CVS to Pay $77.6 Million to Settle Charges of Selling Meth Ingredient to Criminals

CVS Caremark (CVS) has agreed to pay $77.6 million in fines to settle charges that it illegally sold a chemical, common in some cold and cough medicines, that ended up being used to make methamphetamine.

The U.S. Drug Enforcement Administration said Wednesday that the pharmacy chain failed to appropriately monitor the sale of cold medicines containing pseudoephedrine at its stores in California and Nevada, in some cases allowing customers to buy all of the cold medicines in stock. Between September 2007 and November 2008, CVS supplied pseudoephedrine to drug traffickers in Southern California, leading directly to an increase in meth production in the state, according to the DEA.

"CVS's flagrant violation of the law resulted in the company becoming a direct link in the methamphetamine supply chain," said Michele M. Leonhart, acting administrator of the DEA, in the statement. "DEA will continue to work with its state and local counterparts to disrupt the supply of methamphetamine."

In addition to California and Nevada, CVS likely exceeded federally regulated sales limits of pseudoephedrine in 23 other states, the DEA said. In return for paying the settlement, CVS won't be charged with criminal activity by the DEA.

The settlement includes $75 million in civil penalties, the largest amount ever triggered by the U.S. Controlled Substances Act, as well the forfeiture of $2.6 million in profits from the sales of cold medicines. As part of the agreement, CVS also admitted to unlawfully selling pseudoephedrine to criminals, according to the DEA.

"While this lapse occurred in 2007 and 2008 and has been addressed, it was an unacceptable breach of the company's policies and was totally inconsistent with our values," CVS CEO Thomas M. Ryan said in a separate statement Wednesday. "CVS pharmacy is unwavering in its support of the measures taken by the federal government and the states to prevent drug abuse."

CVS shares fell 1.25% to close at $31.25 on Wednesday. In July, the company posted a second-quarter net income of $821 million, down 7.3% from the same quarter a year earlier, on revenue that had declined 3.5% to $24 billion.

Increase your money and finance knowledge from home

Understanding Stock Market Indexes

What does it mean when people say "the market is up 2%"?

View Course »

Goal Setting

Want to succeed? Then you need goals!

View Course »

Add a Comment

*0 / 3000 Character Maximum


Filter by:

Meantime in NJ I have to show ID to buy even one box of Advil Cold & Sinus caplets. I would think that one box hardly qualifies me as a threat but with the threat of $77M in fines I guess the companies do whatever they have to. Typical gov't though- close the barn door long after the cow has gotten away.

October 16 2010 at 1:03 AM Report abuse rate up rate down Reply

Actually, the CSA was not repealed in 2009... I was being sarcastic.

October 15 2010 at 12:29 PM Report abuse rate up rate down Reply

When someone is fined 77.8 million dollars , who gets the money ? it is not owed for any services or anything ,does it go to charity ? or is this another scam in the long list to legally rob people

October 15 2010 at 10:45 AM Report abuse +4 rate up rate down Reply

Went to the drugstore a few weeks ago to get tincture of iodine. Best thing for small cuts and hangnails. No longer on the shelf. It's used to produce illegal compounds. The replacement has AMMONIA as a denaturing ingredient. Had to throw it out.

October 15 2010 at 8:59 AM Report abuse +1 rate up rate down Reply
1 reply to groundspeed's comment

Criminals rule the system now in all venues. Know about the iodine - it has been off the market a few years.

October 15 2010 at 12:49 PM Report abuse rate up rate down Reply

I disagree with this decision. The FDA needs to declare pseudoephedrine available by prescription only, or monitor over-the-counter sales of the drugs themselves, rather than make individual retailers responsible for DEA information like keeping up with who is buying cold medicine and what they may, or may not, be doing with it. Retail giants could easily track the sales of cold medicines and simply send in a computerized list of buyers on a quarterly basis. This is legal under the HIPPA law, but I'm not entirely sure it is legal for a retailer to be spying and making records of client practices without their permission or knowledge.

October 15 2010 at 8:33 AM Report abuse +1 rate up rate down Reply

How utterly ridiculous.. the government actually believes that restricting the sale of this stuff in the pharmacy is going to stop them from making meth? All they've done is make it harder for me, the normal citizen, to buy this stuff for the several plants at the company I work for. I now have to go to the pharmacy 4-5 times to stock the plants first aid kits. What a waste of my time.

October 15 2010 at 8:25 AM Report abuse +3 rate up rate down Reply

stop busting CVS, go after the meth labs. why must we suffer because the DEA cant get a grip on ther job. How about dont sell cars because bank robbers use them to get away. This country puts to mant restrictions on shops such as CVS it will cost us all more when there fined.When will we put the blame on the real problems, those who have meht labs, simple basic thing, dont ya think. Whats so god dam hard about finding whos using this for there labs? if a person comes in every other day and is buyiny this crap off the shelf would that raise a flag? I would think so. Or now they need to ask for it behind the counter would that raise a flag? Then you call your locals, they will come out and hang to see if this person may be a problem user, them you as a human did more than your job, you did what was right. But today we are all out for number one. and the fact is many who work at cvs are not really from the americans culture so what do they care, they just want to make money.

October 15 2010 at 8:16 AM Report abuse +4 rate up rate down Reply
1 reply to cvdunbar's comment

Why do you expect the government agency to fix all the problems? It starts with accountability and we the people are the first line of defense. The truly best way to resolve the drug issues is to start executing drug dealers, which are users too, and send a message. I guarentee 1-2 years of that policy will have the country changed.

October 15 2010 at 8:27 AM Report abuse -1 rate up rate down Reply

Oops, looks like the CEO will have to close down a couple stores to retore faith with investors, ultimately affect 50+ employees instead of taking a pay cut on his side.

October 15 2010 at 7:59 AM Report abuse +1 rate up rate down Reply


October 15 2010 at 2:01 AM Report abuse rate up rate down Reply
1 reply to judyjudypageox's comment

can someone tell me that in the last 30 years that all this meth has hit this country what has been the problem oh yea the gov. wasnt getting paid but did you have people out killing people at 2am when the bars close down i dont think so and it was legal from the 60s and earlier and was used in all kinds of stuff you use but not today everyone wants to tell you what is right for you why dont you stick your head up your own ass and leave me alone to make my own choices in my life i am not at your door telling you when to cut your grass or how to raise your kids but this socitey that we have let run our choices has gone to far but it was just fine when the olie north was bringing coke back to L.A. to cleanse the street of black people for using the coke our gov put on the street for the purpose of getting rid of the blacks and now what have you got to stand on that you can say that this drug has done to the people that use it that has been so bad now i agree that it does affect some people in a bad way but all drugs do this and that is your descision to know if you can handle the drug you are taking and if not then find another one have a good day out there and dont forget to sign up for the next thing that is taken away from you

October 15 2010 at 10:24 AM Report abuse rate up rate down Reply