(Bloomberg) -- One factory making CVS-branded pain and fever medications for children used contaminated water. Another made drugs for kids that were too potent. And a third made nasal sprays for babies on the same machines it used to produce pesticides.
The drugs were among those sold by CVS Health Corp., the largest US pharmacy, under itsstore-brand label before being recalled.
Other chains have seen their share of recalls for their own store-branded medications. But over the past decade CVS’shave been recalled about two times more than those from Walgreens Boots Alliance Inc. and three times more than those from Walmart Inc., a Bloomberg analysis of public records found. Both CVS and Walgreens say they offer more than 2,000 store-brand health and wellness products; Walmart declined to say how many it had for sale, but its website indicates it has many of the same drugs available as CVS and Walgreens do under its Equate store brand.
This potentially dangerous pattern has roots in the quality of the factories from which CVS sources its generic medicines, the findings show.
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There’s little incentive for large drug purchasers like pharmacies and hospitals to choose suppliers based on quality, said Kevin Schulman, a professor of medicine at Stanford University. Rather, they often choose the lowest-cost manufacturing contracts, which Schulman’s research has found 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,” he said.
When choosing suppliers, CVSprioritizes “good manufacturing and ethical sourcing practicesand the ability to meet our strict standards and testing practices,” said Amy Thibault, a spokesperson for the company.
CVS-branded medicationrecalls represent fewer than 1% of US Food and Drug Administration drug recalls over the past decade, she added.The FDA’s drug recall database includes both prescription and non-prescription treatments.CVS’sstore brands “are designed to maximize quality and safety, work as intended, comply with regulations and satisfy customers,” she said.
Many consumers believe that drugstore brands are a cheaper, nearly interchangeable substitute for name-brand ones. Last November, Joan Collins, a 78-year-old from Nassau County, New York, purchased CVS eye drops to relieve irritation.Soon after using them, her eyes turned red and swollen and she developed headaches and started seeing double, according to a legal complaint she filed against the pharmacy chain in January. Collins was diagnosed witha severe eye infection, which a doctorattributed to the CVS eye drops. Collins ended up in the hospital for a week.
The eye drops Collins bought shouldn’t have been on CVS shelves at all. A month earlier, FDA inspectors had foundpeeling paint, barefoot workers and fabricated test results that gave the appearance of product safety at the facility in India where they were made. Samples taken at the factory alsofoundbacteria 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 still had them for sale two weeks later, when Collins bought them.
Even months later, Collins hadn’t completely regained her eyesight, according to the complaint.
CVS responded to Collins’claims in court documents, saying that it sold the drops but denying “that the product at issue in this action had quality oversight issues or was unsanitary or defective in any respect.”The retailer also said that it isn’tresponsible for the manufacturing process or quality control of the factories that make its generic drugs.The case is still pending in New York state court.
The use of contract manufacturers is increasingly attractive in the pharmaceutical industry because outsourcing is cheaper than building a production plant, said Michael de la Torre, chief executive officer at Redica Systems, a pharmaceutical data analytics firm. Larger drugmakers typically visit a supplier that’s either making an active ingredient or producing a finished product. This can help them see glaring problems like sanitation issues and evaluate manufacturing practices firsthand.
Drugmakers that outsource production to other companies are “legally responsible for approving or rejecting drugs manufactured by the contract facility, including for final release,”said Amanda Hils, a spokesperson for the FDA.
There is a loophole, however, for store-brand drugs. The agency considers pharmacy chains like CVS “private-label distributors.” In the case of the generics they hire others to make, it’s the manufacturers themselves that are responsible for the quality of the drugs, according to FDA guidance.
That setup has created a concerning gap in the oversight of everyday medicines that many Americans take to save a few bucks.
