Corcoran et al v. CVS Health Corporation

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

Exhibit E

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5 Exhibit E 5 1 UNITED STATES DISTRICT COURT 2 NORTHERN DISTRICT OF CALIFORNIA -------------------------------------------X 3 CHRISTOPHER CORCORAN, et al., 4 Plaintiffs, 5 -against- 6 CVS PHARMACY, INC., 7 Defendant. 8 Case No.: 3:15-cv-03504-YGR -------------------------------------------X 9 10 101 Park Avenue New York, New York 11 December 12, 2016 12 1:37 p.m. 13 14 DEPOSITION of WILLIAM STREIN, before 15 Sadie L. Herbert, a RPR and Notary Public 16 of the States of New York and New Jersey. 17 18 19 20 21 22 23 24 25 5 Transcript of William Strein Conducted on December 12, 2016 7 1 MS. MAINIGI: Enu Mainigi and 13:38:14 2 Colleen McNamara from Williams & 3 Connolly for the defendants. 4 MR. SITARCHUK: Eric W. Sitarchuk 5 for the witness. 13:38:22 6 THE VIDEOGRAPHER: The court 13:38:22 7 reporter today is Sadie Herbert, also 13:38:24 8 from Planet Depos. Would the court 13:38:25 9 reporter please swear in the witness. 13:38:39 10 13:38:39 11 WILLIAM STREIN, the witness herein, having first 12 been duly sworn, was examined and 13 testified as follows: 14 EXAMINATION 13:38:41 15 BY MR. LEWIS: 13:38:41 16 Q Good afternoon, Mr. Strein. 13:38:42 17 A Good afternoon. 13:38:45 18 Q Am I pronouncing your name correctly? 13:38:46 19 A Strein, yes. 13:38:49 20 Q Strein, thank you. 13:38:50 21 A Mm-hmm, mm-hmm. 22 Q My name is Richard Lewis and I'm a 13:38:51 23 lawyer for the plaintiffs in this case, I'm 13:38:54 24 going to take your deposition this afternoon. 13:38:55 25 Have you ever had your deposition taken 13:38:57 PLANET DEPOS 888.433.3767 | WWW.PLANETDEPOS.COM 5 Transcript of William Strein Conducted on December 12, 2016 110 1 back slowly so I can correct it. 15:37:21 2 (Whereupon, the requested portion 15:37:50 3 was read back by the reporter.) 15:37:51 4 Q Can you answer that? 15:37:51 5 A I can answer the first part, I don't 15:37:52 6 know if anyone did. 15:37:55 7 Q Thank you. 15:37:56 8 MR. SITARCHUK: All right. Let's 15:37:58 9 take a break is. 15:37:58 10 THE VIDEOGRAPHER: All right. The 15:38:00 11 time is now 3:38 p.m. We're off the 15:38:00 12 record. 15:38:03 13 (Whereupon, a short recess was 15:38:04 14 taken at 3:38 p.m.) 15:48:23 15 THE VIDEOGRAPHER: The time is now 15:48:23 16 3:49 p.m. This is the beginning of 15:48:26 17 Disk 3. We're on the record. 15:48:28 18 BY MR. LEWIS: 15:48:30 19 Q Mr. Strein, I want to return to 15:48:31 20 Paragraph 9 and ask you a series of questions 15:48:35 21 about the statement in Paragraph 9 -- 15:48:37 22 A Okay. 15:48:38 23 Q -- at the bottom of Page 2, going on to 15:48:39 24 Page 3, that statement being, "We determined 15:48:42 25 that Medco's definition of U&C in its pharmacy 15:48:44 PLANET DEPOS 888.433.3767 | WWW.PLANETDEPOS.COM 5 Transcript of William Strein Conducted on December 12, 2016 111 1 services manual did not encompass membership 15:48:49 2 program prices." 15:48:52 3 I want to -- so all my questions in 15:48:55 4 this series are about that statement; okay? 15:48:56 5 A Yes. 15:49:01 6 Q All right. Did Medco communicate that 15:49:01 7 determination to any of its clients? 15:49:04 8 A I don't know. 15:49:08 9 Q Do you know who knows? 15:49:09 10 A I can only speculate. 15:49:11 11 Q Did Medco ask any of its clients to 15:49:14 12 communicate that determination to beneficiaries, 15:49:18 13 meaning the workers who went into a pharmacy and 15:49:24 14 paid a copay? 15:49:27 15 A I don't know. 15:49:28 16 Q Who would know? 15:49:29 17 A Again, I'm speculating. 15:49:31 18 Q Did Medco communicate that 15:49:35 19 determination that the U&C in the manual did not 15:49:37 20 encompass membership prices to any official at 15:49:43 21 Medicaid? 15:49:47 22 MS. MAINIGI: Objection. 