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CVS sued over expired products

01:00 AM EST on Friday, December 5, 2008

By Karen Freifeld

Bloomberg News

Woonsocket-based CVS Caremark Corp. was sued by the State of New York yesterday over sales of expired products, the same day the state announced the settlement of similar claims against competitor Rite Aid Corp. for as much as $1.3 million.

New York officials accused CVS of selling items that had expired as far back as 2006. Last spring, state investigators said they found old products at 60 percent of the CVS stores visited in New York and 43 percent of Rite Aid stores visited.

“In today’s difficult economic times, consumers should not be spending their hard-earned money on expired products that may be harmful to themselves or their children,” New York Attorney General Andrew Cuomo said in a statement.

In the suit against CVS, Cuomo claims that by selling expired products, the company violated New York’s Executive Law and General Business Law, as well as federal and local laws. CVS is the nation’s second-largest drugstore chain by stores, behind Walgreen Co. Rite Aid ranks third.

Michael DeAngelis, a spokesman for CVS, said the company has been cooperating with Cuomo’s office and was disappointed he decided to file suit.

“We have a specific product-removal policy,” DeAngelis said in an e-mailed statement. “Over the last several months we retrained our employees to ensure compliance.”

New York wants CVS to be ordered to retain an independent monitor for monthly checks, post signs for consumers that they are entitled to refunds for expired products and their health risks and pay a civil penalty of $500 for every violation of general business law, according to the petition.

In 2003, CVS resolved an earlier investigation by New York that revealed the chain sold over-the-counter drugs after their expiration dates, Cuomo said in his suit. The company then agreed to stop selling expired drugs and implement safeguards for the future.

In June, California Attorney General Jerry Brown also accused CVS of selling expired baby food and over-the-counter drugs. In March, the Fairfield Department of Health in Pennsylvania found 100 expired baby food items at six CVS stores, according to Cuomo’s suit.

“The widespread nature of these violations indicates that CVS has not taken seriously its legal obligations or its responsibilities to its consumers vis-à-vis the sale of expired products,” New York officials said in the complaint.

As part of Rite-Aid’s settlement, the company agreed to conduct weekly inspections of its New York stores to ensure expired over-the-counter drugs, infant formula, milk and eggs aren’t offered for sale, Cuomo said. Rite Aid will immediately pay a $1 million civil penalty and as much as $300,000 more if it fails to comply with the agreement during the next three years.

Cheryl Slavinsky, a spokeswoman for Camp Hill, Pa.-based Rite Aid, said that it had always been company policy to not sell outdated produced. Rite Aid took seriously the results of the probe, she said.

“We’ve reinforced our policies, retrained our associates and put in place a new system of checks in our stores to ensure that merchandise is not sold beyond its expiration date,” Slavinsky said.

In June, Cuomo announced the results of a probe since March that included about 1,000 locations of several drugstore chains. Investigators turned up more than 600 expired products, including baby formula. Expired products were sold at more than 122 Rite Aid stores and 148 CVS stores in New York, Cuomo said yesterday.

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