CVS Monopolist’s Travesty Of Justice

The arbitrary, callous firing of a much admired, hard -working pharmacist raises questions about whether the largest U.S. drug store chain has become a monopoly that mistreats employees, short changes customers and is strangling competition

On the left is Neda, who for 13 years was an outstanding employee of CVS, but then was suddenly fired for daring to keep serving customers on a busy day during her lunch hour. She is shown here helping a first responder who was on the scene in the Encino CVS. She was always the firzt to help and the most caring about customers.

Hours after this picture was taken, she was fired and marched out without being allowed to say goodbye to fellow employees.

Does The Fish Stink From The Head Down?

This is a photo of Larry J. Merlo, whom you have most likely never heard of, even though for the past nine years he has headed a major American corporation with Amazon-like monopoly power over U.S. retail drug circuits – that in 2019 ranked as the fifth largest company on the Fortune 500 and number 13 on its Global 500.

Recently I set out to see what there was to learn about the press shy 64 -year-old Pittsburgh native and Rhode Island resident who earned almost $20 million as CEO of CVS Health last year. I was horrified by a travesty of justice that was the wrong thing to do, impacting the wrong person, at exactly the wrong moment in American history - in the midst of a pandemic . It touched me, friends and family, and my neighbors, very personally. What I have learned about how this acquisitive retailer operates is disturbing, so it is my obligation to raise a red flag.

This is a story sparked by the arbitrary, insensitive, callous firing of an excellent, dedicated, hard -working pharmacist - much beloved by her community – for the flimsiest of reason. It led me to research Merlo and his company, resulting in questions about how they wield their near monopoly power, and whether they lie to the public and violate their own company policies.

I tried to ask Larry Merlo, or his head of communications, for an explanation or at least a response, but got no reply. So, I am sharing it here and will let you help me judge whether this was a righteous firing, and more importantly whether this is a company that pretends to be a great citizen, but in reality quietly cuts corners to get richer and bigger at the expense of both its customers and employees, and possibly to the detriment of the health of millions.

Merlo and colleagues celebrate on Wall Street

Merlo lives in Rhode Island where he has been married to the same woman for over 40 years and has one daughter. He is occasionally in the business press but almost never in consumer press. There is little written about him personally beyond his official company bio.

He may have a low profile but he is very, very well compensated. In 2015, Fortune Magazine reported that Merlo had the highest CEO to average employee pay ratio of any American company, a year after he raked in over $32 million (2014). In other words, he made more than any of his employees, to a degree greater that any other U.S. CEO.

CVS is owned by a public company now called CVS Health, which in 2019 reported revenue of $257 billion and profits of $6.7 billion. The name CVS was born in 1963 in Massachusetts and originally stood for Consumer Value Store, but it long ago outgrew its early beginnings.

CVS in its early days

It has emerged in a few short years as the largest American drug and notions retailer after a series of aggressive acquisitions that has seen this corporate octopus swallow up numerous local and regional drug stores with much deeper community roots.

Merlo’s crowning acquisition came last year when CVS acquired the Aetna insurance company and its 22 million customers for about $69 billion. It is part of his plan to grow CVS beyond being a place for drugs and sundries, to an extension of the medical services system that provides care, from advice on drugs to vaccinations – moving the company into an expanded role.

From The American Prospect - Why the Aetna and CVS Merger Is So Dangerous: Aetna and CVS have more incentive than ever to use their market power to crush competition, and the Justice Department just gave them the opportunity.

If CVS/Aetna knows the prescription drug usages, methods of delivery, and pricing data for all of its rivals, who all have patients who order prescriptions from CVS pharmacies, it can exploit that data advantage to skim off the top of every side of the pharmaceutical market.

A HISTORY OF PREDATORY MONOPOLISTIC ACQUISITIONS

Among the familiar names that have disappeared into CVS are Longs Drugs, Caremark, Savon, Clinton Drugs, Eckerd, Osco, Peoples, Heartland and Arbor Drugs. It took over all the pharmacies in Target. CVS now operates nearly 10,000 stores in the U.S. - far ahead of its nearest competitors, Walgreens and Rite Aid.

The outlet in my neighborhood, Encino, California, was a Savon when I first moved into the area and changed its name several times before becoming CVS.

My wife and I became a very loyal customers because of one pharmacist in particular, Neda, who not only offered excellent pharmaceutical services, but also went the extra mile to answer questions when there was a medical emergency, and provide appropriate guidance and also to find the best insurance. She offered a human touch to help people at a time of great stress, need as they struggled with health issues or concern for the lives of those they love.

