Retail pharmacy giant CVS and prescription benefit manager Caremark closed on their merger today, less than a week after the Caremark shareholders voted in favor of the deal. The rejected suitor, Express Scripts, appears to have made a quick recovery from its disappointment.

Some are suggesting that nationwide expansion of the Medicare program is the solution to our health care problems. That group does not include me. Harry Cain, who is a retired Blue Cross executive, published an thought provoking article in a Health Affairs blog which explains why Medicare is “a model of special interest legislation.”

As discussed in the FEHBlog, five members of the AHIC Consumer Empowerment Workgroup dissented against the Workgroup’s recommendation that there should be certification process for personal health records (PHRs). PHRs tend to be created by health plans and insurers based on claims records while electronic health records are created by health care providers. The dissenters argue that the PHR product is immature from a certification standpoint and that certification standards cannot assure privacy and security protections.

Modern Healthcare.com reports that the debate carried over to this week’s HITSP meeting. HITSP is the ANSI organization that creates interoperability standards for health information technology. HITSP has created its own security and privacy workgroup. The article accurately describes the debate as the “chicken-or-egg situation now faced by the government in its efforts to promote IT: Which comes first, the privacy protection policy or the privacy protection IT standards?” The HITSP workgroup is developing privacy and security constructs to support that AHIC work group use cases that have been approved, e.g., the electronic patient registration, electronic diagnostic test results. The HITSP workgroup is studying the patient consent issue which according to the article may be stricter than the HIPAA privacy rule. This reminds me of Governor Bredesen’s warning to the HIMSS conference about which I previously blogged — over complication is becoming a problem.

As discussed in the FEHBlog, two health care bills likely to be enacted in this Congress are the Sen. Wellstone memorial mental health parity bills and the genetic non-discrimination bills. The New York Times has published relevant articles over the past two days.

In today’s Times, there is an article by Robert Pear under the headline “Proposals for Mental Health Parity Pit a Father’s Pragmatism Against a Son’s Passion.” The Senate bill was introduced by Sen. Ted Kennedy, while the stronger House bill was introduced by his son, Rep. Patrick Kennedy. Both men have described their bills as being based on the Federal Employees Health Benefits Program’s successful mental health parity initiative. However, the article fails to mention that both bills vary from the FEHB Program’s cost effective approach in that they require parity for out-of-network benefits. The FEHB Program’s mental health parity initiative is limited to in-network benefits which incents members to use the cost-effective network providers. Also neither bill recognizes the role of the Office of Personnel Management because the bills lump the FEHB Program with other programs covered by the Public Health Service Act.

In Sunday’s Times, there was a front page article about a young woman’s decision to undergo genetic testing to learn whether or not she has the fatal illness Huntington Disease whose symptoms appear in middle age.

I saw an Aetna advertisement for its online personal health record (PHR) tool last Thursday on NBC and last night on CBS. The brief advertisement showed a woman inputting information about an over the counter (OTC) prescription into her online PHR and then the PHR responds with a warning about a potential conflict between the OTC drug and a prescription drug that also was recorded on the PHR. The ad explains that the warning also is sent to the woman’s doctor. Should the alert be sent directly to the doctor? This creates additional work and liability for the doctor, and it strikes me that the patient should be making the call on whether to consult the doctor. It may be that the patient has been taking both drugs for a long time without any side effects.

In all likelihood the warning to the doctor is an optional feature of the Aetna tool, but I am always interested in the second bounce of the ball. I read an editorial in the AMA News last week about the medical community’s dissatisfaction with e-prescribing 1.0. One of the complaints was too many drug interaction warnings.

The Wall Street Journal is reporting that

Caremark Rx shareholders voted to approve a $26.5 billion takeover offer from drugstore operator CVS. The approval capped a monthslong bidding war between CVS and Express Scripts for the pharmacy-benefits manager. Express Scripts’ offer was higher than CVS’s, at about $27.2 billion, but would’ve taken longer to clear regulatory hurdles.

The CVS shareholders vote on the company’s merger proposal tomorrow and the Caremark shareholders vote on Friday. Last month, three major proxy advisory services advised Caremark shareholders against the CVS bid. This time around, after CVS has sweetened the deal, two firms Glass Lewis & Co. and Proxy Governance continue to oppose the CVS deal while Institutional Shareholder Investors recommends an aye vote, according to Reuters.

Forbes reports that “Last week, both CVS and Express Scripts had outstanding cash and stock offers for Caremark of about $26.5 billion. However, price shifts and Monday closings tweaked those offers to about $26.14 billion from CVS, and about $27.28 billion from Express Scripts.”

All that’s left are a couple more tweaks and the votes.

At its March 13 meeting, HHS’s American Health Information Community approved, with some dissension, a consumer empowerment workgroup recommendation that product certification be made available for insurer record based personal health records, according to Government HIT magazine and Healthcare IT News. The dissidents complained that certification is premature and could stifle innovation.

Modern Healthcare.com is reporting that the White House has rejected the “key ideas” of the Congressionally mandated Citizens’ Health Care Working Group: “In written comments to Congress and to the group, administration officials said that ‘the working group chose an approach based on mandates and government intervention rather than an approach emphasizing consumer choice and options. In reviewing the working group’s report, we have major concerns with some of the recommendations.'”

The Wall Street Journal featured a fascinating article by Sarah Rubenstein yesterday on generic drug costs (freely accessible reprint from the Pueblo Chieftain). At last week’s FEHBP carrier conference, prescription benefit management company representatives explained how generic drug costs will not dip much below the brand name price during the 180 day period during which the generic manufacturer who won the race to challenge the patent has exclusive sales rights. Ms. Rubenstein’s article points out that pharmacies may be trying to maintain the relatively high generic price after the expiration of the exclusivity period (although I expect this is a high retail price not the price paid by the PBMs.) There is a lot more flexibility on pricing generics as compared to brand name drugs because generic drugs are not subject to the Medicaid best pricing requirement. In fact, I understand that generic drugs are more expensive in Canada than they are here. Medicaid’s best price rules are changing, however, and I am not certain how those changes will impact generic pricing for health plans and consumers.