Not Great Being CVS Lately
CVS is the nation’s leading retail pharmacy chain. It’s also taken a lot of hits recently that has injured its stock price and given them publicity I’m sure they don’t like.
It started out with their receiving notice from the FDA that they were making false claims about their mouthwash helping to prevent plaque and prevent gun disease. This is a common claim by many mouthwashes, based on the fact that many contain something called sodium fluoride, which had been thought to be kind of a super ingredient that could solve many ills. Turns out it can help prevent cavities, but that’s about it. CVS wasn’t the only one cited, but that started the negative ball rolling.
Next up was their public battle with Walgreens over insurance coverage back in June. CVS has its own drug prescription program, and thus it would pay other pharmacies for filling prescriptions. Two things, among others, that rankled Walgreens were the fact that they never were sure how much CVS was going to pay for certain pharmaceuticals, and that CVS decided that people with more serious issues could only buy pharmaceuticals from them instead of anyone else. Walgreens wasn’t the only drug store chain that complained about it, but they were the biggest. CVS’s initial response was to totally drop Walgreens from the plan, which sent stocks falling; hard to take losing one of your biggest providers. They eventually made up and all is right with the world once more, but it was scary for awhile.
Then this week they agreed to pay a $75 million fine and forfeit more than $2 million in profits because they weren’t properly monitoring a pharmaceutical that was being bought in large quantities that’s used in the production of methamphetamine in 2007 and 2008. That ingredient, called pseudophedrine, led to an increase in meth production in southern California and Las Vegas. They said they would put controls in place to monitor this in the future; their stock price fell about 1.2% after the announcement. They had to plead guilty so the U.S. Attorney General’s office would drop criminal charges.
Who says that any publicity is good publicity?