For many Americans, pharmacies have been a trusted source of advice and essential products amid the uncertainty of the ongoing public health crisis, and members of the National Association of Chain Drug Stores continue to play a vital role in local communities. But in the eyes of those looking to exploit the pandemic for their own gain, pharmacies have become a prime target, where criminals steal in-demand over-the-counter medication and other health products only to resell those items anonymously online to unassuming consumers. It’s a growing problem known as organized retail crime that Congress can and should help solve.
The criminals going after local drug stores are not typical shoplifters. Last year, asset protection teams at CVS Pharmacy — working side by side with Walgreens, Rite Aid and law enforcement officials —uncovered a massive theft operation. A criminal network stole $50 million in health and beauty products across the Bay Area and Northern California — one of the largest organized retail crime incidents in U.S. history.
ORC networks such as these take advantage of a lack of verification processes on e-commerce platforms to sell their stolen goods to unwitting customers. Through the use of nameless, faceless profiles, criminal organizations are able to easily set up shop online and sell to consumers who don’t realize they might be purchasing products that could be expired and potentially dangerous.
ORC poses a grave risk to consumer health and safety. According to a Congressional Research Service report, stolen health and beauty products can end up in warehouses for prolonged periods of time before being repackaged and sold back to unwary consumers — sometimes long past their own expiration date.
In addition to stolen goods, counterfeits are also running rampant on e-commerce platforms. Criminals will set up fake accounts to sell knockoff items on third-party marketplaces. Action is desperately needed to curb the flow of this illicit merchandise, especially for health and beauty products such as masks and razor blades that are targeted for their high resale values online.
With the help of more than 900 supplier partners, NACDS members have been able to continuously offer the products that are needed by consumers since the beginning of the pandemic. Unlike items sold by ORC networks lurking on e-commerce platforms, customers can rest assured that pharmacies have taken steps to help ensure the products’ legitimacy — whether they were purchased online or at a brick-and-mortar location.
Finding a way to protect consumers from ORC networks matters now more than ever as criminals sell tampered and knockoff cleaning supplies, N95 masks and hand sanitizer on the internet. While most Americans looked for ways to help one another last year, these thieves looked to e-commerce sites as a way to peddle stolen merchandise to unsuspecting consumers. We must protect customers as we enter the next stage of our fight against this deadly pandemic.
Fortunately, legislation has been proposed that would help keep pharmacies and consumers safe from these criminal networks. The INFORM Consumers Act, expected to be introduced soon in both the U.S. House and Senate, would require e-commerce marketplaces to provide basic information and contact details on third-party sellers. It’s a bipartisan step toward accountability that is welcomed by NACDS members. During our virtual fly-in last week, I discussed with lawmakers how the bill would go a long way in promoting transparency and protecting consumers.
Communities nationwide are thankful for everything that NACDS chain and supplier members’ teams have done for the ultimate good of the American consumer. And as our nation continues to accelerate efficient and equitable COVID-19 vaccinations as vaccine supply becomes more available, so do pharmacies. But we call on Congress to keep customers safe from organized retail crime, an increasing threat to their health and safety. The stakes are just too high.
Steven C. Anderson is president and chief executive officer of the National Association of Chain Drug Stores, an industry that has annual sales of more than $1 trillion, employs more than 3.2 million individuals and works with suppliers and other partners to help meet the health, wellness and daily needs of patients and consumers across America.
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