15:49:52 23 A I don't know. 15:49:53 24 Q Who would know? 15:49:53 25 A I -- I -- I don't know. 15:49:54 PLANET DEPOS 888.433.3767 | WWW.PLANETDEPOS.COM 5 Transcript of William Strein Conducted on December 12, 2016 112 1 Q Did Medco communicate the determination 15:49:59 2 in Paragraph 9, that the U&C in its manual did 15:50:03 3 not encompass membership program prices to 15:50:08 4 anybody at Medicaid in any state? 15:50:11 5 A I don't know. 15:50:13 6 Q Who would know? 15:50:14 7 A I don't know. 15:50:16 8 Q Did Medco communicate the determination 15:50:17 9 in Paragraph 9 that Medco's definition of U&C 15:50:23 10 did not encompass membership program prices to 15:50:27 11 any official at NCPDP? 15:50:32 12 A I don't know. 15:50:36 13 Q Do you know who would know? 15:50:37 14 A No. 15:50:39 15 Q Before making that final determination, 15:50:52 16 did you ask any of your clients if they agreed 15:50:54 17 with your determination that the definition of 15:50:56 18 U&C does not encompass membership program 15:50:59 19 prices? 15:51:03 20 A I don't know. 15:51:04 21 Q Do you know who would know? 15:51:08 22 A Again, I would have to speculate. 15:51:09 23 Q Did Medco ask anybody at Medicare or 15:51:11 24 Medicaid if they agreed with Medco's 15:51:14 25 determination that their definition of U&C did 15:51:17 PLANET DEPOS 888.433.3767 | WWW.PLANETDEPOS.COM 5 Transcript of William Strein Conducted on December 12, 2016 113 1 not encompass membership program prices? 15:51:21 2 MS. MAINIGI: Objection to form. 15:51:23 3 A I don't know. 15:51:31 4 Q And who would know? 15:51:31 5 A My recollection is that the -- these 15:51:33 6 discount card programs -- membership programs 15:51:38 7 were not available to government-sponsored 15:51:42 8 Medicare and Medicaid programs, so I don't know 15:51:45 9 that anybody would have. I'm not certain of 15:51:48 10 that. 15:51:50 11 Q Is it your recollection that they 15:51:50 12 weren't -- that -- when you say the -- I'm 15:51:52 13 sorry, could you -- could you repeat what you 15:51:55 14 said, I'm -- I'm sorry, or I can ask the court 15:51:56 15 reporter to read it, if it's -- if you prefer. 15:52:00 16 A My point was only that Medi- -- a 15:52:02 17 number of programs offered in the marketplace 15:52:04 18 were not available to Medicare or Medicaid 15:52:07 19 beneficiaries. This may or may not have been 15:52:10 20 one of them. 15:52:14 21 Q Right. 15:52:14 22 The reason I'm asking the question 15:52:15 23 isn't to determine if the HSP program was 15:52:17 24 available to people on Medicare. The reason I'm 15:52:20 25 asking the question is because the determination 15:52:24 PLANET DEPOS 888.433.3767 | WWW.PLANETDEPOS.COM 5 Transcript of William Strein Conducted on December 12, 2016 114 1 that you've made about membership prices would 15:52:26 2 impact the U&C reported by a pharmacy, that's 15:52:30 3 why I'm asking the question. 15:52:36 4 A Thank you for that clarification. 15:52:42 5 Q All right. And that's why I asked 15:52:44 6 about all the other entities, whether you -- you 15:52:47 7 sought their agreement with your determination 15:52:51 8 before you made it; okay? 15:52:53 9 A I understand. 15:52:55 10 Q Now, could a member of the public go on 15:52:56 11 the Internet and find Medco's definition of U&C 15:53:05 12 from late 2009 to 2012 as expressed in 15:53:11 13 Paragraph 13? 15:53:15 14 A I don't know. I do know some of the 15:53:16 15 pharmacy services manuals ended up in -- on the 15:53:21 16 Internet. 15:53:25 17 Q Did Medco make any effort to post on 15:53:25 18 the Internet for members of the public to see 15:53:30 19 their determination that their definition of U&C 15:53:34 20 did not encompass membership program prices? 15:53:38 21 A I don't know. 15:53:42 22 Q Who would know? 15:53:43 23 A Again, I don't know. 15:53:44 24 Q Now, I believe we established earlier 15:53:45 25 that one of the factors you considered in making 15:54:01 PLANET DEPOS 888.433.3767 | WWW.PLANETDEPOS.COM 5 Transcript of William Strein Conducted on December 12, 2016 115 1 this determination was whether or not there was 15:54:04 2 a membership fee associated with joining a 15:54:06 3 membership program; is that correct? 