Yesterday, Caremark’s Board of Directors unanimously rejected holding discussion with Express Scripts over its merger proposal and “affirmed its strong commitment to Caremark’s pending merger of equals with CVS Corp.” In a detailed press release, Caremark further explained that

As a result of having received antitrust clearance, integration planning for a CVS/Caremark merger is underway, assuring achievement of synergies starting in 2007. Caremark and CVS have filed a joint proxy statement with the Securities and Exchange Commission and are proceeding forward to a vote on the pending merger at special shareholders meetings to be held in the first quarter of this year.

The Caremark proxy statement for this shareholders meeting can be viewed on the SEC website. is publicly available CVS expressed its appreciation of the Caremark Board’s decision.

Express Scripts issued its own press release which seeks to rebut the Caremark Board’s rationale for rejecting its proposal and announcing that

Express Scripts intends to file a proxy statement in connection with Caremark’s special meeting of stockholders at which the Caremark stockholders will consider the CVS Merger Agreement and matters in connection therewith.

On January 12, during the first 100 hours of the 110th Congress, the House of Representatives will consider H.R. 4, a bill with 189 co-sponsors and the AARP‘s backing, that would require the Secretary of Health and Human Services, beginning in 2008, to negotiate with drug manufacturer “lower” prices for Medicare Part D covered drugs without using a formulary. (A private Medicare Part D plan sponsor would be permitted to attempt to negotiate even lower prices.) The bill’s objective is lower the cost of the Medicare Part D program in order to close the so-called doughnut hole in Part D coverage.

The New York Times and the Washington Post published articles today describing the flaws in this approach as articulated by critics. The New York Times also reported that HHS announced yesterday a lower long term projection of Medicare Part D costs — “In July, the Bush administration estimated that payments to private plans offering the Medicare drug benefit would total $1.077 trillion from 2007 to 2016. Officials now estimate they will be $964 billion.” According to the Times report, CMS Acting Administrator Leslie Norwalk attributed the reduction to lower drug costs in general and lower enrollment as seniors found alternate drug coverage, such as employer sponsored coverage.

Sen. Max Baucus, who chairs the Senate Finance Committee, plans to hold hearings on the issue soon according to the Washington Times.

On January 4, 2007, the White House announced that President Bush will appoint Howard Weizmann to be the Deputy Director of the U.S. Office of Personnel Management. Mr. Weizmann currently is the President of the Private Sector Council (PSC), a program of the Partnership for Public Service.

Mr. Weizmann’s bio indicates that during the course of his carrier he has been Senior Vice President of the European Business Operations and Senior Vice President of Human Resources at Digex, Inc.; a Managing Consultant at Watson Wyatt Worldwide; Vice President in charge of Aetna Life Insurance Company’s value-added consulting business; a compensation and benefits attorney with Drinker Biddle and Reath; and the Manager of Benefits Planning and in-house attorney for the Sun Oil Company.

Mr. Weizmann’s nomination requires Senate confirmation. He will replace Dan Blair, who has become Chairman of the Postal Regulatory Commission (previously the Postal Rate Commission).

Express Scripts has sent a letter to Caremark stockholders urging them to reject the CVS proposal to acquire CVS, which already has cleared Hart-Scott-Rodino anti-trust review. According to an AP report, “Analysts say Caremark managers prefer the CVS offer while shareholders like the Express Scripts deal better” as it offers a higher premium. In a press release, Tom Ryan, Chairman, President and CEO of CVS replied that “CVS remains resolute in its commitment to seeing our merger through.” Meanwhile, the shareholder lawsuits against the CVS deal wind their way through the courts. This should come to a head soon.

The Democrat Party controlled 110th Congress will convene on Thursday January 4. Sen. Joe Lieberman of Connecticut and Rep. Henry Waxman of California will chair the Senate and House committees with oversight responsibility for the Federal Employees Health Benefits Program. According to Steve Barr’s column in today’s Washington Post, an aide to Sen. Daniel Akaka, who will chair the Senate’s Oversight of Government Management, Federal Workforce, and District of Columbia subcommittee, “plans to review the federal employees health insurance program and how it sets premiums.”

OPM announced last week that 690,000 federal employees and annuitants enrolled in the new supplemental dental and vision plans (FEDVIP) during the recent initial Open Season. OPM also reported that FSAFEDS enrollment has grown to 226,000 as a result of the Open Season, which is a 26% increase in employees who have a health care or dependent care flexible spending account.

Steve Barr reports in today’s Washington Post that one of OPM Director Linda Springer’s new objectives is to explore “whether a program could be created to offer short-term disability insurance to federal employees.”

Welcome to 2007! There are a few recent Government Accountability Office (GAO) reports that may catch your interest. On December 19, the GAO released a report on prescription drug manufacturer research and development efforts that clearly caught the attention of incoming House Government Reform Chairman Henry Waxman. No doubt, a GAO report on improvements needed in FDA oversight of direct to consumer advertising also will resonate with the incoming Congress. Finally, last Friday, December 29, the GAO released a report on the profitability of the federal government’s long term care insurance program carrier, Long Term Partners LLC.

During the past year, I blogged quite a bit about the generic version of the anti-coagulant drug Plavix battle between Bristol Myers and Apotex. In the latest rounds, the U.S. Court of Appeals for the Federal Circuit on December 8 affirmed the preliminary injunction that the district court awarded Bristol Myers against Apotex’s continued marketing of the generic version in the U.S. The lower court did not require Apotex to withdraw the generics that it had already sold, however, and neither did the appellate court. Earlier this week, a Canadian appellate court rejected an Apotex attempt to sell the generic version in Canada. The U.S. district court now will consider whether Apotex violated Bristol Myers’ patent on Plavix.

I also blogged about the theft of a Veterans Affairs Department laptop computer that held personal data on millions of veterans. That case ended with the recovery of the computer, and the FBI determined that the information had not been abused. On December 21, President Bush signed the Veterans Benefits, Health Care, and Information Technology Act of 2006 , Pub. L. No. 109-461, that tightens up information security at that Department, among other things.

Laura Landro wrote this week in the Wall Street Journal about the extension of the online social networking phenomenon, e.g. My Space, to health care issues, such as diabetes. She notes a dedicated web site called Dailystrength.org. She also notes that the American Cancer Society and the U.S. Centers for Disease Control are using a social networking site call Second Life as a bully pulpit. I had never heard of Second Life until I read this article. Second Life is a site where you can live a second life as an avatar — over 2,000,000 users (not me). Landro reports that “The CDC has held some virtual health fairs on the Second Life Web site where visitors can learn about subjects like pandemic flu resources.” Creative.

Ihealthbeat.com makes available an interview with former U.S. health IT czar Dr. David Brailer who makes predictions about health care IT in 2007.