Either Americans don’t care all that much about their health or the mainstream media is woefully out of touch with what Americans care most about, but my guess is the former is true. I’m aghast how little pick up this Bloomberg story has received regarding the perils of buying generic store branded over-the-counter drugs in general and from CVS in particular. At this writing, only the New York Post, which I’ve long regarded as being in tune with mainstream America, has picked up the story.
Given that Bloomberg charges $35 a month for a subscription to its superior business journalism, many Americans can’t, or won’t, fork out that kind of money to keep themselves better informed. As a public service, I’m going to share the findings of Bloomberg’s CVS analysis to better protect the health of my subscribers.
Suffice to say, after reading Bloomberg’s story, it will be a cold day in hell before I ever buy a CVS-branded product. My guess is you, too, will be reluctant the next time you set foot in one of CVS’s sorry excuses for a drug store.
Bloomberg reporters Anna Edney and Peter Robison did a painstaking analysis of publicly available FDA data on OTC drug recalls. Over the past decade, CVS’s store branded medications have been recalled about two times more than those from Walgreens and three times more than those from Walmart. Both CVS and Walgreens offer more than 2,000 store-brand health and wellness products; Walmart also offers a considerable but undisclosed number of OTC drugs under its proprietary Equate label.
Buying defective OTC products can be hazardous to your health, and in some instances, might kill you. US health authorities last year attributed at least four deaths and several cases of vision loss to drops made at a factory in India. Admittedly, the killer eye drops weren’t sold at CVS, but Joan Collins, a 78-year-old from suburban New York City is suing America’s biggest drug store chain alleging that it’s tainted store branded eye drops were responsible for a severe eye infection that landed her in the hospital for a week.
Bloomberg reported that a month before Collins bought her eye drops, FDA inspectors visited the India factory where they were made and found peeling paint, barefoot workers and fabricated test results creating the illusion of product safety. Samples taken at the factory also revealed bacteria in crucial parts of the production facility. While the FDA had warned consumers not to use certain CVS eye drops on Oct. 27, the drugstore chain was still selling them two weeks later when Collins bought them.
CVS admitted in court documents that it sold the drops but denied “that the product at issue in this action had quality oversight issues or was unsanitary or defective in any respect.” Get this: CVS said it isn’t responsible for the manufacturing process or quality control of the factories that make its generic drugs.
Note to Steven Croley, Ford’s superstar general counsel ultimately responsible for dealing with the automaker’s legions of lawsuits and recalls: You might want to consider CVS’s legal defense and argue that Ford isn’t responsible for the defective parts manufactured by its suppliers.
When it comes to choosing drug manufacturers, pharmacies and hospitals make their choices based on price, not quality. According to Kevin Schulman, a professor of medicine at Stanford, pharmacies and hospitals opt for manufacturers who can deliver products at the lowest costs, which his research indicates leads to lower-quality medicines.
“The best way to make a low-price product is to skimp on quality and that’s what we’re seeing over and over and over again,” Schulman told Bloomberg.
Not surprisingly, CVS’s manufacturers are seemingly as schlocky as the company’s unispiring drug stores. According to Bloomberg, CVS hired at least 15 manufacturers that were cited for manufacturing problems, more than twice as many as its largest rival, Walgreens. This led to 133 recalls of CVS store-brand drugs — an average of more than one a month — in that time frame for both pediatric and adult medications. Walgreens had 70 recalls over the same period and Walmart had 51. CVS and Walgreens each have around 9,000 stores; Walmart has about half as many, though that doesn’t necessarily correlate to how many store-brand products they sell.
In one instance involving CVS store brands, FDA inspectors in 2019 visited a contract manufacturer called Unipharma LLC in Tamarac, Florida, and cited the company for ignoring test results that showed water used to make the drug was contaminated with a bacteria that can be deadly to children with weakened immune systems. Unipharma, which is out of business, recalled all of its non-prescription products, including cherry-flavored children’s pain and fever medicine, mixed berry children’s allergy relief and pineapple-flavored children’s cough syrup — all sold under its CVS brand. The drugs were distributed nationwide.
Bloomberg didn’t make clear how CVS notifies customers of its legions of OTC recalls. I visit my local CVS often – for some curious reason my dog likes to walk through the store and mosey up to the pharmacy counter – and I’ve yet to see any postings notifying customers of product recalls.
Be forewarned, it’s not only CVS’s oral OTC drugs that are potentially harmful. The FDA last fall banned CVS-branded burn cream manufactured in China from being exported to the U.S. because of risk of microbiological contamination. CVS-branded nasal sprays intended for infants were recalled after the machines used to produce them were also used to make pesticides.
CVS’s comment to Bloomberg about its recalls is typical of the disgraceful spin that one expects from GM’s and Ford’s spokespersons.
When choosing suppliers, CVS prioritizes “good manufacturing and ethical sourcing practices and the ability to meet our strict standards and testing practices,” spokesperson Amy Thibault had the audacity to tell Bloomberg. Thibault argued that CVS-branded medication recalls represent fewer than 1% of US Food and Drug Administration drug recalls over the past decade, and the company’s store brands “are designed to maximize quality and safety, work as intended, comply with regulations and satisfy customers.”
Thibault was mistaken believing she could spin her way out of Bloomberg’s damning findings.
While CVS’s store brands might represent a fraction of FDA recalls, they are likely 100 percent of the generic OTC brands purchased by many of the company’s customers. Brenda Lord, vice president of store brands and “quality assurance” at CVS Health, estimated in a 2022 interview that store-brand items of all kinds — from beauty and food to home and health — accounted for roughly a quarter of the company’s overall sales. Since then, the store brand category across retailers rose 4.7% to $236 billion in 2023 compared with 2022, according to the Private Label Manufacturers Association.
“There’s no longer a stigma attached to buying cheaper store brands,” Lord said in a 2022 interview.
The only flaw in Bloomberg’s story was it didn’t provide any perspective on the recall frequencies of name brand drugs. It’s my hope that manufacturers of name brand OTC products still value the reputations of their products as Johnson & Johnson did in September 1982 when it voluntarily recalled all its Extra-Strength Tylenol painkillers after seven people died taking cyanide-laced capsules that had been tampered with. J&J’s handling of the recall is considered one of the best instances of crisis management.
Companies these days aren’t as protective of their brands, particularly CVS. The company and its subsidiaries have paid $6.8 billion in regulatory penalties since 2000, including $5.5 billion for off-label or unapproved promotion of medical products. As an example of pervasive wrongdoing that gets little or no media coverage, CVS in February settled with Ohio’s pharmacy board for $1.3 million to resolve 27 cases involving 22 stores in the Buckeye State alleged to have engaged in various wrongdoings, including understaffing, failures to dispense medications within a certain timeframe, failure to provide rest breaks, and the use of quotas.
CVS’s CEO is Karen Lynch, who was paid $21.6 million for her 2023 performance. Fortune editor Alyson Shontell last year declared Lynch “the most powerful woman in corporate history by miles.”
Kudos to Bloomberg for taking a critical look at how Lynch exercises that power. The media outlet’s CVS story serves as a reminder that if something seems too good to be true, it probably is. It’s also an example that when it comes to consistently serving up quality journalism, Bloomberg subscribers get what they pay for.