On Thursday, after birth-control delivery service Pill Club went public with its battle over reimbursement rates with pharmacy company CVS Caremark, the hashtags #CVSDeniesCare and #BoycottCVS started trending on Twitter. Pill Club alleges that, as of early July, CVS is paying it and other mail-order companies less for filling prescriptions, and this rate change will affect its ability to keep operating.
“If we cannot convince CVS to change course in the next few weeks, we will have no choice but to stop serving people with CVS Caremark pharmacy benefits,” Pill Club wrote in a post on its website.
Pill Club is one of several mail-order birth control services, which allow patients to get a prescription via a virtual consultation with a doctor or transfer their current prescription, and then deliver their chosen method of birth control to their door. This makes access to birth control more convenient and affordable, especially for people without insurance, since no in-person visit to a doctor is required.
"Millions of women nationwide are already struggling to access affordable birth control, and Pill Club is trying to close that gap. We deliver to patients who are particularly vulnerable: women who live in rural areas, women of color, young women, and low-income women without insurance,” says Ali Hartley, vice president of legal compliance at Pill Club. “The actions of CVS could effectively deprive tens of thousands of these women of the right to make personal decisions about their own healthcare. We’re urging CVS to reverse course and be a leader in the fight to help women get the basic healthcare they need.”
According to Pill Club, 70 percent of its users previously had difficulties obtaining birth control, and 55 percent said they would have to stop taking birth control without Pill Club. Users took to Twitter to talk about the many medical reasons they take birth control, and the reasons why someone would need to have birth control delivered, including disability, privacy concerns, and living in a rural area.
CVS Caremark is a pharmacy benefits manager (PBM), which is a third-party company that manages prescription drug benefits on behalf of insurers. Theoretically, PBMs keep costs down by negotiating rates with drug companies and pharmacies. However, they are controversial: PBMs receive rebates from drug manufacturers that are usually calculated as a percentage of the drug’s list price, meaning they have reason to favor higher-priced drugs over more affordable ones. Drug companies, in turn, argue that paying rebates has forced them to raise the list prices of drugs. CVS Caremark is one of three large PBMs that together account for more than 70 percent of U.S. pharmacy claims.
“Our coverage of contraceptives is widespread throughout our network of 68,000 pharmacies, ensuring accessible and affordable access to our members. The accusations being made by The Pill Club against CVS Caremark are extremely misleading. The Pill Club continues to be a participating pharmacy in our network and there is no impact on its customers’ access to contraceptives. We are committed to providing access to women’s healthcare and it is irresponsible for The Pill Club to suggest otherwise in an effort to maximize their profits at the expense of our PBM clients,” said CVS in a public statement.
Pill Club disputed this statement on Twitter, saying: "Untrue. Tens of thousands of women will lose access to birth control because of your rate change. That’s a fact (if you release the contract, everyone would know). But let’s stop debating on social media. Let's meet, agree on a revised agreement, and protect women’s healthcare."
A spokesperson for Pill Club said it could not disclose details of its contract with CVS for legal reasons.
A CVS representative also confirmed that, earlier this year, CVS changed the way it reimburses mail order pharmacies, including Pill Club. This counters some claims circulating online that the changes were specifically aimed at contraception. “Other pharmacies in our network with similar business models as Pill Club have agreed to the same terms and reimbursement,” the representative said.
Nurx, another birth control delivery service that contracts with CVS Caremark, stopped short of confirming to VICE that they'd agreed to CVS's new terms, but said they have no updates about service changes at this time. “We continue to serve patients with insurance coverage and don't have anything new to share around any interruptions or changes made to coverage,” a Nurx spokesperson said in a statement.
However, a representative for Pandia Health, another birth control startup, said Pandia is in a similar position as Pill Club—the changes are threatening their business model.
“Small pharmacies can’t buy at the volume that the three to four oligopoly PBMs can, so their cost for birth control (and other drugs) is higher than the PBMs’, and the PBMs are only reimbursing at a rate that makes money for their partner pharmacies,” said Sophia Yen, CEO and co-founder of Pandia Health, who also serves as a clinical associate professor in the Division of Adolescent Medicine at Stanford Medical School.
She provided an example: “A PBM’s mail order or partner pharmacy buys hundreds of thousands of packs of birth control, so they can get it for $4. The small, independent, or new startup pharmacy only buys hundreds of packs, so gets it for $8. Then there’s overhead, cost of labor, shipping, et cetera. So, the PBM reimburses at its price of $4, and the small, local, independent, or startup pharmacy loses at least $4 [on every pack].”
Yen points out that CVS Caremark offers its own mail-order prescription services, so any reductions in reimbursement rates to online pharmacies could be a business move to undercut competition. Some of the other mail order companies affected by CVS's change carry drugs with higher sticker prices like PrEP, erectile dysfunction meds, and skincare drugs, she says, which means they can absorb more of a shortfall. Hers, one such company, said it was not affected because it does not accept insurance. However, Hers was still critical of CVS’s decision, calling it "unacceptable."
“Whether you get your birth control delivered to your door through an app or pick it up at the pharmacy, insurance should cover the cost. Restricting insurance coverage ultimately restricts access to the people who need it most,” said Free the Pill, a group that advocates for over-the-counter birth control.
Calls for a boycott went beyond the Pill Club dispute, with many advocates citing past controversies involving CVS. In 2018, the Wall Street Journal reported that the CVS Health PAC was a major—and early—donor to President Donald Trump’s 2020 reelection campaign. Overall, the CVS Health PAC donates relatively evenly to both Democratic and Republican candidates and PACs. However, its gift of $35,000 to the Trump Victory PAC in 2017 is more than double the size of any of its other single contributions in the past three years. CVS also came under fire in 2018 for donating to America First Policies, a pro-Trump nonprofit. After several of the organization’s staffers publicly made racist and pro-Nazi comments, CVS said it would no longer donate to the group.
The ACLU joined the boycott discussion yesterday, pointing out that a CVS pharmacist refused to fill a transgender client’s hormone prescription. Though the company apologized, it has yet to put policies in place to ensure the same thing doesn’t happen again. Meanwhile, reporting from the Fresno Bee from earlier this month found that CVS was delaying drug treatment for cancer patients.
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