CVS Won't Buy From Wholesalers That Trade in the Secondary Market

June 6, 2005

Pharmacy giant CVS has said it no longer will purchase pharmaceuticals from wholesalers that trade in the secondary market, which has been identified as an entry point for counterfeit and adulterated drugs.

Under the policy shift announced recently, CVS will purchase drug products directly from manufacturers, or from wholesalers that certify they are not trading in the secondary drug market. "If we are unable to receive those assurances, those wholesalers' contracts will not be renewed," said Chris Bodine, CVS' executive vice president of merchandising and marketing.

CVS, the country's largest retail pharmacy, said it does not trade in the secondary market and is requiring its pharmaceutical wholesalers "to meet this same high standard." The nation's three largest wholesalers -- Cardinal Health, McKesson and AmerisourceBergen -- account for roughly 90 percent of all U.S. drug distribution.

CVS' move would have a negligible effect on AmerisourceBergen's business, according to a company spokesman. "Amerisource makes less than one-half of one-percent of its purchases from another wholesaler," said spokesman Michael Kilpatric. "And the vast amount of those are authorized distributors from the manufacturers."