CVS Pharmacy Inc. has agreed to pay $75 million in fines for allowing repeated purchases of a key ingredient in the making of methamphetamine in at least five states. The nation’s largest operator of retail pharmacies will pay what is believed to be the largest civil penalty under the Controlled Substances Act. The company also will forfeit about $2.6 million in profits earned from the sales of pseudoephedrine, which can often be found in cold medicine and is used to make meth.
CVS didn’t provide enough safeguards to monitor how much pseudoephedrine someone was buying. The company violated federal drug regulations in Arizona, Georgia, California, Nevada, and South Carolina and possibly 20 other states. U.S. Attorney Andre Birotte Jr. observed:
This case shows what happens when companies fail to follow their ethical and legal responsibilities. CVS knew it had a duty to prevent methamphetamine trafficking, but it failed to take steps to control the sale of a regulated drug used by methamphetamine cooks as an essential ingredient for their poisonous stew.
The company paid the $75 million fine last month. The remaining forfeiture is due within 30 days. Thomas Ryan, chairman and CEO of parent company CVS Caremark, admitted that the company unacceptably breached its policies, but has worked to fix the problem. Ryan said CVS will make certain this kind of lapse never takes place again. He says the company has strengthened its internal controls and compliance measures. This will require improving handling and monitoring of CVS’ pseudoephedrine by implementing enhanced technology and making other improvements in the stores and distribution centers.
Federal agents began investigating CVS in 2008 after the arrest of several people in Southern California for unlawful possession of pseudoephedrine with the intent to manufacture meth. They said those people had bought large amounts of the ingredient from CVS stores in the region. Investigators learned CVS had committed thousands of violations of a federal law limiting the amount of pseudoephedrine a customer can buy in a day. Although the pharmacy chain created an automated system to record individual sales, it didn’t prevent multiple purchases by someone on the same day. In some locations, it was reported that buyers would clear entire store shelves of cough and cold medicines and that alone would make anybody realize what was going on.
The company did eventually change its sales practices but only after it became aware of the investigation, according to prosecutors. By agreeing to pay the fine, CVS will not face potential criminal charges and the company will implement a compliance and ethics program over the next three years. CVS has more than 7,100 stores in the U.S.
Source: CBS News
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