For more than 12 years, Neda was a leader in operating an efficient operation (at two different CVS locations), worked long hours and yet always was helpful and of good heart. She had a real sense of service to her customers.

It wasn’t just my family’s opinion.

From a Yelp review this past July: “This CVS has officially restored my faith in humanity! Every employee there has been nothing short of welcoming, helpful, and professional. I must give a special thank you to Neda in the pharmacy department, who is as competent as she is compassionate. Her help has essentially kept me and my family alive-- and that is by no means an overstatement. She and her staff deserve all the praise and appreciation they can get. Despite moving out of the Encino area earlier this year, we refuse to go to any other CVS; this one has always been, and will forever be our home.”

Others on Yelp:

“I must give a special thank you to Neda in the pharmacy department, who is as competent as she is compassionate.”

“The pharmacist in this CVS is the kindest and most helpful pharmacist I've ever dealt with.”

“Best pharmacists ever! Neda is always quick and efficient. She used to be at a different CVS and when I noticed her at this location I transferred all my prescriptions to this one. She gets you in and out ASAP. If all people in all jobs were this efficient I may actually like humans a little more.”

Yet on August 12, Neda and another pharmacist colleague were suddenly fired. The reason she was given was that this hard working, dedicated professional had skipped her own lunch hour to remain and help customers because they had immediate needs and she had promised to be there when needed. She had been warned by the CVS suits not to skip lunch, but this was still a shock.

Neda was immediately walked out of the store, not even allowed to gather all of her belongings or say goodbye to her longtime colleagues.

When I did research, I learned that CVS might refuse to sell tobacco but that doesn’t make it people friendly. It has no qualms about cutting staffing to the bone, leaving customers in frustratingly long lines and putting enormous pressure on pharmacy staff, who are not paid anywhere nearly as well as doctors.

A Blogger wrote about why she quit: "I am only leaving because the store manager was terrible. The culture she established in her store made me extremely uncomfortable. That is the major problem with CVS you feel uncomfortable to do your job. There is always someone there to criticize inappropriately and unprofessionally."

The union that represents pharmacists in Chicago in 2016, for instance, raised the question of safety risks from "management's mistreatment of overworked and understaffed pharmacists.” Reported the Chicago Tribune.

Teamsters Local 727 “claims management has been unresponsive to workers' concerns about quality-of-life issues including uninterrupted breaks, preservation of the nine-hour workday and the elimination of ‘superfluous tasks’ that take time away from their primary responsibilities.”

“The public needs to know that when pharmacists are constantly given more work with less help and little down time during their long and demanding shifts,” added the Chicago Tribune, “this affects their performance and well-being — and it also can impact customer safety," quoting John Coli Jr., president of Local 727.

“CVS has been criticized under Merlo’s tenure as CEO for under-staffing, not allowing pharmacy staff to take breaks, and under-funding critical aspects of daily operations, writes Wikipedia.

“Additionally, claims of CVS using unethical and strong-arm business practices during Merlo’s tenure have been made. Several states are currently looking into CVS’s pharmacy benefits manager (Caremark) use of spread pricing and patient steering.”

CHICAGO TRIBUNE: Pharmacists at CVS, Rite Aid and Walgreens are struggling with understaffed and chaotic workplaces

They struggle to fill prescriptions, give flu shots, tend the drive-through, answer phones, work the register, counsel patients and call doctors and insurance companies, they said — all the while racing to meet corporate performance metrics that they characterized as unreasonable and unsafe in an industry squeezed to do more with less.

“I am a danger to the public working for CVS,” one pharmacist wrote in an anonymous letter to the Texas State Board of Pharmacy in April.

“The amount of busywork we must do while verifying prescriptions is absolutely dangerous,” another wrote to the Pennsylvania board in February. “Mistakes are going to be made and the patients are going to be the ones suffering.”

The American Psychiatric Association is particularly concerned about CVS, the U.S.’ eighth-largest company, which it said routinely ignores doctors’ explicit instructions to dispense limited amounts of medication to mental health patients. The pharmacy’s practice of providing three-month supplies may inadvertently lead more patients to attempt suicide by overdosing, the association said.

“Clearly it is financially in their best interest to dispense as many pills as they can get paid for,” said Dr. Bruce Schwartz, a psychiatrist in New York and the group’s president.

