Corcoran et al v. CVS Health Corporation

Northern District of California, cand-4:2015-cv-03504

Exhibit 7

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Exhibit 7 Transcript of John Martin Lavin Date: January 5, 2017 Case: Corcoran, et al. -v- CVS Pharmacy, Inc. Planet Depos Phone: 888-433-3767 Fax: 888-503-3767 Email: Internet: Worldwide Court Reporting | Interpretation | Trial Services Transcript of John Martin Lavin 1 (1 to 4) Conducted on January 5, 2017 1 3 1 UNITED STATES DISTRICT COURT 1 Defendant's Email string ending with email 158 Exhibit 707 from Paul Hoolihan to Aaron 2 NORTHERN DISTRICT OF CALIFORNIA 2 Roesing and Holly Sambora, dated January 12, 2010, 3 3 Corcoran - CONFIDENTIAL,) Caremark-0000829 - 837 4 Christopher Corcoran, et) 4 al.,) 5) 5 Plaintiffs,) 6) 6 v.) Case No. 3:15-cv-03504-YGR 7) 7 CVS Pharmacy, Inc.,) 8) 8 PREVIOUSLY MARKED EXHIBITS Defendant.) 9 _____________________________) 9 Exhibit 672 Agreement PCS Health Systems Page 41 10 and CVS Pharmacy dated 10 March 31, 1997 11 11 Exhibit 679 2016 Caremark provider manual Page 58 12 VIDEOTAPED DEPOSITION OF JOHN MARTIN LAVIN 12 13 13 14 Phoenix, Arizona 14 INSTRUCTIONS NOT TO ANSWER 15 January 5, 2017 15 Page 14 Line 3 16 Page 14 Line 8 16 17 17 18 18 19 19 20 21 20 22 21 23 22 Prepared by: 24 Meri Coash, RMR, CRR 23 Certified Reporter 25 Certification No. 50327 24 25 2 4 1 I N D E X 1 VIDEOTAPED DEPOSITION OF JOHN MARTIN LAVIN WITNESS PAGE 2 2 was taken on January 5, 2017, commencing at 8:31 a.m. at JOHN MARTIN LAVIN 3 3 the law offices of Galbut & Galbut, PC, Camelback Examination By Mr. Levine 6 4 4 Esplanade, 2425 East Camelback Road, Suite 1020, Phoenix, Examination By Ms. Mainigi 158 5 5 Arizona, before Meri Coash, a Certified Reporter in the Further Examination By Mr. Levine 165 6 6 State of Arizona. 7 7 8 8 9 9 * * * 10 EXHIBITS MARKED 10 APPEARANCES: 11 EXHIBITS DESCRIPTION PAGE 11 For the Plaintiffs: 12 PRITZKER LEVINE, LLP Plaintiffs' Declaration of John M. Lavin 15 12 By: Jonathan K. Levine, Esq. 13 Exhibit 701 180 Grand Avenue 13 Suite 1390 14 Plaintiffs' 2009 Caremark provider manual 57 Oakland, California 94612 Exhibit 702 14 415-692-0772 15 Plaintiffs' Network Performance October 1, 100 15 16 Exhibit 703 2008, Troubleshooting Set Price For the Defendants and Deponent: Generic Programs, 16 WILLIAMS & CONNOLLY, LLP 17 Caremark-0002102 - 2104 By: Enu Mainigi, Esq. 17 Colleen McNamara, Esq. 18 Plaintiffs' Narrative Onset Price Program 116 725 Twelfth Street, NW Exhibit 704 18 Washington, DC 20005 19 202-434-5000 Plaintiffs' Cash Offering Project Assumptions, 120 19 20 Exhibit 705 Confidential 09/15/08, Caremark-0002105 - 2108, 20 21 Confidential Also present: Florence Crisp, Esq.; Thao Pham, 21 Esq.; and Philip Walberer, videographer 22 Plaintiffs' Email from Domenico Gugliuzza to 154 Exhibit 706 John Lavin, Thomas Gibbons, John 22 23 Kirby, Jeffrey Knudson, John Murphy, Dan Rocha, Paul Ferschke, 23 24 Gregory Sciarra, and Daniel Schmid, dated April 9, 2013, with 24 25 attachment, CVSC-0317696 - 697 25 PLANET DEPOS 888.433.3767 | WWW.PLANETDEPOS.COM Transcript of John Martin Lavin 25 (97 to 100) Conducted on January 5, 2017 97 99 1 so I would never expect them to be part of the usual and 1 MR. LEVINE: Okay. We can take a break. 2 customary, so. . . 2 THE VIDEOGRAPHER: This marks the end of 3 Q. So where -- 3 Tape Number 2 in the deposition of John Lavin. We are off 4 MS. MAINIGI: John, whenever is a good time 4 the record at 10:57. 5 for a break. 5 (A recess ensued.) 6 MR. LEVINE: Yeah, I'm almost there. 6 THE VIDEOGRAPHER: Here begins Tape Number 3 7 BY MR. LEVINE: 7 in the deposition of John Lavin. We are back on the 8 Q. So where -- Looking at the contract -- the 8 record at 11:20. 9 "usual and customary" language in the contract, where does 9 BY MR. LEVINE: 10 the contract exclude cash discount card programs? 