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How CVS Gets Away with What Walmart Can't

Updated on February 17, 2019

Walmart has been at the forefront of labor disputes, and the focus of well deserved righteous consumer indignation, for years now. However, it is hardly the only company failing to take care of its employees. Another enormously successful retail giant, CVS Health, isn’t treating its employees (or customers) particularly well either, but the lack of public attention means that those practices go largely unchallenged.

Walmart's new wage minimum is what CVS pays its Pharmacy Techs

Over the past year, there have been labor protests in several industries, predominately fast food and retail, pushing for an increase of the minimum wage. Earlier this year Walmart announced an increase in its minimum pay rate to $9 an hour. One group that you haven’t heard from is Pharmacy Technicians- specifically, CVS Pharmacy Technicians. These are the people that handle the medicine that may very well determine if you live or die, and their take home from what can be an incredibly stressful job is that same $9 an hour- roughly $1,000 a month after taxes. CVS techs can receive a modest pay increase by obtaining national certification, but that isn’t something that can be done overnight, and it’s still well below the national average (according to this despite the fact that CVS is one of the two largest and most profitable pharmacy chains (along with Walgreens) in the country, and had a net profit of 6.62 billion dollars in 2017. Oh, and those Techs you’re so familiar with that have been working there for years and actually make the place run? They may have started at a time when the company was paying a more livable rate, but they’ve likely had their pay rate frozen for years in the name of an artificially imposed maximum.

CVS Pharmacy Techs do not receive the breaks workers in other industries take for granted

If you work at just about any retailer or grocer, including Walmart, you are likely accustomed to receiving a half hour lunch off the clock as well as two paid 15 minute breaks per eight hour shift. This is not federally mandated, and only a few states have labor laws that require them, but workers in most industries are granted them as part of company policy. Yet, despite what is, again, a very stressful job, CVS pharmacy technicians never receive anything more than their half hour lunches (the pharmacists don’t even receive that, but their pay scale is, umm, different). That is something Wal-Mart simply can’t get away with because it has a history of labor disputes and is being watched closely by, well, everyone, and it has labor unions waiting to pounce, but very few Walmart employees ever miss their fifteen minute breaks.

Tired of long lines?  Try not CVS pharmacies.
Tired of long lines? Try not CVS pharmacies.

The understaffing is largely intentional

Most CVS customers have at some point experienced long waits in line to receive their prescriptions, and have noticed that their simply are not enough people working to do everything that needs to be done (it’s also possible that you did not notice the last part, and decided to mistreat someone horribly instead, but I digress). Not surprisingly, the poor pay and overall stress of the position do often leave CVS pharmacies with fewer Technicians than they actually need, but in most instances the reason that your CVS is understaffed at a given time is because that is the way the company wants it to be. In an effort to further minimize their payroll (underpaying people was of course the first step in that process), CVS hired efficiency experts and developed computer programs to calculate the minimum number of technicians they could use at various times of the day. Of course, those formulas don’t account for sporadic rushes as opposed to slow, steady streams of customers, extended transaction times due to an elderly clientele, or the 50 million different problems that can pop up randomly and monopolize the staff’s time, so the pharmacy staff often finds itself understaffed and overwhelmed. Walmart attempted to do the same thing; unlike CVS, however, the problem largely blew up in Walmart’s face, creating ridiculous numbers of out of stocks that alienated customers and killed sales in the process. CVS has suffered no such repercussions because customers may very well have no other choice of where to go due to their insurance (more on that later); many of them have become accustomed to the long waits, and, well, people do have to have their medicine.

Human Resources has been outsourced

If a CVS employee has a problem with their pay or benefits, or if they have some sort of complaint to file (say, a problem with a supervisor, for instance), the company’s Human Resources number (888-MY-HR-CVS) connects to a foreign call center. Can you believe a company would even begin to consider doing that? Is there any way a company could more clearly indicate just how little it cares about its employees? By contrast, Walmart actually has a two person human resources department in each Supercenter.

CVS never fixes anything

CVS creates new problems for its pharmacy staff to deal with all the time, and it never fixes any of them. The most troublesome is the automated calling system, which if you’re a CVS customer you know calls far too often and gives misleading or erroneous information. It is the most common cause of confrontation with, and undeserved mistreatment from, customers. That system leaves poorly worded messages implying that refills are ready when it’s really seeking permission to refill, and at other times it legitimately tells people that their prescription is ready when there is actually nothing in the system to be processed at the store. The staff can do nothing but apologize and suffer the consequences of something that is completely beyond their control. It seems like something that would be an easy fix, but no.

More recently, there was an attempt to synchronize customer’s 30 day refills so that they would only have to make one trip to the pharmacy each month, and, shockingly, it worked horribly. The program used abbreviated fills to line up the pick up dates that, depending on how your insurance company sets up its copays, may have cost you a full copay for the alignment fills. The fill amount also did not automatically revert to the original fill number, meaning that you may have received additional abbreviated alignment fills that would have taken your prescriptions out of alignment again. CVS will correct those problems never.

Medicare and Medicaid don't make backroom deals with pharmacies, and some smaller chains specialize in Medicare Part D coverages.
Medicare and Medicaid don't make backroom deals with pharmacies, and some smaller chains specialize in Medicare Part D coverages.

CVS/Caremark, and the backroom deals made between pharmacies and health insurance companies, represent a vertical monopoly

As many consumers are becoming increasingly aware, health insurance companies and pharmacies reach agreements each year establishing what insurance copays will be at each pharmacy chain. In many ways it’s similar to the movie studio system that was broken up under antitrust laws by the Supreme Court’s Paramount decision in 1948. At the time, the movie studios handled their own distribution, and, more importantly, owned the movie theatres themselves. So, if you lived in a town that had a Paramount theatre, the only movies that you would get to see would be the ones produced by Paramount Studios. It was rare for a town to have more than one theatre at the time, so the result was very limiting for consumers. The Paramount decision consequently forced the major studios to separate themselves from the theatre chains they controlled. In this case, your choices as a consumer are also being made for you by these agreements, as you may have very little choice than to go to your insurance company’s “preferred providers” (only one of which may be in your immediate geographic vicinity); however, it may be costing you a great deal more than just being unable to see the best movies available. This lack of choice also eliminates competition between pharmacies, allowing them to keep prices artificially high, and, as was mentioned before, further allowing them to treat consumers in whatever manner they see fit in order to enhance their own bottom line. While deals between health insurance companies and pharmacies affect every pharmacy chain, CVS’s purchase of Caremark, technically a Pharmacy Benefit Management company, is particularly egregious in that they are now very much part of the same company. However, presumably for reasons that are largely political, the Federal Trade Commission stopped its antitrust investigation of CVS several years ago.

To be clear, this is roughly the same thing.
To be clear, this is roughly the same thing.

CVS deserves much of the same evil empire treatment that Walmart has received for years; however, you’re not going to hear about protests from Pharmacy Technicians anytime soon. A work stoppage simply isn’t a possibility, as there’s a huge difference between people not being able to get their favorite brand of fast food and people not being able to get the medicine they may very well need to survive. A strike of that type could easily be characterized as morally reprehensible, and almost no one working in CVS pharmacies would even begin to consider it. Still, when you make Walmart seem like the Shangri-La of employers by comparison, maybe you need to treat people better.


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