Health and Medicare fraud In the late 1980s and early 1990s, Caremark RX was involved in a number of health fraud and
Medicare fraud scandals. The combined price to settle this dispute with the U.S. Government cost the company over $250million.
Elensys In 1998,
The Washington Post reported that CVS Corporation appeared to be sharing
prescription drug information with the
Woburn, Massachusetts, based marketing company, Elensys. According to the
Post, Elensys received information on specific prescription drugs that individual CVS customers had purchased and used this information to send targeted direct mailings urging customers to renew prescriptions and promoting other products in which they might be interested. CVS and Elensys argued that there were no privacy issues because Elensys was acting solely as a
contractor to CVS, and because the purpose of the mailings was to educate consumers. CVS claimed that it never shared customers'
medical histories with Elensys (despite
The Washington Post's indirect evidence that they had). George D. Lundberg, editor of the
Journal of the American Medical Association, called the practice "a gross invasion" of
privacy. Following a firestorm of criticism and complaints by consumers, CVS discontinued the relationship with Elensys, and moved the practice in-house.
Trio Drugs Lawsuit On August 22, 2001, CVS Corp was sued for purchasing Trio Drugs' confidential records.
Boston prescriptions During 2005, a series of prescription mistakes came to light in some of CVS Corporation's
Boston-area stores. An investigation confirmed 62 errors or quality problems going back to 2002. In February 2006, the state Board of Pharmacy announced that the non-profit Institute for Safe Medication Practices (ISMP) would monitor all Massachusetts stores for the next two years.
Restatements On November 15, 1999, CVS announced a restatement of its financial results for 1997, and 1998, following a Securities and Exchange Commission review of acquisition-related charges. On February 25, 2005, CVS said it was reducing its previously announced fourth-quarter earnings by $40.5million, to reflect the way it accounted for leased properties in its results.
Pharmaceutical kickbacks In 2005, Caremark Rx paid $137.5million to settle federal lawsuits filed by
whistleblowers that accused a company it acquired in 2003, of improper dealings with pharmaceutical manufacturers. The lawsuits said that the acquired company,
AdvancePCS, accepted kickbacks from drug makers to promote their products over those of rivals under contracts with government programs including the Federal Employees Health Benefit Program, the Mail Handlers Health Benefit Program and Medicare health maintenance plans. There was no admission of wrongdoing by Caremark or AdvancePCS.
Deceptive business practices In February 2008, CVS settled a large civil lawsuit for deceptive business practices. The
Kaiser Family Foundation reported: CVS has agreed to a $38.5million settlement in a multi-state civil deceptive-practices lawsuit against pharmacy benefit manager Caremark filed by 28 attorneys general, the
Chicago Tribune reports. The attorneys general, led by Lisa Madigan (D) of Illinois and Douglas Ganslar (D) of Maryland, allege that Caremark "engaged in deceptive business practices" by informing physicians that patients or health plans could save money if patients were switched to certain brand-name prescription drugs (Miller,
Chicago Tribune, 2/14). Pennsylvania Attorney General Tom Corbett (R) said the Pharmacy Benefit Manager (PBM), kept discounts and rebates that should have been passed on to employers and patients (Levy,
AP/San Francisco Chronicle, 2/14). In addition, Caremark did not "adequately inform doctors" of the full financial effect of the switch and did not disclose that the switch would increase Caremark's profits, the lawsuit alleges (
Chicago Tribune, 2/14).
Rhode Island Senate corruption case In 2008, two former CVS executives, John R. "Jack" Kramer and Carlos Ortiz, were charged with 20 counts of mail fraud, bribery and conspiracy in relation to Operation Dollar Bill, a probe of corruption in the Rhode Island General Assembly. Kramer and Ortiz hired former state senator John Celona, who currently is serving years on corruption charges involving CVS and other companies, as a media consultant for $12,000 a year. Celona was known for walking out on a pharmacy choice vote in the state senate while on the CVS payroll. Despite originally claiming CVS never bought any favors in his own trial, he testified against Kramer and Ortiz as the prosecution's star witness. On May 31, 2008, Kramer and Ortiz were acquitted on all counts. One juror went on the record as saying "My perception living in Rhode Island all my life is, 'Yeah, this probably did go on', but I didn't see any proof beyond a reasonable doubt that CVS did this."
FTC charges of privacy violations On February 18, 2009, CVS Caremark agreed to settle
Federal Trade Commission charges that it failed to take reasonable and appropriate security measures to protect the sensitive financial and medical information of its customers and employees, in violation of federal law. In a separate but related agreement, the company's pharmacy chain also has agreed to pay $2.25million to resolve Department of Health and Human Services allegations that it violated the
Health Insurance Portability and Accountability Act (HIPAA).
