So when I worked at CVS all our controls came from Cardinal. Are there CVS’ that there controls from CVS?
It depends on how the state is organized, it is quite possible that they came from CVS but stored and delivered at Cardinal (Both Walgreens and Walmart do it that way for certain drugs). For the way that the "I am the distributor but I store elsewhere", McK, ABC, and Cardinal have deals with each of the Big Pharmacies that a pharmacy company can buy some massive lot run from a manufacturer, but instead of storing it in their warehouses, they hire McK to hold it for them and send when it's time. So, when you're buying from Cardinal, you're "paying" Cardinal like $5 a bottle, then Cardinal turns around and buys from CVS Distributors for $4.50 a bottle, keeping $0.50 for the storage and transport. What physically happens though is that Mallinckrodt transports a bottle of Hydrocodone/APAP 5 to Cardinal and then Cardinal transports to your pharmacy. What finacially happens is that Mallinckrodt sells to CVS Distributors, CVS Distributors either hires their own trucks or hires Cardinal to transport from Mallinckrodt to the staging point (this is called carriage), the staging point has a fixed cost of rent which either is CVS itself or Cardinal (in your case, Cardinal), and then when CVS Pharmacy buys from CVS Distributor's stock of that drug, Cardinal handles the transaction for a fee.
The other issue is that some pharmacies have to register as "distributors" over the 5% rule, which quite a number of FL pharmacies had done.
You can just think of the massive ways you can game that system to screw over insurance companies. In fact, they all do so (remember the repackaging NDC cost shifts)? That was McK's idea widely copied by everyone.
Aside question, did Brushwood, Hartzema, or Hepler teach any of this to you all? They certainly know what was going on, but whether they were on autopilot or not is a whole different story.