The Pharmacy Chain Violations You Need to Know About

In the USA, we are blessed with various companies able to provide us with our medication, whether through mail order or in a pharmacy.

We can be prescribed medication, and the scientists, doctors, and pharmacies are all working together to ensure we can get them.

However, many of these companies behind the scenes are disrupting the sector out of greed. Malpractice, false claims, fraud, employment violations, and more have all been prevalent. All in the name of making money and delivering a higher ROI to their shareholders.

Today, we thought we would look at the main offenders in the trade and what they did to accumulate these huge fines that should deter them from such poor ethics.

Who are the pharmacies breaking the law?

Before we go any further, we should say that once these fines were issued, it would be hoped that all offenders would now adjust their work practices to avoid future loss of earnings, controversy, and prosecution. Whether this waivers your trust in them is down to you; however, prescription delivery services in the mold of RxMile have started to change how we can get medicine and offer trustworthy, compliant, and safe routes to the patient and pharmacy satisfaction. Below you will find the four main offenders.

The four largest pharmacies by market share

The four pharmacies we cover take the largest market share in the USA. Below, you can see just how much of a monopoly they hold and how much they can control how the industry works.

CVS- 24.5% market share (9.7% attributed to mail and specialty pharmacy)

Walgreens Boots Aliance-18% market share

Cigna (Express scripts)- 10.9% market share

UnitedHealth Group (OptumRx)- 6.8%

Independent pharmacies may be small in market share but can turn the tide by exhibiting fairer practices, patient priority, and cost-effectiveness. This is all possible. We all have to work together. Below are the penalties accrued by the PBM/Pharmacy collusion.

CVS - $1,667,262,435 in penalties

The CVS group, based in Rhode Island, saw the highest fines of the groups in our report. A massive $484m of fines was issued due to the off-label or unapproved promotion of medical products. The penalty was substantial because CVS had been alleged to have distributed and dispensed prescription opioid pain medication in a fashion that caused harm to the health of Florida residents and the state.

Omnicare inc and CVS Caremark, companies within the CVS umbrella, were also fined substantial amounts concerning false claims. The $124m fine issued to Omnicare in 2014 related to offering incentives to skilled nursing facilities in return for their continued selection of Omnicare to supply drugs to specific beneficiaries.

Walgreen - $1,386,951,305

Walgreen, a name generally associated with being an organization of high standing, has been slammed with high-level penalties over the years. In 2022 the company was hit with a $680m fine for the same reason CVS received its hefty fine. Just three years before, a huge $269m was to be paid after they had been alleged to have billed federal healthcare programs for hundreds of thousands of insulin pens it knowingly dispensed to beneficiaries who did not need them and that it overbilled Medicaid by failing to disclose to and charge them the lower prices that Walgreens was offering the public through a discount system.

In addition, with the data we have, we can see that not only was fraudulent activity taking place regarding pricing, but the company also committed an unprecedented number of record-keeping and dispensing violations under the controlled substances act. This alone led to an $80m fine being issued.

Cigna - $427,773,426

The rap sheet for Cigna is significantly lower than the two main offenders. Still, the $155m fine issued in 2006 shows that this company, currently the 3rd largest of its type in America, is just as complicit in corrupt and illegal behavior. The charges that found the company having to pay this fine related to the company being alleged to have submitted false claims to the government, asked for and accepted kickbacks from pharmaceutical manufacturers to favor their drugs, and paid kickbacks to health plans to obtain business.

Further enhancing the collusion between PBMs and the pharmaceutical companies in the fine issued back in 2008 that showed both Express Scripts and CIGNA had worked together switching prescription drugs for patients without telling them. While their list of offenses does not contain some of the severe offenses that the others show, what should concern people is the number of insurance violations. Spanning a period of over ten years, several fines were issued, with the totals running into millions of dollars.

United Health - $596,319,741

The Minnesota-based company has had to settle various allegations against them over the years, with a staggering $173m ordered to be paid in 2014. This particular charge stemmed from the fact that the business's PacifiCare Life and Health Insurance sector had failed to handle claims correctly for customers or providers. This led to nearly one million insurance code violations in 20 different categories.

The past few years have recently seen more claims made for insurance and consumer protection violations. One such case in 2021 saw them fined $1.3m for unlawfully denying healthcare coverage for mental health and substance use disorder treatment.

The collusion between PBMs and Pharmaceutical companies

You may question how and why it is possible that such practice can exist when it comes to providing a fundamental human right. Unfortunately, the intertwined nature of the PBMs and the pharmaceutical companies has meant that only one goal stood out: to make money. Now that the FTC is looking into the shady world of operations within PBMs, it is hoped that full transparency will one day become prevalent.

“The FTC's primary focus on the probe is the PBMs' role in skyrocketing consumer drug prices. We must also highlight what the PBMs have done to the independent pharmacy market. Just look at how critical independent pharmacies' role was during the pandemic! This small business sector is essentially being exterminated while being one of the most vital roles in a patient's value-based care model.”  

Says Kunal Vyas the founder and CEO of RxMile.

At RxMile, we understand the importance local pharmacies play in supporting the community. That is why our bespoke pharmacy software creates a safe, compliant, fully regulated prescription delivery service that benefits the patient and the pharmacy. If you are a pharmacy searching for the easiest way to remain cost-effective, totally in control, and free from the controlling world of having PBMs dictate the cost, availability, and types of medication you can provide, speak to us. We can organize a free demo where you can truly experience the benefit our technology will give you.

Data source: goodjobsfirst.org