CVS Pharmacy fined $75 million for being key meth lab supplier

Wednesday, February 6th, 2013 By

smoking methamphetamine, perhaps derived from CVS products

Methamphetamine users in the U.S. had CVS Pharmacy to thank for allowing sales of the raw materials supporting their habit. Image: CC Bien Stephanson/Flickr

CVS Pharmacy Inc., the nation’s largest drug store chain, was fined $75 million dollars by the federal government for failing to control its sales of cold medicines that can be used to make methamphetamine. Prosecutors said that CVS became the largest supplier of meth lab ingredients in Southern California. CVS was accused of violating the Controlled Substances Act but made a deal to pay the fine instead of admitting wrongdoing.

CVS fuels methamphetamine trade

CVS Pharmacy Inc. paid $75 million — a record fine for this type of case — to close a  federal investigation of the company that became a key link in the nation’s methamphetamine supply chain. The company will also forfeit about $2.6 million in sales of pseudoephedrine products. The Los Angeles Times reports that the government accused CVS of ignoring safeguards intended to limit the sales of medicines containing pseudoephedrine, the main ingredient of methamphetamine. Prosecutors said the company’s lack of oversight fueled the methamphetamine trade in California, Nevada and several other states. Authorities documented thousands of violations of the Combat Methamphetamine Epidemic Act of 2005, which limits the amount of pseudoephedrine a customer can buy in one day.

Smurfers swamp CVS locations

Federal agents began investigating CVS in 2008 after pseudoephedrine seized at several Southern California meth labs was traced to the pharmacy chain. ABC News reports that CVS created an automated system called Meth Tracker to track individual sales, but it didn’t stop multiple same-day purchases. Around Los Angeles, buyers called “smurfers” would hit CVS locations and clear the shelves of cough and cold medicines. Prosecutors said that in Los Angeles County over a 10-month period in 2008, sales of pseudoephedrine products such as Contac, Sudafed, Dimetapp and Chlor-Trimeton jumped more than 150 percent over the same period in 2007.

Feds inspire CVS to change its ways

CVS employees alerted management about crowds of smurfers overrunning CVS locations all over California and Nevada. Prosecutors said the CVS didn’t change its sales practices until it felt the heat of a government investigation. MarketWatch reports that CVS, which had sales of about $99 billion and a profit of $3.7 billion last year, blamed the problem on an inadequate electronic monitoring system. Going forward, CVS CEO Thomas Ryan said the company has made “substantial investments” in enhanced technology that monitors the handling and sales of pseudoephedrine products.

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