Friday, December 10, 2010

CVS Pays $77.6 million in Fines and $2.6 million in penalty fees

CVS Pharmacy, Inc., has reached an agreement with federal prosecutors and will admit to unlawful sales of pseudoephedrine to criminals who made methamphetamine, according to a DEA news release. CVS will pay $75 million in civil penalties—the largest penalty ever paid under the Controlled Substances Act—and forfeit the $2.6 million in profits earned as a result of those drug sales.

DEA reported that CVS Pharmacy, a subsidiary of CVS Caremark Corporation, failed to ensure compliance with laws limiting pseudoephedrine sales, allowing criminals to obtain this ingredient used in the manufacture of methamphetamine. DEA alleged that between September 2007 and November 2008, CVS “supplied large amounts of pseudoephedrine to methamphetamine traffickers in southern California, and the company’s illegal sales led directly to an increase in methamphetamine production in California.”

According to DEA reports, the stores selling pseudoephedrine illegally were located primarily in Los Angeles County and Orange County, CA, and Clark County, NV. While CVS eventually changed practices to prevent these illegal sales, DEA alleged that “it did so only after it became aware of the government’s investigation.”

The Combat Methamphetamine Epidemic Act of 2005 limited the amount of pseudoephedrine a customer can purchase in one day. In 2007, CVS implemented an automated electronic logbook to record sales of the drug, but the system did not prevent multiple purchases by a single customer on the same day, according to DEA. This allowed customers to make repeated purchases of pseudoephedrine that exceeded federal daily and monthly sales limits, the agency reported.

As part of the agreement, the government will not pursue criminal charges against CVS. CVS will accept responsibility for the illegal conduct and implement a compliance and ethics program over the next 3 years. The company also entered into a separate 5-year compliance agreement with DEA. The settlement addresses CVS’s liability in 25 states, including California and Nevada, where CVS failed to implement appropriate safeguards.

APHA Link:

DEA News release:

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