Safeway to pay $3 million to resolve U.S. drug probe

[July 19, 2017] By Nate Raymond

(Reuters) - Safeway Inc has agreed to pay $3 million to resolve claims the U.S. supermarket chain failed to promptly report missing or stolen drugs including opioid medications at its pharmacies, the U.S. Justice Department said on Tuesday.

The settlement was announced as U.S. authorities fight a nationwide opioid epidemic, which has focused more attention on companies involved in distribution of prescription painkillers.

Safeway, a division of Albertsons Companies Inc, accepted responsibility for failing to report the missing medications in a timely manner, according to the office of U.S. Attorney Annette Hayes in Seattle, which handled the case.

"As our community struggles with an epidemic of opioid abuse, we call on all participants in drug distribution to carefully monitor their practices to stem the flow of narcotics to those who should not have them," she said in a statement.

Albertsons, one of the largest U.S. grocery chains, is backed by private equity firm Cerberus Capital Management LP [CBS.UL].

In a statement, Safeway said as part of the settlement, it will close a pharmacy at a store in Belmore, California, and will suspend filling prescriptions for controlled substances for four months at an in-store pharmacy in North Bend, Washington.

Safeway said it "remains an active partner with the DEA, local law enforcement and the communities it serves in the fight against prescription drug abuse, including the abuse of opioids."

Opioids, including prescription painkillers and heroin, killed more than 33,000 people in the United States in 2015, more than any year on record, according to the U.S. Centers for Disease Control and Prevention.

The Justice Department said the probe began in 2014 after the U.S. Drug Enforcement Administration found out Safeway pharmacies in North Bend, Washington, and Wasilla, Alaska, had failed to promptly report losing thousands of hydrocodone pills.

The pharmacies reported the losses only months later after Safeway discovered that employees had pilfered the pills, the Justice Department said.

Under federal law, pharmacies are required to notify the DEA of the discovery of a theft or significant loss of controlled substances within a single business day.

The investigation widened to review practices at all Safeway pharmacies nationally from 2009 to 2014. The probe uncovered a widespread practice of pharmacies failing to promptly report missing or stolen drugs, the Justice Department said.

In addition to paying $3 million, Safeway will also implement a compliance agreement reached with DEA to prevent future notification lapses.

(Reporting by Nate Raymond in Boston; Editing by David Gregorio and Tom Brown)

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