Over the last decade, 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, according to a Bloomberg News review of FDA data. 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 instanceinvolving CVS store brands, FDA inspectors visited a contract manufacturer called Unipharma LLC in Tamarac, Florida, in 2019, and determinedit had been ignoring test results that showed water used in its drugmaking was contaminated with a bacteria that can be deadly to children with weakened immune systems. The company, now defunct, 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 made so CVS could sell them under its own name. The drugs were distributed nationwide.
More recently, a factory in Xiamen, China, that made burn cream for CVS home first aid kits was banned in October from sending drugs to the US because they were at risk of microbiological contamination.Sun Pharmaceutical Industries Ltd. recalled generic Allegra allergy medication it made for CVS in January after FDA investigators found stagnant liquid inside an air purification unit at the drugmaker’s facility in India that was later found to have yeast and mold colonies, according to an inspection report. Sun Pharmaceutical didn’trespond to requests for comment.
In response to questions from Bloomberg, CVS said it doesn’t visit the factories it hires to make store-brand drugs. CVSrelies on a third-party auditorwho visits any facility before the companybegins working with it, and annually after that. Walgreens either sends its own representative or a third party to visit the factories with which it works. Walmart didn’t respond to questions about its practice.
CVS first started emphasizing store brands in 2014 and then put “considerable focus” on them four years later, Brenda Lord, vice president of store brands and quality assurance at CVS Health, told the National Retail Federation in a 2022 interview. CVS wanted to be a leader asconsumers sought less expensive alternatives. “There’s no longer a stigma attached to buying cheaper store brands,” Lord said in the interview with the trade group.
The pharmacy chain’s drugs are marked with a red heart and the words “CVS Health” on the box or bottle. CVS doesn’t break out how much it makes from such products, though store-brand items of all kinds —from beauty and food to home and health — accounted for around a quarter of the company’s overall sales, Lord estimated at the time. Since then, the category across retailers has only grown, rising 4.7% to$236 billion in 2023 compared with 2022, according to the Private Label Manufacturers Association.
For retail pharmacies, including CVS, front-of-store sales —meaning anything not sold at the pharmacy counter —have been struggling for years with e-commerce and discount giants attracting more shoppers. To lure people back, drugstores are refreshing the stores and trying to carry more products that align with health and wellness messaging.
FDA officials have raised concerns before about lax oversight ofcontract manufacturers. In 2017, an official said the agency hadsent multiple warning letters to companies for not keeping a close eye on manufacturers for hire. Several cases involved companies that hadn’t checked for particulates in eye drops. “They are just not even looking,”Francis Godwin, who monitored drug quality in the agency’s Office of Compliance, said at a conference that year.
Still, in 2019, CVS, Walgreens and Walmart had store-brand eye drops recalled. Theystemmed from an FDA inspection that found workers at anAltaire Pharmaceuticals plant in New Yorkwere falsifying data to make their products appear safe.In the incident, CVShad many more types of drops recalled than its competitors.Altaire declined to comment.
US health authorities last year tied at least four deaths and several cases of vision loss to drops made at a factory in India. Those weren’tsold at CVS, but other retailers nationwide.
FDA officials found more red flags in other factories in India that supplied store-brand eye drops to the pharmacy giants. Agency officials who in January visited Brassica Pharma Private Ltd., which made drops for both Walmart and CVS, found operators touching the inside of tubes that were to be filled with sterile drug products, according to an inspection report obtained via a Freedom of Information Act request. Brassica also faked test results that were meant to detect microbiological contamination at the factory, according to the inspection report.Brassica Pharma didn’t respond to requests for comment.
The FDA generally inspects drug-production factories once every few years and doesn’t regularly test drugs Americans take. With companies under pressure to keep generic drug prices low, there’s little incentive to invest in additional quality control measures. And while recalls may get unsafe medications off of shelves, it doesn’t necessarily get them out of medicine cabinets —consumers aren’t always aware of the defective products.
“This sole emphasis on cost pushes the price down to the point where high-quality manufacturers don’t want to stay in the market,” Schulman said.
--With assistance from Fiona Rutherford.
©2024 Bloomberg L.P.