10 Q. So let's turn to the next section of your 11 A. Because that -- It says if a member, as you 11 declaration, which is entitled "Set-Price Generic Programs 12 stated -- like, 50 times restated, that when you walk in 12 Versus Club Programs." Do you see that? 13 and the pharmacy doesn't know that, they wouldn't have -- 13 A. Yes. 14 they wouldn't know there -- that that member was part of a 14 Q. Okay. And you distinguish I think what you call 15 cash discount card if they -- if the pharmacy didn't -- if 15 set price generic programs from what you call club 16 the member -- or, the patient, I should say, didn't 16 programs in paragraphs 15 through 17. Is that fair to 17 identify that they were part of that cash discount 17 say? 18 program. 18 A. Yes. 19 Q. So if somebody's a member of a -- doesn't have 19 Q. All right. And aren't -- Well, let me ask you 20 insurance but is simply a member of a cash discount -- has 20 this. Was there a document you were referring to or 21 a cash discount card, that just -- that they're no longer 21 looking at when you were draf- -- or, talking with your 22 a retail customer paying cash. That's your -- that's 22 lawyers about this section of the declaration? 23 Caremark's view? 23 A. I'm not exactly sure which one you're referring 24 MS. MAINIGI: Objection. 24 to. Which document are you referring to? 25 A. THE WITNESS: I -- I think that's a 25 MR. LEVINE: Let's go ahead and mark this as 98 100 1 mischaracterization. There are people with insurance like 1 the next exhibit, please. 2 myself that also have cash discount cards. So it depends 2 (Plaintiffs' Exhibit 703 was marked for 3 on whether the member is utilizing -- you know, using 3 identification.) 4 that. So as I stated earlier, I don't think that's a -- 4 BY MR. LEVINE: 5 that's a definitive breakout. 5 Q. For the record, Exhibit 703 is Caremark-0002102 6 BY MR. LEVINE: 6 through 04. It's entitled "Network Performance, 7 Q. Well, for the purpose of determining who fits 7 October 1, 2008, Troubleshooting Set Price Generic 8 within the definition of usual and customary price, is it 8 Programs." 9 Caremark's view that where it says particular retail 9 And have you seen this before? 10 customer if such customer were paying cash, that the only 10 A. Yes. 11 person that fits within that category is my example, which 11 Q. Okay. And you'll see, if you turn to the last 12 is I walk in and I don't pull out anything and there's 12 page, that it's authored by Brian Correia? 13 nothing on record for me, and if I pull out any kind of 13 A. Correct. 14 card whatsoever and apply for any discount through any 14 Q. Okay. And did you have any role in drafting this 15 program, I'm no longer that person? 15 document? 16 MS. MAINIGI: Objection. 16 A. Brian and team drafted it. I'm -- and I 17 A. THE WITNESS: It would be -- I mean, I -- 17 reviewed -- I reviewed it -- the document. 18 I -- I think I understand your question, but I'll sort of 18 Q. What is network performance? On the cover, 19 restate it just so I understand it. 19 you'll see that -- 20 It would be the cash price that if you came 20 A. Network performance is the -- is the area that 21 in -- I'll just say the Walmart everyday low price, it's 21 Brian Correia runs, and we have performance criterions and 22 the price, it's not a discount, it's not a negotiated 22 we -- it also includes the audit area. 23 price with another entity, cash card, PBM, you know, other 23 Q. And what's the -- Do you know what the genesis 24 insurance company, payer, whatever -- you know. It would 24 of this document is? 25 be that cash price. 25 A. This was a document as -- as -- After the -- the PLANET DEPOS 888.433.3767 | WWW.PLANETDEPOS.COM Transcript of John Martin Lavin 26 (101 to 104) Conducted on January 5, 2017 101 103 1 generic program launched by Walmart, there was a lot of 1 A. They're both -- we deter- -- we stated that -- I 2 information -- a lot of -- we clarified our position as 2 looked at it as a club plan, standard set price generic 3 these programs started to roll out. And this was a 3 program. 