McKesson to pay $13 million-plus for failure to report suspicious sales
WASHINGTON McKesson has agreed to settle allegations that it violated federal reporting provisions relating to its handling of controlled prescription medications regulated by the Drug Enforcement Administration. Under the agreement between the company and six U.S. Attorney’s Offices, McKesson has agreed to pay $13,250,000 in civil penalties for alleged violations of its obligations under the Controlled Substances Act.
McKesson, which operates 30 DEA-registered distribution facilities, failed to report to the agency suspicious sales of controlled substance pharmaceuticals it made to pharmacies that filled orders from illegal “Internet pharmacies” that sell drugs online to customers who do not have a legal prescription. McKesson also failed to report suspicious orders of controlled substances that it received from other pharmacies and clinics even though the orders were unusually large. Every DEA registrant is required to report to the DEA any suspicious orders or the theft or significant loss of controlled substances.
Three McKesson distribution centers received and filled hundreds of suspicious orders placed by pharmacies participating in illicit Internet schemes, but failed to report the orders to DEA. They did so even after a Sept. 1, 2005, meeting at which DEA officials met with and warned McKesson officials about excessive sales of their products to pharmacies filling illegal online prescriptions.
The United States Attorneys allege that the orders that McKesson received from these pharmacies were unusually large, unusually frequent, and/or deviated substantially from the normal pattern. As a result, millions of dosage units of controlled substances were diverted from legitimate channels of distribution.
“By failing to report suspicious orders for controlled substances that it received from rogue Internet pharmacies, the McKesson Corp. fueled the explosive prescription drug abuse problem we have in this country,” said DEA acting administrator Michele Leonhart. “This civil penalty demonstrates the strong action DEA is taking to cut off the drug supply to pharmacies engaged in Internet diversion schemes.”
The civil penalty will be collected by the U.S. Attorney’s Office in each of the following districts, in the amounts indicated:
- Middle District of Florida $7,456,000
- District of Maryland $2,000,000
- District of Colorado $1,000,000
- Southern District of Texas $2,000,000
- District of Utah $544,000
- Eastern District of California $250,000
The settlement agreement is neither an admission of liability by McKesson nor a concession by the United States that its claims are not well founded.