CVS To Stop Purchasing Medications From Certain Wholesalers
CVS officials on Tuesday announced that the company will no longer purchase prescription drugs from wholesalers that trade in the secondary market, "the latest industry effort to eliminate gaps allowing counterfeit drugs to get to consumers," the Wall Street Journal reports (Won Tesoriero, Wall Street Journal, 5/25). "CVS will only purchase pharmaceuticals directly from the manufacturer or from wholesalers who certify that they are not trading in the secondary market," Chris Bodine, executive vice president of merchandising and marketing for CVS, said in a statement, adding, "If we are unable to receive those assurances, those wholesalers' contracts will not be renewed." CVS officials declined to comment on the details of the certification process that the company will require for wholesalers (Abelson, Boston Globe, 5/25). In the secondary market, wholesalers purchase and sell medications to each other from a number of sources. Although many of the sources are legitimate, foreign markets -- from which the prescription drugs are stolen and then resold in the United States -- and counterfeiters, who make fraudulent medications to sell to wholesalers, also provide drugs to the secondary market (Kaiser Daily Health Policy Report, 4/11).
Effect on Wholesalers
According to USA Today, the CVS announcement might force the three largest U.S. wholesalers -- Cardinal Health, McKesson and AmerisourceBergen, which supply most of medications to the U.S. pharmacies -- to end trade with smaller wholesalers on the secondary market. Cardinal earlier this month announced plans to close a division that trades in the secondary market. Cardinal spokesperson Jim Mazzola said, "We support their move. It's consistent with steps we've already taken." AmerisourceBergen spokesperson Michael Kilpatric said that he could not comment on the CVS announcement. However, he said, "We purchase only one-half of 1% of our purchases from other wholesalers. As a result of our monitoring and security controls, we've had no incidents of counterfeit drugs in our distribution centers since spring 2002." McKesson declined to comment on the CVS announcement (Appleby, USA Today, 5/25). Analysts said that the CVS announcement should not have a "material impact" on the three wholesalers, the Journal reports (Wall Street Journal, 5/25).
Larger Issue
CVS made the announcement after New York Attorney General Eliot Spitzer (D) last month subpoenaed the three wholesalers as part of an investigation into purchases between wholesalers, and some state lawmakers this year have proposed legislation to address the issue (Boston Globe, 5/25). Andrews said that some of the state legislation is "impractical" and that CVS hopes that the announcement will lead to improved patient safety (Wall Street Journal, 5/25). "A lot of hands can touch that same drug in the secondary market," Bryan Liang, executive director of the San Diego Center for Patient Safety at the University of California-San Diego School of Medicine, said, adding, "But CVS' announcement is a good thing, and hopefully this is starting a movement in the seller market that they don't want to play in this game of the middlemen anymore" (Boston Globe, 5/25). Katherine Eban, author of "Dangerous Doses: How Counterfeiters are Contaminating America's Drug Supply," said, "This is a tremendous step," adding, "Almost every single counterfeit that has reached patients has passed through a major pharmacy chain" (USA Today, 5/25).