15:54:10 4 A Yes. 15:54:12 5 Q And how did you find out if there was a 15:54:14 6 membership fee associated with joining the CVS 15:54:23 7 HSP program? 15:54:25 8 A I don't recall specifically for that 15:54:32 9 one. I know that others were brought to our 15:54:33 10 attention by somebody clipping out of a 15:54:36 11 newspaper, audit or somebody and saying, hey, 15:54:39 12 there's this program out in the marketplace. So 15:54:41 13 it was publicly available data. 15:54:44 14 Q All right. But it wasn't publicly 15:54:50 15 available to find out if it was routinely 15:54:53 16 enforced, was it? 15:54:56 17 MS. MAINIGI: Objection. 15:54:56 18 MR. SITARCHUK: Objection. 15:54:57 19 A I don't know that. 15:54:57 20 Q Well, how did Medco find out if CVS 15:54:58 21 routinely enforced the membership fee? 15:55:02 22 A I don't know that. 15:55:04 23 Q Would -- would it be important if they 15:55:05 24 enforced it? 15:55:08 25 MS. MAINIGI: Objection. 15:55:09 PLANET DEPOS 888.433.3767 | WWW.PLANETDEPOS.COM 5 Transcript of William Strein Conducted on December 12, 2016 116 1 A In any contract we have with a 15:55:10 2 pharmacy, consistency is important, yes. 15:55:16 3 Q Well, you say in Paragraph 11 that 15:55:19 4 enforcement was one of the factors you 15:55:22 5 considered in determining that Medco's 15:55:24 6 definition of U&C did not encompass membership 15:55:28 7 program prices; correct? 15:55:32 8 A I -- it -- it is true that I said this, 15:55:34 9 yes. 15:55:44 10 Q Right. 15:55:44 11 And how did Medco know if they 15:55:45 12 routinely waived it or not? 15:55:49 13 A Well, there are -- there is no absolute 15:55:51 14 way to know that. 15:55:55 15 Q How did they know anything at all about 15:55:56 16 it? 15:55:59 17 A Well, we have relationships with these 15:55:59 18 business entities, they knew we had audit 15:56:01 19 departments, they knew that there were checks 15:56:04 20 and balances in the system and they -- I don't 15:56:06 21 know that this is a fact, but sometimes they 15:56:09 22 tell us they're doing -- a pharmacy might tell 15:56:12 23 Medco they're doing something, and we believe 15:56:14 24 that they are. 15:56:17 25 Q So your understanding that CVS was 15:56:17 PLANET DEPOS 888.433.3767 | WWW.PLANETDEPOS.COM 5 Transcript of William Strein Conducted on December 12, 2016 128 1 Q GM, I'm sorry. 16:09:26 2 A Well, G- -- GM's copay, just for the 16:09:27 3 record, were about 1 and $2. 16:09:30 4 Q Okay. 5 A So the -- the U&C factor hardly ever 16:09:32 6 came into play. 16:09:35 7 Q All right. Let me withdraw the 16:09:37 8 question, then. 16:09:38 9 Did Medco make any effort to calculate 16:09:39 10 the amount -- the -- the financial impact on the 16:09:43 11 beneficiaries who have to pay copays of the 16:09:50 12 decision in Paragraph 9 not to treat membership 16:09:54 13 program prices as U&C? 16:09:57 14 MS. MAINIGI: Objection. 16:09:59 15 A Not -- no, not to the best of my 16:09:59 16 knowledge. 16:10:02 17 Q Did they make a determination that it 16:10:02 18 would have driven the cost to those persons, the 16:10:05 19 beneficiaries, who pay copays, up or down? 16:10:08 20 MS. MAINIGI: Objection. 16:10:11 21 MR. SITARCHUK: Objection. 16:10:12 22 A I don't believe they did, in the scope 16:10:12 23 of the total benefit package. 16:10:15 24 Q During the years that you were vice 16:10:17 25 president, 2008 through 2012, how did Medco 16:10:33 PLANET DEPOS 888.433.3767 | WWW.PLANETDEPOS.COM 5 Transcript of William Strein Conducted on December 12, 2016 129 1 determine if CVS was reporting honest U&C 16:10:37 2 prices? 16:10:41 3 MS. MAINIGI: Objection. 16:10:42 4 MR. SITARCHUK: Objection. 16:10:42 5 A No differently than we did with any 16:10:43 6 other pharmacy and I don't know the answer, I'm 16:10:47 7 not in audit. 16:10:51 8 Q Who -- who would know the answer? 