Speaker 1: Bloomberg Audio Studios, podcasts, radio news.
Speaker 2: If you've been stuck at home sick, chances are you
Speaker 2: may have been tempted to get well everything that the
Speaker 2: drug store offers there.
Speaker 3: I'm gonna go to CVS's website, and.
Speaker 2: If you've gone to the store or tried to order
Speaker 2: medicine online, and.
Speaker 3: I'm going to look at cold and flu medicine.
Speaker 2: You might have noticed a trend over the last few years.
Speaker 4: It looks like there's a lot of familiar name brands.
Speaker 4: There's Mucinex and Pseudofed. Then there's also just a lot
Speaker 4: from CVS.
Speaker 2: Health store brand medicine with major drug store labels on
Speaker 2: the packages that look a lot like their name brand competitors.
Speaker 4: CVS Health Chest congestion relief seems to be everywhere, swirling
Speaker 4: down a bit.
Speaker 3: Here, there's CVS Health Effervescent.
Speaker 2: Cold relief from cof serr up, there's.
Speaker 3: Robotussin, and right next to that CVS Health Tussin.
Speaker 2: To allergy medication.
Speaker 3: Allergy medicine, there is Civus Health.
Speaker 4: Allergy Relief looks a lot like Zero Tech in terms
Speaker 4: of the packaging, but in a.
Speaker 2: Few important ways they're different.
Speaker 4: I think like the biggest name and in acids is Tums.
Speaker 4: There's that kind of like signature clear bottle with the
Speaker 4: blue top. They have those here. There is also, for
Speaker 4: you know, several dollars less, the CVS Health version of
Speaker 4: n acid tablets with a very similar bottle, that kind
Speaker 4: of clear bottle with a blue top.
Speaker 2: And like a lot of people, I've been tempted by
Speaker 2: the cheaper prices of store brand drugs, but Bloomberg's and
Speaker 2: Ednie told me I might want to do more than
Speaker 2: just look at the price.
Speaker 1: You often don't know who are making these brands. This
Speaker 1: drug store is not making their own store brands. They
Speaker 1: don't have their own manufacturing site. They hire someone to
Speaker 1: do that for them. And you it doesn't say on
Speaker 1: the box who does.
Speaker 2: That, even though it doesn't say it on the box.
Speaker 2: And it got to digging, and what she found out is,
Speaker 2: and I don't say this lightly, pretty astonishing. Today on
Speaker 2: the show The Underside of store brand Drugs and the
Speaker 2: laws that shield pharmacy chains from liability, I'm David Gurra,
Speaker 2: and this is the big take from Bloomberg News. Our
Speaker 2: story begins about a decade ago. That's when Anna says
Speaker 2: major drug stores around the US started changing their strategy
Speaker 2: to make more generic pharmaceuticals like those CVS Health and
Speaker 2: ACIDS I saw.
Speaker 1: CVS specifically has tried to boost their store brand drugs
Speaker 1: the last several years because one of the biggest things
Speaker 1: about these products is they offer higher margins for the company.
Speaker 2: Higher margins. In other words, these store brand drugs make
Speaker 2: companies like CVS a pretty good profit. Anna says that
Speaker 2: around when big pharmacy chains were introducing these new offerings,
Speaker 2: she was covering the Food and Drug Administration for Bloomberg,
Speaker 2: and the influx of store brand drugs caught her attention
Speaker 2: because she was spending a lot of time looking at
Speaker 2: the FDA's inspection reports.
Speaker 1: I noticed a lot of their inspection reports when they
Speaker 1: would send inspectors to places that were making drugs for
Speaker 1: the US in India and China were disturbing. There were
Speaker 1: a lot of issues with sanitation and hiding data that
Speaker 1: might not show the best results for these drugs and
Speaker 1: the quality of these drugs.
Speaker 2: But these factories were not exactly household names, and Anna
Speaker 2: says it was pretty hard to figure out which US
Speaker 2: companies were contracting with these manufacturers. But about a year ago,
Speaker 2: Anna had a breakthrough when the FDA started recalling eye drops.
Speaker 1: I was curious because there have been a in the
Speaker 1: last a little over a year, there have been a
Speaker 1: lot of eye drop recalls, specifically, you know, and some
Speaker 1: of these early on resulted and really bad eye infections
Speaker 1: and even death for some people.
Speaker 2: Deadly eye drops terrifying on all accounts. So Anna did
Speaker 2: what she normally does, and she looked at the FDA's
Speaker 2: website to see which facilities the agency had inspected as
Speaker 2: a result of the recalls.
Speaker 1: So the Food and Drug Administration clearly got interested in
Speaker 1: wanting to check up on other eye drop makers and
Speaker 1: make sure they were doing things the right way. And
Speaker 1: so when they started inspecting these other places, they found
Speaker 1: issues that caused them great concern. These were manufacturers in India.
Speaker 1: One of the main ones is called Killich and they
Speaker 1: made store brand drugs for CBS and others.
