Indiana attorney general opposed to drug store settlement offers

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Bob Segall/13 Investigates

Pharmacy board director calls motions "bizarre" and "procedurally flawed."

Indianapolis - Two years after WTHR found local drug stores were violating patient privacy, some of those drug stores are trying to reach a settlement with the state.

State regulators say the settlement offers are unlike anything they've seen before.

"To be perfectly honest, it's kind of bizarre," said Marty Allain, director of the Indiana State Board of Pharmacy.

Allain is referring to settlement offers proposed by CVS and Low Cost Rx. Those pharmacies, along with Walgreens, are facing discipline by the pharmacy board for tossing out sensitive patient information in unsecured dumpsters.

The patient information was included on thousands of customer records and pill bottles WTHR retrieved from drug store dumpsters as part of a nationwide investigation that exposed the problem at pharmacies across the country.

Following WTHR's 2006 investigation, the pharmacy board filed formal complaints against 18 Indiana drug stores and their pharmacists for failing to protect customer privacy.

CVS and Low Cost Rx have now filed motions to settle the complaints. As part of their settlement proposals, the nine CVS and one Low Cost Rx pharmacies have offered to:

- place a newspaper ad in the Indianapolis Star telling customers that protecting customer privacy is important

- post the same information at the pharmacy counter inside each drug store

- explain detailed steps they've taken to improve customer privacy

- train all employees in proper procedures designed to protect customer privacy

- pay a $1,000 fine

CVS and Low Cost Rx are also asking the pharmacy board to dismiss all individual complaints against their pharmacists.

But the board may not be receptive to the drug stores' requests for settlement, and Allain says the proposed settlement motions are "procedurally flawed."

"I've never seen anything like it," he added.

Traditionally, pharmacies seeking a settlement with the state do so by reaching consensus with the attorney general's office, and attorneys representing the pharmacies and the office of the attorney general present a settlement proposal to the pharmacy board for approval. In these cases, there is no consensus.

Despite two meetings between the OAG and the attorney for CVS and Low Cost Rx, the sides have not yet reached an agreement. The drug stores have filed a settlement proposal anyway. By asking for the pharmacy board to approve a settlement that does not have the OAG's blessing, the drug stores are venturing into unchartered waters, and state officials do not seem to like it.

In a statement sent to WTHR, the attorney general's office wrote: "The OAG would be opposed to a settlement."

The Indiana State Board of Pharmacy usually relies on the recommendation of the OAG when reviewing settlement offers and issuing decisions.

Nevertheless, the settlement offers from CVS and Low Cost Rx will be presented to the pharmacy board on Monday. No one knows how the board is going to respond - especially because this is the first time the board has been asked to discipline drug stores for trashing their patients' privacy.

"It's up to [pharmacy] board members to review the motions," Allain said. "Ultimately, it's their decision."

Michael McMains, the attorney representing CVS and Low Cost Rx, did not return multiple phone calls from WTHR.

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