4 document that we could use internally, and also there were 4 Q. You would agree that the document prepared by 5 a lot of questions coming from our various clients. So 5 Mr. Correia, which is Exhibit 703, identifies both as set 6 this was a document -- it was an internal document, but it 6 price generic programs, correct? 7 was a document that could be used by my staff and then 7 MS. MAINIGI: Objection. 8 also by our account management and sales group to -- to 8 BY MR. LEVINE: 9 answer questions and to set out our position to clients. 9 Q. If you look at the second -- top of the second 10 Q. Was there ever a written document, that you're 10 page. 11 aware of, that was actually provided to clients about the 11 A. It -- it stands what he -- how he put it. That's 12 set price generic programs? 12 what it is. 13 A. There were documents that -- that went out to 13 Q. Do you disagree with how he characterized these? 14 clients. I don't -- I didn't get personally involved with 14 MS. MAINIGI: Objection. 15 those. My role was primarily to explain how we -- how we 15 A. THE WITNESS: In hindsight, I -- I think I 16 categorized the -- these programs. 16 would have just said they were generic programs. But it 17 Q. So this document is dated October 1, 2008, 17 is what it is. 18 correct? 18 BY MR. LEVINE: 19 A. That's correct. 19 Q. Did you refer to this document when you were 20 Q. And that's before the HSP program was rolled out 20 drafting your declaration or talking to your lawyers about 21 by CVS? 21 drafting the declaration? 22 A. CVS was the last -- they were late to the game, 22 A. I don't remember specifically. 23 so they were one of the last -- they were the last big 23 Q. Is this the only document you were aware of that 24 pharmacy chain to roll out a program, that I'm aware of. 24 memorializes Caremark's position with respect to how it 25 First was Walmart, as I stated. Then some of the grocery 25 was treating these different programs? 102 104 1 store chains, then Walmart -- excuse me, Walgreens, then 1 A. I can't say if this is the only document that 2 Rite Aid, and CVS. I think it actually occurred after 2 exists, but this is our -- this is my -- this is 3 this. 3 consistent with our position for my network team and for 4 Q. And in terms of -- just generally in terms of the 4 the -- for Caremark. 5 rollout of the HSP program and your awareness of it, when 5 Q. Well, is this the only document you're aware of? 6 did you become aware of the HSP program? And I'm just 6 MS. MAINIGI: Objection. He personally? 7 starting with you personally, then I'll go broader. 7 MR. LEVINE: Yes. 8 A. I mean, I was aware that -- that there was -- I 8 MS. MAINIGI: We're not in the 30(b)(6) 9 had general awareness that there was a -- that there 9 mode? 10 was -- that CVS -- CVS was rolling out some kind of 10 MR. LEVINE: Nope. 11 program, as were most of the other pharmacies -- chains in 11 A. THE WITNESS: Okay. Can you restate the 12 the industry were do- -- you know, most of them were 12 question? 13 having some response. And my first awareness was really 13 BY MR. LEVINE: 14 more as we were -- we -- we were setting them up as a 14 Q. Is this the only document you're aware of that 15 client of a PBM client to set up the program to process 15 memorializes in writing the distinction that Caremark is 16 the claims, and one of my employees was involved with that 16 drawing between the two different kinds of set price 17 effort. 17 generic programs? 18 Q. We'll get into that more in a bit. 18 A. Yes. 19 So in your declaration, you distinguish 19 Q. So what do you -- What are the differences, in 20 between what you call a club program and then a set price 20 your mind, between the two programs -- the two types of 21 generic program, right? 21 programs that makes them different with respect to usual 22 A. Well, it's a club program and then I would call 22 and customary pricing? 23 it our standard set price generic program. They're both 23 A. So the -- the club plan -- I'll just do it in 24 generic programs. 