CVS execs indicted on bribery charges

Two suspended executives of CVS were indicted Thursday 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. CVS Senior Vice President John R. Kramer and Carlos Ortiz, the company's government affairs chief, face a 23-count federal indictment for allegedly paying bribes disguised as consulting fees to former Rhode Island state Senator John A. Celona (photo) so the lawmaker would oppose a specific bill in 2000. Both executives have been on administrative leave since 2004.

A CVS spokeswoman told the Providence Journal 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.

For further details:
- read the U.S. attorney's press release (.pfd)
- check out the Providence Journal article

Related Articles:
CVS to acquire Caremark Rx. Report

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