Business practices under investigation On May 4, 2010, CVS Caremark Corp. announced that its business practices were being investigated by a group of 24 states, along with the District of Columbia and Los Angeles County. At issue is the post-merger relationship between CVS and Caremark. In addition, the company had earlier acknowledged in a filing with the Securities and Exchange Commission (SEC) that it had received a subpoena from the Office of Inspector General of the United States Department of Health and Human Services, requiring the company to provide information regarding the incentives the company provides to customers who transfer their prescriptions to CVS, including gift cards, goods and other incentives.
DEA investigation into oxycodone diversion According to the U.S. Justice Department, in 2011, CVS pharmacies in Sanford, Florida, ordered enough painkillers to supply a population eight times its size. Sanford has a population of 53,000 but the supply would support 400,000. According to the
Drug Enforcement Administration, in 2010, a single CVS pharmacy in Sanford ordered 1.8million Oxycodone pills, an average of 137,994 pills a month. Other pharmacy customers in Florida averaged 5,364 oxycodone pills a month. DEA investigators serving a warrant to a CVS pharmacy in Sanford on October 18, 2011, noted that "approximately every third car that came through the drive-thru lane had prescriptions for oxycodone or hydrocodone". According to the DEA, a pharmacist at that location stated to investigators that "her customers often requested certain brands of oxycodone using street slang", an indicator that the drugs were being diverted and not used for legitimate pain management. In response, CVS in a statement issued February 17 in response to opioid trafficking questions from
USA Today said the company is committed to working with the DEA and had taken "significant actions to ensure appropriate dispensing of painkillers in Florida".
FTC charges of deceptive pricing On January 12, 2012, CVS Caremark paid $5million to settle Federal Trade Commission charges that it misrepresented the prices of certain Medicare Part D prescription drugs – including drugs used to treat breast cancer symptoms and epilepsy – at CVS and
Walgreens pharmacies.
Co-responsibility for opioid crisis In September 2016, Massachusetts Attorney General
Maura Healey announced a $795,000 settlement where CVS agrees to check a state database before filling the prescription for addictive
opioids and other controlled substances. The settlement resolves previous allegations that the drugstore chain failed to provide pharmacists with access to the state of Massachusetts Prescription Monitoring Program (PMP). In July 2020, the attorney general of the Commonwealth of Kentucky filed a lawsuit against CVS alleging that their business practices aided in the advancing of the opioid epidemic. In November 2021, a federal jury in
Cleveland found that pharmacies operated by CVS Health,
Walgreens, and
Walmart were liable for contributing to the opioid epidemic in two Ohio counties. The trial lasted six weeks with the jury returning a verdict finding the Ohio pharmacies liable. It was the first trial where pharmacy companies defended themselves amidst the opioid epidemic. In August 2022, the company was one of three chains ordered to pay damages of $650 million by a
Cleveland judge in a lawsuit over opioid sales brought on by
Lake County and
Trumbull County in
Ohio. The other two chains were
Walgreens and
Walmart, with two others,
Rite Aid and
Giant Eagle, settling before going to trial. Lawyers representing the counties claimed damages of $3.3 billion.
CFI lawsuit for consumer fraud In July 2018, the
Center for Inquiry filed a lawsuit against CVS for consumer fraud over its sale of homeopathic medicines. The filing in part contends that apart from being a waste of money, choosing homeopathic treatments to the exclusion of evidence-based medicines can result in worsened or prolonged symptoms, and in some cases, even death.
Abortion pill controversy In January 2023, CVS announced their intentions to start dispensing
mifepristone, one of the two drugs used in a
medication abortion, following a change in regulations from the
Food and Drug Administration. After receiving their certification to do so, CVS started offering abortion pills in jurisdictions where they are legal. The offering of abortion pills at
pharmacies such as CVS has caused major political turmoil, and has resulted in numerous
protests in-front of the pharmacies.
Pharmacists mistakenly cause an abortion In October 2023, CVS mistakenly gave
misoprostol, an abortion pill, to Tamika Thomas, a woman undergoing
IVF who was supposed to be receiving a medication to help kick-start her
pregnancy. In an interview with 8 News Now, Thomas stated she knew something was wrong when she experienced major
cramping. "My cramping went beyond that. It was extreme. It was painful." As a result of the medication, Tamika lost both of her
embryos. She stated, "They just killed my baby … Both my babies, because I transferred two embryos."
Animal welfare In 2016, CVS committed to source 100% cage-free eggs by 2025, responding to pressure from animal welfare groups. In 2023, CVS announced that they reached this goal ahead of schedule, on December 31, 2022. ==Community involvement and philanthropy==