McKesson to pay $150m after alleged failure to report suspicious orders

By Melissa Fassbender contact

- Last updated on GMT

(Image: iStock/dptulk)
(Image: iStock/dptulk)

Related tags: Controlled substances act, Drug enforcement administration

The distribution giant, McKesson Corporation, has agreed to pay the DEA's record fine of $150m after allegedly failing to report “suspicious orders” for controlled substances.

The US Drug Enforcement Administration (DEA) announced the civil penalty for alleged violations of the Controlled Substances Act​ (CSA), today, Tuesday.

According to the DEA, the distributor supplied various US pharmacies an increasing amount of oxycodone and hydrocodone pills from 2008 until 2013.

Under the settlement, McKesson is required to suspend controlled substances sales from distribution centers in Colorado, Ohio, Michigan, and Florida for multiple years.

The staged suspensions are among the most severe sanctions ever agreed to by a DEA-registered distributor,​” said the DEA in its release.

As part of penalties, new compliance obligations will be imposed on the company’s distribution system over the next five years.

Additionally, McKesson has agreed to “specific, rigorous staffing and organizational improvements; periodic auditing; and stipulated financial penalties for failing to adhere to the compliance terms​.

Critically, the settlement will require McKesson to engage an independent monitor to assess compliance – the first independent monitor of its kind in a CSA civil penalty settlement​,” the DEA statement detailed.

DEA Acting Administrator Chuck Rosenberg, commented, "This groundbreaking resolution is tough and appropriate and underscores our commitment to hold accountable all DEA registrants, including those who distribute controlled substances​."

McKesson previously agreed to pay a $13.25 million civil penalty in 2008 for similar violations, after the government alleged it failed to design and implement a system to detect and report suspicious orders.

The government’s investigation developed evidence that even after designing a compliance program after the 2008 settlement, McKesson did not fully implement or adhere to its own program​,” the DEA stated.

In the company's statement, McKesson chairman and CEO John H. Hammergren cited the responsibility of pharmaceutical distributors in identifying and combating prescription drug abuse.

"McKesson, as one of the nation’s largest distributors, takes our role seriously​," he said. "We continue to significantly enhance the procedures and safeguards across our distribution network to help curtail prescription drug diversion while ensuring patient access to needed medications​."

The DEA and McKesson are not providing any additional comment at this time.

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