From Reddit: "I’ve been a pharmacist. I’ve worked for CVS

for 10 years. I’ve worked several hours after close...unpaid with no complaints because work just had to get done. I quit for many reasons that were out of my control. CVS sent me a letter saying I owe like $59 on my HSA account. I didn’t pay it because screw them."

in July the state of Oklahoma fined CVS for violations of safety regulations due to the inadequate staffing: "Two board compliance officers went to a CVS in Bartlesville, Okla., to research a criticism of a mislabeled prescription. There, they “witnessed a chaotic scene including the phones ringing almost all of the time, along with constant foot traffic and drive thru traffic,” based on a criticism filed in opposition to CVS. The officers mentioned the error with the pinnacle pharmacist, noting that she stated “she had lost a considerable amount of her support staff, and that the pharmacy was operating with little help, so she was not terribly surprised that an error could have occurred.” In an audit, the officers discovered an error charge of almost 22 %, or 66 errors out of 305 prescriptions. Some of the errors have been minor and wouldn’t have an effect on a affected person — similar to the inaccurate title of a prescribing doctor — however others have been extra vital, like directions for medicines that have been unclear or considerably completely different from what they need to have been."

AS THEY HAVE GROWN LARGER AND LARGER, SO HAS THE HYPE

I wanted to believe the hype that Merlo and CVS actually cared about its customers and employees. On the CVS website listed among “Focus Areas At CVS Health,” the company states: “We have conducted a corporate-wide human rights review and have mapped our human rights risks and opportunities. Given our findings our primary focus areas in human rights are in the following areas: 1. Colleagues: At CVS Health, we recognize that our employees are our greatest asset and our business is most successful when they are treated with dignity and respect… Respect for human rights is expressed in our company’s workplace policies and practices.”

That is the opposite of what happened to Neda. Her firing violates not only the promise this implies, but also the commitment to customers who have come to depend on her. It is a policy that seems so disastrously wrong-headed that is comes off as something more out of an authoritarian regime than a free society. That reflects poorly on Merlo as the leader, and how he operates one of the most important health providers in the U.S.

It raises the question of whether CVS is getting too big to deliver on its own promises. It now owns divisions that provide drugs to consumers as well as the big insurance company (with demands very different than its retailers).

It is up to Merlo to maintain the balance but instead he puts up a smooth front while in reality prioritizes profits over service.

FROM THE BLOG "PHARMACIST STEVE" "The title for the editorial commentary in the May issue of The Pharmacist Activist is, “I believe I am a danger to the public working for CVS.” That is a quote from a letter from an anonymous (but known to me) CVS pharmacist to a board of pharmacy.

“Subject: CVStress. All of what the anonymous pharmacist said is true, but there is more. Recently, CVS started a program where electronically sent prescriptions may be verified by another CVS store within the state. It is my feeling that eventually pharmacies will be operating without pharmacists. Everything will be done by some communications methods. I firmly believe this is what the chains want. Imagine the profits then!! This is part of the reason they are pushing to get their employees to be named to state boards of pharmacy. I’ve worked in hospitals, independents, and chains. My hours were cut and I didn’t know about it for 2 weeks until after the starting date for the change. There is no more profit sharing. No more premium pay for covering extra shifts. Our health insurance premiums have skyrocketed. Working conditions are worse than you can possibly imagine.

ANOTHER CVS PHARMACIST ON "PHARMACIST STEVE" PREDICTS THE REAL CVS GOAL IS TO FIRE VIRTUALLY ALL THE PHARMACISTS: "While all of the above causes a financial and emotional hardship for me, the real people who suffer are the patients (customers to CVS). They are not getting the care and attention they deserve. They get bombarded by text messages and phone calls almost begging them to come in and spend their money. I have no time to do anything that I know I should be doing. I never thought I’d say this, but I can’t wait until my retirement. I truly enjoyed being a pharmacist but now I’m just a highly paid robot who feels more like a liability than an asset to my employer."

It is sad that CVS turns out to be so phony. I do not believe in boycotts, because they rarely work, and some people need to go to that store, but I do believe in pointing out there are alternatives. CVS is not quite a monopoly yet. There are other drug stores, and retail outlets, for much of what it sells.

The “Focus” at CVS is not really on the customer, the patient or the employee, but on making money for investors and bureaucratic BS. That is not illegal but being a monopoly may be a violation - if a more caring government takes power in the future. CVS needs to be broken up for the public good.

The funny thing is that if this was done by the pinheads at CVS to make more profits for shareholders, which is part of their job, in my opinion it will have the opposite effect. This discourages loyal customers from doing business at CVS stores.

What do you think?