24 order as listed on this document -- is a -- is a generic 25 Q. They're both set price generic programs? 25 program where the member had to register for the program. PLANET DEPOS 888.433.3767 | WWW.PLANETDEPOS.COM Transcript of John Martin Lavin 27 (105 to 108) Conducted on January 5, 2017 105 107 1 And then there were some other, you know, attributes 1 Q. When you say "general management," who are you 2 that -- you know, that we've listed down below. Most of 2 referring to? 3 them had a situation where once the member enrolled, there 3 A. Our management of Caremark. 4 was enrollment, eligibility file, and then the -- you 4 Q. The people above you? 5 know, the pharmacy would send the claim in to that 5 A. People who -- people above me and also people in 6 program. And those programs, you know, included -- You 6 other -- in other parts of the organization. 7 know, the first one that I was aware of, I believe, was 7 Q. Who else did you talk to at -- above you with 8 Walgreens, and then there were others like CV- -- you 8 respect to this issue of the classification of the generic 9 know, Rite Aid and CVS. And then in comparison was what 9 programs? 10 is stated the standard -- standard set price generic 10 A. I don't remember any specifically back in '07 and 11 program, and those were programs where the member didn't 11 '08. I don't remember all my specific discussions at that 12 have to enroll. You went into -- and the -- By far the 12 year. 13 first and the biggest was Wal-Mart's, and when you walked 13 Q. Well, generally, do you recall any of those 14 into a Walmart, everybody you got in there got, that was 14 discussions with anyone? 15 their everyday low price, and that's what they gave 15 A. Not specifically, no. 16 everybody who came to -- and cash customer that came into 16 Q. Was the process -- Well, let me ask you this. 17 the program. We considered the standard set program -- 17 Is the document that is Exhibit 703 -- is this the final 18 that pricing -- the standard set price programs, like the 18 outcome of this process that you've described? 19 Walmart program, we considered that their usual and 19 MS. MAINIGI: Objection. 20 customary. For the club programs, we did not consider 20 A. THE WITNESS: At the time, this was our -- 21 that part of their usual and customary. 21 this is -- this is our position, which has been 22 Q. So this classification that you're referring to 22 consistent. Across time, across pharmacies, this is our 23 in paragraph 14 of your declaration, which has these two 23 position. 24 types of programs, who at Caremark was involved with 24 BY MR. LEVINE: 25 making the classification? 25 Q. Are there -- And was the process itself 106 108 1 A. That was my team, including Brian, myself, Todd 1 documented anywhere? I know this is the end result, but 2 Guinn, our supporting legal staff, and then we had input 2 is the process memorialized anywhere? 3 from other -- from our client-facing management teams. 3 A. Not that I'm -- like, did we set up a -- I'm 4 Q. And when -- when did this class -- when -- when 4 sorry. What did -- what do you mean by that did we set up 5 was this classification? When did it occur? 5 a memorial or something -- 6 A. We developed this after -- really it was after 6 Q. Yeah. Is there -- was there a group -- was there 7 the Walgreens -- the Walgreens program came out, because 7 a group tasked with doing this that had minutes -- that 8 as we had discussions with Walgreens, we had to evaluate 8 prepared minutes, agendas, presentations, or -- or is 9 it because that was really the first club pro- -- plan, 9 there a file someplace that contained -- 10 using our terminology, that came out. So at that point, 10 A. I'm not aware that it was that formal of a 11 we had to evaluate that and make a determination on how we 11 process. 12 were going to move forward. 12 Q. Has Caremark ever conveyed this classification 13 Q. Do you have a more temporal specificity? 2007? 13 that you referred to to CVS in writing? 