Florida Record

Sunday, March 29, 2020

McKesson reaches $150M settlement over alleged violations

By Sara McCleary | Jan 27, 2017

Law money 07

LAKELAND, Fla. — One of the largest distributors of pharmaceutical drugs in the United States has agreed to a landmark settlement, according to a report on Street Insider.

McKesson Pharmaceutical will pay a $150 million civil penalty for allegedly violating the Controlled Substances Act. The settlement came about nine years after McKesson agreed to a $13.25 million penalty for similar violations of the Act.

As part of the 2008 settlement, McKesson was to design a compliance program, but a government investigation found evidence that the company did not fully adhere to the program it developed, which was meant to detect and report instances of “suspicious orders” of controlled substances by independent and small-chain pharmacies. McKesson, the government alleged, continued to supply some pharmacies a growing amount of oxycodone and hydrocodone pills between 2008 and 2013.

For example, investigators found that between June 2008 and May 2013, McKesson’s distribution center in Colorado processed more than 1.6 million orders of controlled substances, but only 16 orders were reported as suspicious. Similarly, the investigation determined that McKesson’s center in Lakeland, Florida, filled significantly larger orders for hydromorphone than they had in the past, but failed to report the pharmacies’ orders.

This settlement is another step in the government’s ongoing fight against abuse of prescription drugs.

“Together with the $22 million civil settlement with CVS in 2015 and the $44 million civil settlement with Cardinal Health last year, this settlement demonstrates our willingness to use all remedies at our disposal to encourage corporations and individuals involved in the prescription opioid trade to act responsibly and to punish them when they fail to do so,” U.S. Attorney A. Lee Bentley said in a Jan. 17 news release from the Department of Justice's Middle District of Florida.

The settlement will affect four of McKesson’s 29 distribution centers. In one of the most severe sanctions agreed to by a registered pharmaceutical distributor, McKesson’s centers in Colorado, Ohio, Michigan and Florida will see staggered suspensions of sales of controlled substances.

Regarding the Florida distribution center specifically, “the Lakeland, FL [distribution center] will be suspended for one year from distributing hydromorphone only (not all controlled substances),” Kristin Hunter, the company’s media-relations contact, said in an email interview with the Florida Record.

“There will be no change to the distribution of non-controlled pharmaceutical and over-the-counter products… We do not anticipate any job losses as a result of the operational impacts at this time,” she said.

“McKesson is committed to working with the (Drug Enforcement Administration) on an ongoing basis to identify new ways to prevent misuse of controlled substances,” according to the company's news release about the settlement. “As part of the settlement agreement reached, McKesson and the DEA plan to meet regularly over the next five years to ensure ongoing alignment.”

The Department of Justice did not respond to requests for comment in time for this article's publication.

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Organizations in this Story

U.S. Drug Enforcement AdministrationU.S. Department of JusticeMcKesson Corporation