New York suit challenges prescription file sale
A New York confidentiality lawsuit seeking $200 million could impact future sales of pharmacy patient files.
A breach of confidentiality lawsuit filed by a New York City AIDS patient could have an impact far beyond the $200 million judgment being sought on behalf of thousands of CVS Corp. customers. The case has implications for a pharmacist's duty to patients and for the way prescription files are sold and transferred.
The case was recently approved as a class action lawsuit on behalf of N.Y. consumers whose Rx files were sold and transferred without their consent to CVS pharmacies. But it was originally filed in October 1999 by an AIDS patient after the independent pharmacy he patronized was sold to the Rhode Island-based drugstore chain.
The unnamed plaintiff did not discover his Rx files had been transferred to CVS until he was stopped at the door of the closed pharmacy by workers apparently doing inventory, said Manhattan attorney Richard Lubarsky. The suit was filed against CVS Corp., the individual CVS store that purchased the Rx files, the independent pharmacy, and its owner. But as a class action, it now includes every New York independent pharmacy purchased by CVS between 1993 and 1999.
"First and foremost, we want this practice to stop," Lubarsky told Drug Topics. "We're also seeking $100 million in compensatory damages and $100 million in punitive damages for the class members. We're not objecting to a pharmacy's going out of business and doing something with that business. But before that happens, tell me, as a customer, because it's the customers' decision to make about who has access to their personal medical and prescription information."
State court judge Charles Ramos agreed that pharmacists have a duty to protect confidential patient information. His decision to let the case proceed was based on the common law doctrine of fiduciary duty, on the implied contract between the pharmacist and patient, and on deceptive practices under the state's general business laws. However, he found that the defendants did not violate the state's confidentiality rule for HIV patients, the public health law, or any pharmacy regulations governing Rx file transfers.
"Because pharmacists have a certain amount of discretion and an obligation to collect otherwise confidential medical information, the court must find that customers can reasonably expect that the information will remain confidential," Judge Ramos wrote. "While the role of a pharmacist may not equal that of a physician treating a patient, surely access and the right to collect private medical information on one's customers does not make a pharmacist merely the dispenser of a commercial product. Customers must place some degree of trust and confidence in the pharmacist filling their prescriptions."
The plaintiff contends that CVS prohibits a seller from telling customers that a pharmacy is being sold and its Rx files transferred, said Lubarsky. He expects to prove that the reason CVS doesn't give patients advance notice is to increase the likelihood that someone will stay with CVS.
CVS Corp. does not prohibit pharmacy owners from informing customers of the impending sale of their businesses, said a spokesman for the chain. He added that CVS values patient confidentiality and its Rx file buy policy meets legal and industry standards. "Some owners do provide notice, some do not," he added. "That's a decision made by the independent pharmacy. We derive no benefit from notice not being given. And in states that do require advance notice, such as Virginia, our program of purchasing pharmacies has not been hindered in the least."
If CVS does gag independent pharmacy owners, it raises an additional question of whether that violates freedom-of-choice laws in 34 states that protect insurance beneficiaries, said John Rector, National Community Pharmacists Association general counsel and senior v.p. of government affairs. He added, "If CVS buys files, especially with a gag, the responsibility for getting the consent of the patients would rest with CVS."
The patient-consent issue underscores the fact that merely posting a sign on the closed pharmacy's door to inform patients their Rx files have been transferred doesn't work anymore, said Carmen Catizone, executive director, National Association of Boards of Pharmacy (NABP). Today's consumers are much more savvy and involved in their own health-care decisions; they want to be informed and they want their privacy protected, he said. NABP is closely watching the New York case.
"The whole issue of selling prescription files has been a gray area," Catizone said. "I think we'll see more states look at the issue. Years ago, people would have said a sign on the door was acceptable and not questioned it, but today that's not meeting a standard people think should be there."
Carol Ukens
Carol Ukens. New York suit challenges prescription file sale.