Geez, Straining for Revenue Growth Got a Little Ugly at CVS, Eh?

The Los Angeles Times’ David Lazarus, in an explosive series of articles, has reported that CVS (CVS) pharmacists ‘refilled prescriptions and submitted insurance claims without patients' approval,” a move that would bolster revenue.

The government’s Medicare authorities are investigating, Lazarus reports.

Through consolidation, the pharmacy industry – which includes Walgreens (WAG) and Rite-Aid (RAD) – has become increasingly competitive.

CVS Net Income TTM Chart

CVS Net Income TTM data by YCharts

“The bizarre, possibly illegal practice was spelled out in confidential emails sent this year by a CVS pharmacy supervisor to dozens of pharmacists under his control,” the Los Angeles Times articles reported. “The emails make clear that an internal quota existed for prescription refills, with at least 30% of calls to patients about their medications expected to result in return business. A threat of "major personnel changes" was made to pharmacists who couldn't hit their quota.”

Customers noticed the practice, and Lazarus followed up, getting a copy of the email allegedly ordering the practice.

From the editors of YCharts, which includes the just-released YCharts Pro Platinum for professional investors.



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