Speaker 2: That is when it clicked for Anna. While it had
Speaker 2: been nearly impossible to know who was making a store
Speaker 2: brand drug, these recalls and the subsequent inspections were all
Speaker 2: public on the FDA's website, so for the first time
Speaker 2: she could link the manufacturing site of a recalled drug
Speaker 2: or eye drop with a store brand.
Speaker 1: I realized in this database there was a way for
Speaker 1: me to find that, to search that way and to
Speaker 1: kind of parse the data. I wondered, hey, like, I
Speaker 1: feel like CBS has shown up in a lot more
Speaker 1: of these recalls than others, Like could that be a pattern?
Speaker 1: And so that's what I set out to see.
Speaker 2: So Anna started crunching the numbers, and it turned out
Speaker 2: over the last decade, CBS had more than twice as
Speaker 2: many recalls for its store brand drugs as Walgreens. That
Speaker 2: works out to a little over one recall a month
Speaker 2: over the last ten years. But she wanted to double
Speaker 2: check her math to make sure there wasn't something she
Speaker 2: was missing about CBS versus its competitors.
Speaker 1: I wanted to make sure, you know, there wasn't some
Speaker 1: reason for this, you know, do they sell more of
Speaker 1: these store brand drugs or something like that. But Walgreens
Speaker 1: and CBS have about the same number of health and
Speaker 1: wellness products. They're about two thousand for each company, so
Speaker 1: there wasn't a big difference there. And then I also
Speaker 1: look at the companies they were hiring and found that
Speaker 1: CBS was working with a lot more companies that were
Speaker 1: getting dinged by the FDA as well.
Speaker 2: In other words, CBS was choosing manufacturers with a history
Speaker 2: of safety issues more frequently than say it's biggest rival, Walgreens.
Speaker 2: Who are these third party manufacturers you mentioned, Yeah, there
Speaker 2: are a lot of them overseas, a lot of them
Speaker 2: in India specifically making generic drugs.
Speaker 1: And then there were some that had issues that CBS
Speaker 1: had hired as well in the US. But these are
Speaker 1: usually smaller companies that you haven't heard of before. They're
Speaker 1: not going to always be big name generic drug companies.
Speaker 2: Even some of these recalls revealed some striking violations. One
Speaker 2: made drugs for kids that were too potent.
Speaker 1: I did come across one that was also making pesticides,
Speaker 1: even on the same machines as drugs.
Speaker 2: Those drugs included nasal sprays for and there's more.
Speaker 1: It came across a few instances where they were using
Speaker 1: dirty water essentially like contaminated water to make the drugs.
Speaker 1: They found a ton of like mold colonies in this
Speaker 1: water that was right near these drugs that were being produced.
Speaker 2: That one was making CVS branded pain and fever medications
Speaker 2: also for children, and it wasn't just the machines. The
Speaker 2: FDA's inspection reports the facilities also turned up issues with
Speaker 2: workers cleanliness.
Speaker 1: There was one where they were making eye drops. There
Speaker 1: were workers in a sterile area that were working barefoot
Speaker 1: and you know, didn't have clean uniforms on.
Speaker 2: It's shocking stuff, and it raised questions about what's going
Speaker 2: on with store brand drugs at all of the big pharmacies,
Speaker 2: but also at CVS in particular.
Speaker 4: After you did your reporting, were you able to determine
Speaker 4: why CBS is an outlier?
Speaker 1: I think that's a great question. They answered some questions
Speaker 1: from me through email by didn't go into great detail
Speaker 1: or let me talk to anyone there.
Speaker 2: CVS sent Anna a statement.
Speaker 1: The company said the store brand drugs quote are designed
Speaker 1: to maximize quality and safety. Work is intended comply with
Speaker 1: regulations and satisfy customers end quote.
Speaker 2: But that didn't really answer her questions about CVS or
Speaker 2: about any other big pharmacy that's used one of these
Speaker 2: facilities to make store brand drugs. Because the thing is,
Speaker 2: all this information isn't secret, It's right there on the
Speaker 2: FDA's website.
Speaker 1: Why don't the big pharmacies know this is going on?
Speaker 1: There if the FDI can walk in and see it.
Speaker 2: Coming up after the break, a key loophole that allows
Speaker 2: big pharmacies to play by different rules and how you
Speaker 2: can identify products that could be questionable. So to recap
Speaker 2: Bloomberg's Anna Edny analyzed all the FDA's recall reports for
Speaker 2: store brand drugs from the big three pharmacies from CVS, Walgreens,
Speaker 2: and Walmart over the last decade, and she was able
Speaker 2: to connect the facilities that manufactured store brand drugs that
Speaker 2: had been recalled with which big pharmacies had contracted with them.
Speaker 2: And Anna found that CVS store brand drugs, basically the
Speaker 2: pharmacy chains versions of drugs like tylanol or thums, were
Speaker 2: being recalled more often than its competitors, including Walgreens or Walmart,
Speaker 2: and Anna wanted to know why was this happening at all.