16:10:52 9 A Potentially those in audit, I don't 16:10:54 10 know that. 16:10:57 11 Q Would -- would one have to obtain the 16:10:57 12 data showing CVS's cash prices in order to 16:11:03 13 figure out if they're reporting an honest U&C? 16:11:07 14 MS. MAINIGI: Objection. 16:11:11 15 A I presume they'd have to make some 16:11:14 16 comparisons with what's publicly available in 16:11:16 17 the marketplace. 16:11:19 18 Q And did Medco request the cash data 16:11:20 19 prices from CVS during that four-year period you 16:11:23 20 were vice president? 16:11:26 21 MR. SITARCHUK: Objection. 16:11:27 22 A I -- I do not know that. 16:11:27 23 Q Did Medco request from CVS during that 16:11:29 24 four-year period what they were charging -- the 16:11:33 25 data proving what they were charging the HSP 16:11:35 PLANET DEPOS 888.433.3767 | WWW.PLANETDEPOS.COM 5 Transcript of William Strein Conducted on December 12, 2016 130 1 customers? 16:11:39 2 MR. SITARCHUK: Objection. 16:11:41 3 A I don't know that. 16:11:41 4 Q Did CVS ever make a commitment to Medco 16:11:52 5 that they collected the membership fee 16:11:55 6 routinely, every year for those persons that 16:12:05 7 they allowed to participate in the HSP program? 16:12:08 8 A I don't know. 16:12:12 9 Q Did they ever report to you -- did CVS 16:12:13 10 ever report to Medco that -- that the HSP 16:12:20 11 prices -- that the persons outside of the HSP 16:12:28 12 program were getting HSP prices such as 11.99 16:12:31 13 for 90 days? 16:12:39 14 MS. MAINIGI: Objection. 16:12:40 15 A Can you clarify -- repeat the question. 16:12:40 16 Q Sorry. 16:12:43 17 Did CVS ever report to Medco, when you 16:12:43 18 were vice president, that persons outside of the 16:12:46 19 HSP program, the cash customers, were getting 16:12:51 20 the 11.99 per 90-day price? 16:12:53 21 A Not that I know of. 16:12:59 22 Q Do you believe Medco has any 16:13:19 23 responsibility to the beneficiaries of your 16:13:22 24 clients' plans to make sure that CVS is 16:13:24 25 reporting honest U&C prices? 16:13:28 PLANET DEPOS 888.433.3767 | WWW.PLANETDEPOS.COM 5 Transcript of William Strein Conducted on December 12, 2016 131 1 MR. SITARCHUK: Objection. 16:13:31 2 MS. MAINIGI: Join. 16:13:32 3 A Do I believe that Medco had -- 16:13:32 4 Q When you were vice president, from 2008 16:13:39 5 to 2012. 16:13:42 6 A Any -- 16:13:43 7 Q Any responsibility to the beneficiaries 16:13:44 8 of your clients' plans, any responsibility to 16:13:47 9 find out if CVS was reporting honest U&C prices? 16:13:51 10 MR. SITARCHUK: Objection. 16:13:56 11 MS. MAINIGI: Join. 16:13:57 12 A Are you asking Bill Strein, what do I 16:13:58 13 believe? 16:14:05 14 Q Yes. 16:14:05 15 A I believe we had a responsibility to 16:14:06 16 ensure that the pharmacies as a whole were 16:14:08 17 abiding by the contracts, on all aspects, not 16:14:10 18 just this. 16:14:14 19 Q And specifically for CVS and their U&C 16:14:16 20 prices, what did Medco do to verify CVS was 16:14:20 21 reporting accurate U&C prices? 16:14:26 22 A I don't know what we did specifically. 16:14:29 23 MR. LEWIS: Okay. If you could 16:14:47 24 mark that as 664. 16:14:48 25 (Exhibit 664, Email, Bates Stamped 16:14:50 PLANET DEPOS 888.433.3767 | WWW.PLANETDEPOS.COM 5 Transcript of William Strein Conducted on December 12, 2016 165 1 2 STATE OF NEW YORK) 3) ss: 4 COUNTY OF NEW YORK) 5 6 I, SADIE L. HERBERT, a Registered 7 Professional Reporter and Notary Public, do 8 hereby certify: 9 That WILLIAM STREIN the witness 10 whose deposition is hereinbefore set forth, was 11 duly sworn by me and that such deposition is a 12 true record of the testimony given by such 13 witness. 14 No witness read and sign was 15 requested. 16 I further certify that I am not 17 related to any of the parties to this action by 18 blood or marriage; and that I am in no way 19 interested in the outcome of this matter. 20 IN WITNESS WHEREOF, I have hereunto 21 set my hand this 20th day of December 2016. 22 23 __________________________________ 24 SADIE L. HERBERT PLANET DEPOS 888.433.3767 | WWW.PLANETDEPOS.COM