McKesson in record $150 mln U.S. settlement over suspicious drug orders

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By Nate Raymond

<span class="articleLocation”>McKesson Corp, one of the largest U.S.
distributors of pharmaceutical drugs, will pay a record $150
million to resolve a U.S. investigation into whether it failed
to report suspicious orders of addictive painkillers.

Tuesday’s deal with the U.S. Justice Department followed an
earlier settlement with the company over similar violations in
2008. The latest accord came as U.S. authorities continue to
grapple with the nation’s opioid drug epidemic.

“The consequences of McKesson’s decision to circumvent its
obligations are too devastating to ignore and warrant today’s
punishment,” New Jersey U.S. Attorney Paul Fishman, whose office
was involved in the deal, said in a statement.

Under the settlement, San Francisco-based McKesson must on a
staggered basis suspend sales of controlled substances from
distribution centers in Colorado, Ohio, Michigan and Florida for
several years.

It will also be subject to new and enhanced compliance
obligations and be required to hire an independent monitor to
assess compliance, a first of its kind arrangement under a
Controlled Substances Act civil penalty settlement.

McKesson in a statement said it has implemented significant
changes to its monitoring and reporting processes and was
committed to combating prescription drug diversion and abuse.

“We are 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,”
McKesson Chief Executive Officer John Hammergren said in a

Each day about 78 Americans die of an opioid overdose,
according to authorities. Oxycodone, a big source of profit for
drug dealers, is abused by over 13 million Americans annually,
prosecutors say.

Tuesday’s accord came after McKesson in 2008 reached a
$13.25 million settlement resolving claims that it failed to
design and implement an effective system to detect and report
suspiciously large or frequent orders.

The Justice Department said that following that deal, from
2008 until 2013, McKesson supplied various pharmacies an
increasing amount of oxycodone and hydrocodone pills, both
opioid drugs that are frequently misused.

The Justice Department said the evidence showed that
McKesson did not fully implement or adhere to its own compliance
program designed after the 2008 settlement.

As one example, the Justice Department said that in
Colorado, McKesson processed over 1.6 million orders for
controlled substances from June 2008 through May 2013, yet only
reported 16 as suspicious. (Additional reporting by Eric Beech in Washington)

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