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CVS To Pay For Aiding In Manufacture Of Meth

October 15, 2010

CVS Caremark Corp. has agreed to a settlement of $77.6 million in penalties because its drugstores allowed sales of cough medicine to be used to manufacture methamphetamine.

A U.S. Attorney in Los Angeles said on Thursday that CVS Pharmacy Inc. admitted it sold pseudoephedrine to criminals who used it to make the illegal drug meth. The chemical is used in different types of cough and cold medicines, and federal law only allows one to be purchased at a time.

Meth has become relatively cheap and widely available in the U.S.  Mexican drug cartels illegally import a lot of it into the U.S., but many U.S. sellers cook meth up at home themselves.

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

Prosecutors said that CVS implemented a system that failed to prevent multiple purchases by an individual customer on a single day, and smurfers soon inundated CVS stores in California and Nevada.

The government said in a statement that CVS eventually changed its practices to prevent the sales after it became aware of the investigation.

Thomas Ryan, CVS’s chief executive, said in a statement on Thursday that the sales of the drugs were an “unacceptable breach” of company policy and “totally inconsistent with our values.”

The company has agreed to pay $75 million in penalties, and forfeit $2.6 million in profits from the illegal sales.

The government said it will not pursue criminal charges against CVS.

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