Pharmaceutical drug distributor McKesson Corp. — which operates distribution centers in Santa Fe Springs and elsewhere — agreed to pay a record $150 million civil penalty to resolve alleged violations of the Controlled Substances Act, the U.S. Justice Department announced Tuesday.
The nationwide settlement requires McKesson to suspend sales of controlled substances from distribution centers in Colorado, Ohio, Michigan and Florida for multiple years. The suspensions are among the most severe sanctions ever agreed to by a federally registered distributor, federal prosecutors said.
The settlement also imposes new and enhanced compliance obligations on McKesson’s distribution system.
John H. Hammergren, McKesson’s chairman and CEO, said the company is “committed to tackling this multi-faceted problem in collaboration with all parties in the supply chain that share the responsibility for the distribution of opioid medications.”
In 2008, McKesson agreed to a $13.2 million civil penalty and administrative agreement for similar violations. In the new case, the government again alleged that McKesson failed to design and implement an effective system to detect and report suspicious orders” — that were unusual in their frequency, size or other patterns — for controlled substances distributed to its independent and small-chain pharmacy customers.
From 2008 until 2013, McKesson supplied various U.S. pharmacies an increasing amount of oxycodone and hydrocodone, which are frequently misused products that are part of the current opioid epidemic, according to the Justice Department.
The government said it developed evidence that even after designing a compliance program after the 2008 settlement, McKesson did not fully implement or adhere to its own program.
In Colorado, for example, McKesson processed more than 1.6 million orders for controlled substances from June 2008 through May 2013, but reported just 16 orders as suspicious, and all of those were connected to one instance related to a recently terminated customer, according to the government.
“The company’s practices resulted in dangerous drugs being diverted from legitimate uses into the black market and helped fuel the opioid epidemic that is causing so much damage across the nation,” said Eileen M. Decker, the U.S. attorney in Los Angeles.
“This nationwide investigation will result in a landmark penalty, significant changes in the way that pharmaceutical drugs are distributed by the company, and the ability of the Department of Justice to monitor McKesson’s future conduct,” she said.
–City News Service