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CVS Fined $75M in Meth Case Settlement

John Commins, for HealthLeaders Media, October 15, 2010

CVS Pharmacy, Inc. will pay a record $75 million in civil penalties after admitting that it sold pseudoephedrine, a key ingredient in the production of methamphetamine, to criminals in 25 states.

As part of the agreement with federal prosecutors, the nation's largest retail pharmacy chain has also agreed to forfeit $2.6 million in profits the company earned from the illegal sales.

The $75 million portion of the settlement represents the largest civil penalty ever paid under the Controlled Substances Act.

"This historic settlement underscores Drug Enforcement Administration's commitment to protect the public's health and safety against the scourge of methamphetamine," said Michele M. Leonhart, DEA acting administrator. "CVS's flagrant violation of the law resulted in the company becoming a direct link in the methamphetamine supply chain.
DEA will continue to work with its state and local counterparts to disrupt the supply of methamphetamine, including inhibiting access to chemicals, such as pseudoephedrine, used to produce methamphetamine."

The U.S. Attorneys Office in Los Angeles, CA, which led the investigation, said the sales occurred in CVS stores located primarily in Los Angeles County; Orange County, CA; and Clark County, NV.

Between September 2007 and November 2008, prosecutors said, 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.

CVS, a subsidiary of Woonsocket, RI-based CVS Caremark Corp., eventually changed its sales practices, but only after it became aware of the government's investigation.
"This case shows what happens when companies fail to follow their ethical and legal responsibilities," said U.S. Attorney André Birotte Jr.

"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," Birotte said.

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