CVS to Pay Largest Ever Civil Penalty Under Controlled Substances Act

$77.6 million to be paid after retail pharmacy admits to unlawfully selling pseudoephedrine to criminals

( LOS ANGELES) - In an agreement finalized late yesterday, CVS Pharmacy, Inc., the biggest operator of retail pharmacies in the United States, has admitted that it unlawfully sold pseudoephedrine to criminals who made methamphetamine. As part of the agreement with federal prosecutors, CVS has agreed to pay $75 million in civil penalties and to forfeit the $2.6 million in profits the company earned as a result of the illegal conduct.

CVS Pharmacy, a subsidiary of CVS Caremark Corporation, failed to ensure compliance with laws limiting sales of pseudoephedrine, which allowed criminals to obtain a key ingredient used in the manufacture of methamphetamine from CVS stores located primarily in Los Angeles County; Orange County, California; and Clark County, Nevada. 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. CVS eventually changed its sales practices to prevent these illegal sales, but it did so only after it became aware of the government’s investigation.

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

“This historic settlement underscores DEA’s commitment to protect the public’s health and safety against the scourge of methamphetamine,” said Michele M. Leonhart, the Acting Administrator of the Drug Enforcement Administration. “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.”