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

[January 18, 2017]  By Nate Raymond

(Reuters) - 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 statement.

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.

(Reporting by Nate Raymond in New York; additional reporting by Eric Beech in Washington; Editing by Bernard Orr)

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