14 2008? 14 A. I don't remember that specifically. There 15 A. I don't have a specific date, but it was -- be -- 15 were -- We had questions from CVS, and pretty much all 16 you know, it was in -- it was after the Walgreens program 16 the chains that created some program, they would call us 17 came out. 17 and ask about our -- our -- you know, how we evaluate the 18 Q. Did the classification that you settled on 18 program. And so there may be, but I'm not -- I don't -- 19 require the approval of anyone other than you? 19 off of the top of my head, I don't specifically know. 20 A. The -- You know, as I stated, we looked at -- 20 Q. So sitting here today, you're not aware of any? 21 you know, I talked -- I worked with our legal team to 21 A. That's correct. 22 evaluate that based on our contract, and then secondly, I 22 Q. Okay. And sitting here today, are you aware of 23 worked -- we -- you know, worked with our general 23 any writing that conveys this classification to any of 24 management as we do with all types of decisions, worked 24 Caremark's clients? 25 with our -- you know, with our management team. 25 A. The -- there was a lot of questions from a lot of PLANET DEPOS 888.433.3767 | WWW.PLANETDEPOS.COM Transcript of John Martin Lavin 42 (165 to 168) Conducted on January 5, 2017 165 167 1 Q. And would you include that amendment for all the 1 STATE OF ARIZONA) 2 times in your declaration you say "set price generic 2 COUNTY OF MARICOPA) 3 program"? 3 BE IT KNOWN the foregoing deposition was 4 A. Yes. 4 taken by me pursuant to stipulation of counsel; that I was 5 MS. MAINIGI: I have no further questions. 5 then and there a Certified Reporter of the State of 6 6 Arizona, and by virtue thereof authorized to administer an FURTHER EXAMINATION 7 oath; that the witness before testifying was duly sworn by 7 8 me to testify to the whole truth; notice was provided that 8 BY MR. LEVINE: 9 the transcript was available for signature by the 9 Q. The -- Let's go back to Exhibit 707, please. 10 deponent; that the questions propounded by counsel and the 10 You do not appear to be an author or recipient of any of answers of the witness thereto were taken down by me in 11 11 the emails. Is that correct? 12 shorthand and thereafter transcribed into typewriting 12 A. That is correct. 13 under my direction; that the foregoing pages are a full, 13 Q. Have you seen this email before sitting here 14 true, and accurate transcript of all proceedings and 14 today? 15 testimony had and adduced upon the taking of said 15 A. I have seen this email before. 16 deposition, all to the best of my skill and ability. 16 Q. When did you see it last? 17 I FURTHER CERTIFY that I am in no way related to 17 A. I saw it in my preparation -- 18 nor employed by any parties hereto nor am I in any way 18 Q. Prior to -- 19 interested in the outcome hereof. 19 A. -- for my -- 20 DATED at Phoenix, Arizona, this 6th day of 20 Q. Sorry. 21 January, 2017. 21 A. -- for my 30(b) whatever it is. You guys figure 22 22 that out. 23 _______________________________ 23 Q. Okay. Had you seen it in 2010? Meri Coash, RMR, CRR 24 A. I am not -- I -- I don't remember seeing this in 24 Certified Reporter #50327 25 2010. 25 166 1 Q. Okay. So would you agree with me that all of the 2 individuals for whom this was from, to, or cc'd are 3 Caremark employees? 4 A. Yes. 5 Q. All right. So this document never left Caremark? 6 A. This email was an internal email. 7 MR. LEVINE: All right. All right. So 8 we're going to switch hats and -- 9 THE VIDEOGRAPHER: Do you want me to end 10 this one? 11 MR. LEVINE: Well, I don't know. Do we need 12 a separate tape? 13 MS. MAINIGI: I would do a separate tape. 14 MR. LEVINE: Okay. 15 THE VIDEOGRAPHER: This marks the end of the 16 deposition of John Lavin. We are going off the record at 17 2:07 p.m. 18 (The deposition was concluded at 2:07 p.m.) 19 ______________________________ 20 JOHN MARTIN LAVIN 21 22 23 24 25 PLANET DEPOS 888.433.3767 | WWW.PLANETDEPOS.COM