CVS Caremark Corp. could face as much as $29 million in fines in connection with losing track of prescription painkillers at stores in Modesto and Turlock and two other locations. Authorities said thousands of the pills may have been sold on the black market.
Officials at the U.S. Drug Enforcement Administration and the California Board of Pharmacy said Monday that more than 37,000 pills were apparently taken from CVS stores in Modesto, Turlock, Fairfield and Dixon.
Meanwhile, CVS pharmacists in Southern California said theyve been instructed by the drugstore chain to get their paperwork in order so no other prescription medications are found to be missing.
Casey Rettig, a special agent in the DEAs San Francisco office, said warrants were served on the four California CVS stores in May. She declined to comment further because the agencys investigation remains open.
Virginia Herold, executive officer of the state Board of Pharmacy, which licenses and oversees all drugstores in California, said each of the missing pills all painkillers, such as Vicodin could have a street value of as much as $10.
Lauren Horwood, a spokeswoman for the U.S. attorneys office in Sacramento, said CVS faces 2,973 possible violations of the federal Controlled Substances Act in connection with discrepancies between the companys records and its inventory of prescription drugs.
The maximum fine for these violations could be $29 million, she said.
Horwood said CVS has not responded to a letter sent last month by her office. The letter outlines the claims of violations and seeks more information from the company.
Officials, requesting anonymity because of the sensitivity of the matter, described the loss of painkillers as a big problem throughout the pharmacy business.
In some cases, the drugs have gone missing because pharmacists self-medicate, they said. But in most cases, the officials said, lower-level pharmacy workers such as technicians have made off with the drugs and then sold them.
Such thefts typically come to light after pharmacies perform routine inspections of their inventory. Theyre required by law to report any missing medications within 14 days of discovery.
According to formerly sealed affidavits submitted as part of the DEAs application for search warrants, an investigator for the agency, Brian Glaudel, said the Sacramento district office became aware in late 2012 of losses of numerous hydrocodone tablets from CVS stores in the region.
Hydrocodone is a narcotic painkiller sold under brand names including Vicodin and Norco.
The pending investigations stem from a case involving a CVS store in Rocklin, northeast of Sacramento.
Glaudel said CVS notified officials in December 2012 that a pharmacy worker in the Rocklin store was seen hiding a bottle of hydrocodone in her pants.
The worker subsequently admitted to CVS managers that she had stolen more than 20,000 hydrocodone tablets, Glaudel said.
The worker was arrested and charged with embezzlement, he said. Its unclear whether the stolen hydrocodone was recovered in the Rocklin case.
Glaudel said DEA investigators went over records for other CVS stores in the area and found more than 16,000 hydrocodone tablets missing from the Turlock store, 11,000 from the Fairfield store and almost 5,000 each from the Modesto and Dixon stores.
Michael DeAngelis, a CVS spokesman, said the investigations are aimed at assuring compliance with state and federal requirements for administrative record keeping related to invoices and inventory for controlled substances.
He said CVS regularly tells its pharmacists to maintain certain records and paperwork, and recently sent them reminders.
This is the second time in the past year that CVS has found itself facing stiff fines for questionable oversight of prescription drugs.
The chain and its Oklahoma subsidiary agreed to pay $11 million in April to avoid civil charges that they failed to keep accurate records of drugs being received from wholesalers and dispensed to customers.
Federal prosecutors had accused CVS pharmacies in Oklahoma of creating fake DEA license numbers on dispensing records, filling prescriptions for doctors without valid licenses and improperly labeling prescription vials.
CVS said after that settlement was announced that the allegations against the company involved administrative record-keeping matters, and that neither the DEA nor the U.S. attorney claimed that any patients health or safety was put at risk.
The company did not admit any wrongdoing, saying it settled to avoid the uncertainty of time-consuming litigation.
Michele M. Leonhart, the head of the DEA, was more forceful in her appraisal of the case.
She said last years settlement with CVS highlights DEAs steadfast resolve to combat the growing prescription drug abuse problem in this country by ensuring that all DEA registrants, including nationwide pharmacy chains, are in compliance with the law.
Abuse of prescription drugs is one of the most critical issues we face today, she said. The scope of this problem is alarming.