Speaker 1: I did talk to a professor at Stanford, Kevin Schulman,
Speaker 1: and he's looked into the industry a lot. His concern
Speaker 1: is that essentially buyers of these drugs are looking to
Speaker 1: save money because many Americans assume it's a generic, is
Speaker 1: a is a generic like it's you know, doesn't matter
Speaker 1: which one you buy so which one's cheapest, and that's
Speaker 1: what we're going to go with, and that keeps driving
Speaker 1: the prices down. And he said that essentially you have
Speaker 1: to cut corners, as the company then somewhere to make
Speaker 1: that price, and where they are cutting the corners is
Speaker 1: on quality.
Speaker 2: To break that down. Essentially, because a lot of us
Speaker 2: assume one generic drug is the same as a name
Speaker 2: brand drug. It's the same active ingredient, we tend to
Speaker 2: gravitate to the least expensive one on the shelf. So
Speaker 2: if a company like CVS or Walgreens or Walmart wants
Speaker 2: its brand to be competitive, lowering the price is a
Speaker 2: clear way to do that. There's also something else helping
Speaker 2: them compete.
Speaker 1: So the CVS store brand and the other store brand drugs,
Speaker 1: they seem to have sort of a loophole.
Speaker 2: Basically, the rules for the likes of advil or motrin
Speaker 2: or thumbs are more stringent.
Speaker 1: They have to follow this guidance by the FDA, which
Speaker 1: gives them an idea of how they should be operating,
Speaker 1: how they should be making sure that what they're putting
Speaker 1: on the shelves still meets the quality standards that they're
Speaker 1: supposed to meet. And you know, they can't put anything out.
Speaker 1: They can't say, oh, we didn't know because we didn't
Speaker 1: make it. They have to assure when they put that
Speaker 1: product on the shelf that it's a quality product.
Speaker 2: But when big name pharmacies use contract manufacturers to make generics,
Speaker 2: they're not beholden to the same regulations.
Speaker 1: The loophole for the store brand drugs is that they
Speaker 1: are considered a private labeled distributor.
Speaker 2: And this is where problems can crop up. Well, first,
Speaker 2: it helps to understand the difference between say the CVS
Speaker 2: Health brand pain killer and motrin.
Speaker 1: So it needs to have ibuprofen in it, but it
Speaker 1: also can have different inactive ingredients. So you know, the
Speaker 1: pill takes a lot of other things to make it,
Speaker 1: you know, mashed together essentially solvents to make it all
Speaker 1: come together and to make it stick together, and you know,
Speaker 1: colors and things like that. But those inactive ingredients can
Speaker 1: have an effect on sometimes on how your body reacts
Speaker 1: to it, how your body digests it, and how it
Speaker 1: works for you.
Speaker 4: So who is responsible then for guaranteeing that they are
Speaker 4: safe and effective? Is that the job of the US
Speaker 4: pharmacy chain is the job of the FDA, who's doing
Speaker 4: that work, if.
Speaker 1: Anyone, so, in this instance, it would be the company
Speaker 1: that the pharmacy chain contract manufactures with.
Speaker 4: Because the ultimate responsibility for the quality of any of
Speaker 4: these store brand drugs lies with the contract manufacturer.
Speaker 1: The pharmacy chain kind of gets to look the other
Speaker 1: way and say, we put it on the shelf, We
Speaker 1: admit that, but we don't know. We don't assure the
Speaker 1: quality in there in the same way.
Speaker 2: And as for the FDA, well, even though the agency
Speaker 2: issues these inspection reports, they only happen after a drug
Speaker 2: or a product has been reported for having an issue.
Speaker 2: It's reactive, not proactive.
Speaker 1: They don't test drugs themselves on any large sort of scale,
Speaker 1: and certainly not over the counter medications. It's not a
Speaker 1: closely regulated industry.
Speaker 4: You've done all of this reporting, and I wonder if
Speaker 4: this has changed the way that you yourself decide what
Speaker 4: to buy when you go to the pharmacy.
Speaker 1: Yes, it does. I was just purchasing eye drops, and
Speaker 1: I did get the brand name Visian eye Drops, but
Speaker 1: I tried not to be too crazy about it, because
Speaker 1: you could go nuts just trying to figure out what
Speaker 1: would be safe for you and your Family.
Speaker 2: This is the Big Take from Bloomberg News.
Speaker 4: I'm David Gura. This episode was produced by David Fox.
Speaker 4: It was edited by Aaron Edwards and Rebecca Greenfield. It
Speaker 4: was mixed by Alex Sagura. It was fact checked by
Speaker 4: Audreana Tapia. Naomi Shaven and Kim Gittleson are our senior producers.
Speaker 4: Our senior editor is Elizabeth Ponso. Nicole Beemster Bor is
Speaker 4: our executive producer. Sage Bauman is Bloomberg's head of podcasts.
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Speaker 2: Thanks so much for listening. We'll be back tomorrow.