CVS to Pay Penalty in Methamphetamine Case
By REUTERS

CVS Caremark has agreed to pay $77.6 million to settle an investigation that its drugstores allowed widespread sales of cough medicines used to manufacture the stimulant methamphetamine.

CVS Pharmacy, a subsidiary, acknowledged that it had sold pseudoephedrine to criminals who used it to make meth, the United States attorney in Los Angeles said Thursday. The chemical is used in various cough and cold medicines.

Methamphetamine has become relatively cheap and widely available in the United States. Mexican drug cartels illegally import much of it into the United States, but many sellers also make meth at home.

In 2007, Los Angeles County pharmacies experienced an epidemic of “smurfing” in which individuals made several purchases of small amounts of over-the-counter medicine containing pseudoephedrine, which was then turned into methamphetamine, the government said.

At the same time, CVS began a system that failed to prevent multiple purchases by an individual customer on a single day, prosecutors said, and buyers soon inundated CVS stores in California and Nevada.

CVS eventually changed its practices to prevent the sales after it became aware of the investigation, the government said.

In a statement, CVS called the sales an “unacceptable breach” of company policy and “totally inconsistent with our values.”

CVS agreed to pay a $75 million civil penalty and forfeit $2.6 million in profit.

The government said it would not pursue criminal charges against CVS. The company will start a compliance and ethics program.