Cvs Case Study

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On October 14, 2010, the United States Attorney’s Office for the Central District of California announced that CVS Pharmacy, Inc. was fined $77 million (including $75 million civil penalty and the forfeit of $2.5 million profit) for its unlawful sales of pseudoephedrine, a regulated drug, to criminals between September 2007 and November 2008. During that period, the company failed to comply with laws that limit the quantity of the drug sold to individual customers. The sales, according to the Attorney’s Office, directly caused an increase the production of methamphetamine in California. CVS Pharmacy, Inc (“CVS/pharmacy”) is the retail pharmacy subsidiary of CVS Caremark Corporation (hereinafter collectively referred to as “CVS”). In…show more content…
The CMEA also requires regulated retail drugstores to provide proper training to those store-front employees who are responsible for directly dealing with customer purchases. Drugstores must ensure that these employees understand the legal requirements and follow proper procedures. Drugstores must also self-certify to relevant authorities in their jurisdictions to demonstrate that all store-front employees have undergone the required training. In accordance with the CMEA, U.S. Department of Justice Drug Enforcement Administration (DES) specified some specific rules (U.S. Department of Justice Drug Enforcement Administration, 2006) relating to logbooks maintained by drugstores. Paper logbooks must be bound. For electronic logbooks, the records must be readily retrievable by the store or law enforcement agencies; and an electronic signature system may be implemented to capture customers’ signatures. DEA also requires the following notice be included in all logbooks and shown to customers: “WARNING: Section 1001 of Title 18, United States Code, states that whoever, with respect to the logbook, knowingly and willfully falsifies, conceals, or covers up by any trick, scheme, or device a material fact, or makes any materially false, fictitious, or fraudulent statement or representation, or makes or uses any false writing or document knowing the same to contain any materially false, fictitious, or fraudulent statement or entry, shall be fined

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