Independent pharmacies, feeling the effects of a more powerful CVS Caremark Corp. (CVS), are asking the U.S. government for help, two years after the predecessor drugstore and pharmacy benefits manager companies merged.

While the merger may not have had the expected impact on larger players in the drugstore and PBM industries, it has hurt some small, locally owned pharmacies finding it tougher to compete against the hybrid company.

As a result, the trade group National Community Pharmacists Association wants the Federal Trade Commission to reopen the CVS Caremark merger in order to address what the group considers anticompetitive behavior, such as using private patient information to steer Caremark benefit-plan members to CVS stores.

CVS Caremark, which operates 6,900 drug stores and is the nation's second-largest pharmacy benefits manager, denies wrongdoing and calls the suggestions of data misuse "unsubstantiated and unfounded."

Government action likely would depend primarily on whether the consumer is the one hurt rather than competitors.

"The antitrust laws really are not there to protect competitors, and in fact every time a competitor complains it's looked at with suspicion," said Joseph J. Simons, former director of the FTC's competition bureau.

If the merger caused consumer prices to rise, however, that would raise a legitimate question, he added. The FTC doesn't mind a reduction in consumer choice as long as the customer receives a lower price, according to Simons, now a partner at Paul, Weiss, Rifkind, Wharton & Garrison LLP.

The FTC can reopen completed mergers, impose civil penalties and require companies to remedy any anticompetitive problems. Divestitures are possible, although highly unlikely in this case. FTC spokesman Mitchell Katz, not commenting on CVS Caremark, noted the agency has a division devoted to making sure mergers comply with the law, and conducts retrospectives to see whether mergers reduced competition.

The NCPA is trying to arrange a meeting with the new FTC chairman, Jon Leibowitz.

"We believe that if they were to investigate, that all the issues would come to light and would lead them to reopening the merger," NCPA General Counsel Joanne Thelmo said.

The group, in comments last month to the FTC, raised "serious concerns that CVS is using confidential private information about consumers secured from Caremark to attempt to drive consumers to CVS stores," in violation of the "firewall commitment CVS has made to consumers and other pharmacies."

Similarly, the California Pharmacists Association last month told the FTC about "unfair and anticompetitive business practices" by CVS Caremark. The group said patients report that CVS contacted their doctors without their knowledge to solicit prescriptions for maintenance medications.

CVS Caremark denies inappropriate conduct and says the company complies with privacy standards and laws. "CVS Caremark places the highest priority on maintaining our customers' privacy," company spokeswoman Carolyn Castel told Dow Jones Newswires.

Employers choose plan designs and decide whether members may buy chronic medications at any pharmacy in the drug plan's network or only through mail. CVS Caremark members with "mandatory mail" plans can buy the same 90-day supply for the lower mail-order copayment at CVS stores.

Drug delivery through pharmacy and mail is not something most local pharmacies can offer and was an issue when the Los Angeles Unified School District switched its PBM contract to CVS Caremark this year.

Richard Kane, owner of an Encino, Calif., pharmacy, said he started hearing from several customers that their employer's new drug plan requires them to buy maintenance medications either at a CVS drugstore or through Caremark's mail-order pharmacy.

Following that, Kane arranged a protest, and most of his 50 affected customers signed a "freedom of choice" letter that he faxed to the school district.

For its part, the district said it is saving up to $15 million over three years by using CVS Caremark for the 100,000 members under its plan, said George Tischler, the district's chief risk officer. He added that members are saving money and "have a great prescription drug plan," and noted that the district's health benefits committee, which includes unions, recommended the CVS Caremark bid.

-By Dinah Wisenberg Brin, Dow Jones Newswires; 215-656-8285; dinah.brin@dowjones.com