Probe Reveals Hundreds of Expired Products at CVS, Rite Aid

Statewide Sweep Uncovers Medication Sold More Than Two Years After Expiration Date
By MARCUS BARAM
June 12, 2008 —


A statewide sweep by New York State Attorney General Andrew Cuomo found that more than half of CVS stores and 43 percent of Rite Aid stores were selling expired drugs, milk, eggs and baby formula.

In some cases, over-the-counter medication was being sold two years after the expiration date, according to Eric Corngold, the head of the economic justice unit in Cuomo's office.

Cuomo says he intends to sue both chains for patterns of violating federal, state and local law that do not permit the sale of expired products and plans to seek injunctive relief.

Since March, prompted by complaints from consumers, dozens of undercover investigators visited close to 1,000 stores and detected an "egregious pattern at CVS and Rite Aid" of selling expired products, said Corngold at a news conference in New York this morning.

Expired products were sold at 142 CVS stores and 112 Rite Aid in 41 counties across the state, Corngold said.

Investigators found similar problems at other pharmacies and stores but "we determined that CVS and Rite Aid posed more of a threat to consumers in terms of number and frequency of expired products on the shelves," said Cuomo.

"This is about not getting what you paid for and that you may be buying products that are ineffective or even harmful."

Asked about whether investigators had uncovered any motivation behind the sale of expired products, Cuomo said, "Whether it's mismanagement or malicious intent, the law is clear and that's what we're going to enforce."

In recent years, several investigations have found both major chains selling expired products.

In March, inspectors for the Fairfield Department of Health in Pennsylvania found 100 expired baby food items at six stores, including 38 at a CVS in Lancaster.

At the time, CVS spokesman Mike DeAngelis told the Lancaster Eagle-Gazette that the company makes every effort to "rigorously review thousands of items" to ensure that expired products aren't sold in stores.

Five years ago, a similar investigation by Cuomo's predecessor, Eliot Spitzer, found that nearly one in three retail stores sold expired products. Among them were three CVS and three Rite Aid stores.

In 1999, Rite Aid paid $1.5 million in civil penalties and restitution after a California district attorney charged it with selling more than 200 expired products, including baby formula, children's analgesics and a 12-pack of condoms, at 50 stores.

Cheryl Slavinsky, a spokeswoman for Rite Aid, said that the chain received a letter from Cuomo about the investigation this morning and that they are taking the "allegations very seriously."

She explained that the chain has always had policies not to have outdated products on shelves and that they are checking products in the more than 5,000 Rite Aid stores in 31 states and Washington, D.C.

The chain is retraining its stores on their policies and procedures since "they obviously are not being followed," said Slavinsky.

In a statement emailed to ABC News, CVS spokesman DeAngelis said that Cuomo's findings were "unacceptable to us."

He added, "Our policy is to remove items before they go beyond the expiration date. We will work aggressively to ensure that our review and removal procedures are followed consistently in all of our stores.

While we did not receive formal notification from the Attorney General until this afternoon, we will cooperate fully with his Office in this matter."



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Central bank body warns of Great Depression

The Bank for International Settlements (BIS), the organisation that fosters cooperation between central banks, has warned that the credit crisis could lead world economies into a crash on a scale not seen since the 1930s.

In its latest quarterly report, the body points out that the Great Depression of the 1930s was not foreseen and that commentators on the financial turmoil, instigated by the US sub-prime mortgage crisis, may not have grasped the level of exposure that lies at its heart.

According to the BIS, complex credit instruments, a strong appetite for risk, rising levels of household debt and long-term imbalances in the world currency system, all form part of the loose monetarist policy that could result in another Great Depression.

The report points out that between March and May of this year, interbank lending continued to show signs of extreme stress and that this could be set to continue well into the future.

It also raises concerns about the Chinese economy and questions whether China may be repeating mistakes made by Japan, with its so called bubble economy of the late 1980s.

EDITORS NOTE: Quite a few comments have been made that there is no direct reference to the Great Depression in this month’s BIS report.

While this is strictly true, BIS warned in June 2007 - just before the Credit Crunch really hit - that the global economy was vulnerable to a major economic set-back because of extraordinary exposure to collateralized credit.

BIS directly made references to the 1930’s as an example of a similarly serious credit bubble, and this month’s BIS report describes the conditions of this being lived out.

So, to be pedantic, the warning “BIS warns of Great Depression” is actually a year old already. What BIS discusses now is the fragility of existing conditions of the fall-out from a massive credit bubble bursting - which has already been made clear across their reports historically can be similarly referenced to the 1930’s, though stated in a typically conservative and non-alarmist language.

Even what optimism BIS had about a weak recovery to the end of May 2008 have been dashed by extreme shorting of financial stocks across the US and UK - Lehman Brothers, HBOS, and property developers such as Barratts, have all taken extreme beatings in June 2008.

So back to the headline - BIS have indeed already warned of repeat of conditions that could be as extreme as the Great Depression, and are now describing that process as we move through it.

In the meantime, unemployment is already on the rise on both sides of the pond, and the analogy some people have concerns about I’m afraid are still salient.

- Brian Turner, Editor, Banking Times.