CVS Drops Toyota, Ohio Health Plans

January 21, 2005 ( - Toyota Motor Corp. is requiring employees to get many medications through on-site pharmacies and mail-orders, a move that has caused CVS to opt out of the car manufacturer's drug plan.

CVS also announced that it has opted out of the health plan for the State of Ohio, which affects over 100,000 workers and dependents.

In an effort to curb health costs, Toyota has opened pharmacies at two of its Kentucky planst, and one plant each in Indiana, West Virginia and Alabama, according to the Detroit Free Press. It is requiring its employees – almost 15,000 in total, plus their dependants – to purchase maintenance medication (for chronic illnesses) through the mail or at such pharmacies. Short-term medications can still be purchased through the company drug plan at local drug stores.

In response to this move, the nation’s largest drug chain, CVS, has said that it will no longer accept drug coverage provided by Anthem, the pharmacy manager used by Toyota. A spokesperson told the Free Press that although the company is not opposed to dispensing drugs through the mail, it opposes the mandating of mail order and denying of access to local pharmacists.

“What we oppose are prescription plans that severely limit patients’ ability to choose their preferred channel of delivery,” said spokesperson Eileen Howard Dunn, according to the paper. She said that when employers adopt mail order, CVS often attempts to negotiate with them to ensure customers have access to local pharmacists. When negotiations fail, as they have with Toyota, CVS opts out of the plan.

Toyota has started other programs that are aimed at curbing rising health costs that are eating into profits, according to the paper. In addition to the on-site pharmacies and mail-order systems, the company has raised co-payments on brand-name drugs – to as much as 20% of cost – in order to persuade employees to choose generic drugs. It has promoted a “half-tablet” program, where drugs are ordered in high dosages and employees take half of the prescription.