Drugstore executives indicted on bribery charges
Healthcare Auditing Weekly, January 23, 2007
Two suspended executives of CVS were indicted last week on federal charges of fraud and bribery of a former Rhode Island state legislator, raising questions about whether the pharmacy chain will be able to complete its planned--and contested--acquisition of pharmacy-benefits manager Caremark Rx.
The Providence Journal reports that CVS Senior Vice President John R. Kramer and Carlos Ortiz, the company's government affairs chief, both face a 23-count federal indictment for allegedly paying bribes disguised as consulting fees to former Rhode Island state Senator John A. Celona so the lawmaker would oppose a specific bill in 2000. Both executives have been on administrative leave since 2004.
A CVS spokeswoman told the newspaper that the Woonsocket, RI-based company was aware of the indictments and that the development would not affect the planned takeover of Caremark. CVS itself was not a target of the indictment, though it is locked in a contentious proxy battle with PBM Express Scripts for control of Caremark.
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