has been charging consumers the higher prices since the beginning of 2010.
Many senior citizens use the price-comparison tools in November and December to shop for their Medicare Part D drug coverage for the following year. The tools allow Medicare recipients to plug in the drugs they take, and provide comparative costs for various plans. The inaccurate information, which appeared from Oct. 8, 2009, to Jan. 8, 2010, made the CVS plans seem more attractive than they should have been.

Holy Nader's Raiders Batman!! Surely the guardians of the consumer that toil away in the halls of Washington's bureaucracy will ensure there will be hell to pay for this. Especially with that socialist Obama in charge now, there's just no way a corporation can get away with overcharging its customers. Get ready for the wrath of righteousness CVS!!!!

CVS notified the federal regulator, the Centers for Medicare and Medicaid Services, about the problem in January. A Medicare spokesman said regulators worked with CVS to craft a response plan, under which CVS would offer a refund for the price difference, but only to consumers who specifically requested that. The Medicare spokesman said CVS also agreed to help unhappy customers switch to another plan.

That'll show 'em.

CVS sent letters of apology to affected customers starting in late March. A letter reviewed by The Wall Street Journal didn't mention the possibility of a refund, but directed a recipient with questions to call a toll-free number to discuss "your options."
"Did I pay too much for medication?" the letter said in question-and-answer format. The answer: "No." The letter said the drugs were "priced correctly at the pharmacy, but may have been higher than what the price-comparison tools estimated."
An affected consumer who recently called CVS's toll-free number said he was told he could file a "grievance" to seek a refund for brand-name drugs bought up to that date, but only if he had a printout of the original inaccurate pricing information from the Internet.
A CVS spokeswoman said that consumer's experience wasn't consistent with the company's policy, which is to provide a refund if asked.

So.....I'm gonna do a little back-of-the-envelope math here. Let's say every CVS store has 15 customers in one of these SilverScript plans, and each of these customers has two $120 brand-name prescriptions filled.

Let me know if you think these assumptions unreasonable. I don't think they are.

So, 15 customers x 240 dollars x 4% "mistake" in the advertised price = 144 extra dollars per CVS store. Ho-hum.

Until, that is, we multiply that by the 7,000 retail pharmacies that CVS operates. Do that and now we'll see that "mistake" netted CVS an extra one million dollars of pure friggin' profit. The equivalent of filling an extra 667,000 prescriptions at the standard $1.50 insurance dispensing fee. It's a lot easier to hit a few "wrong" buttons at corporate headquarters while inputting data than it is to fill 667,000 prescriptions. Especially since CVS didn't have to hire the one extra pharmacist and two technicians they would budget to fill 667,000 prescriptions.

And they're gonna get to keep most of that money. Because how many people are going to 1) Notice 2) Be pissed off enough to argue over $10 and 3) Successfully get past the help desk flunkie who's feeding them bullshit about how to get their money back?

Not many. They're totally gonna get away with it.

And just in case you still think this whole episode might really have just been a mistake, ask yourself what would have happened if some schlep would have sent the wrong data to Medicare with a result being that it cost CVS a million dollars by making them undercharge their customers.

That fictional sonuvabitch would have been fired the next day and you know it. And would most likely be working now for Rite-Aid, earning stellar performance reviews.

I'm not saying CVS deliberately ripped people off. But, yeah, it sure is a lot easier to make a "mistake" than it is to actually do more work. Or renegotiate your contract with Medco.

I report. You decide.

Thanks to JayPee, whose blog first tipped me off to this.
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CVS Makes An Honest Mistake. And By Honest Mistake I Mean Rips Off Its Customers. Probably To The Tune Of At Least A Million Dollars.
CVS Makes An Honest Mistake. And By Honest Mistake I Mean Rips Off Its Customers. Probably To The Tune Of At Least A Million Dollars.
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