The U.S. Attorney's Office for the District of New Jersey and DEA announced that one of the nation's largest pharmaceutical distributors agreed to pay a record $150 million civil penalty for alleged violations of the Controlled Substances Act. The government alleged that the distributor failed to design and implement an effective system to detect and report suspicious orders of controlled substances shipped to its independent and small chain pharmacy customers.
This was not the company's first such resolution. In 2008 it had agreed to a $13.25 million civil penalty and an administrative agreement for similar alleged violations. The government's investigation developed evidence that, even after designing a compliance program following that earlier settlement, the distributor did not fully implement or adhere to its own program.
The multi-district investigation involved DEA field divisions in Boston, Chicago, Denver, Detroit, Miami, Newark, San Francisco, St. Louis and the Washington District Office. U.S. Attorneys' Offices in Colorado and the Northern District of West Virginia, together with DEA's Office of Chief Counsel and Diversion Control Division, led the civil settlement negotiations.
Beyond the monetary penalty, the nationwide settlement requires the distributor to suspend sales of controlled substances from distribution centers in Colorado, Ohio, Michigan and Florida for multiple years, described as among the most severe sanctions ever agreed to by a DEA-registered distributor. The company also agreed to five years of enhanced compliance terms, including staffing and organizational improvements, periodic auditing, stipulated financial penalties for non-compliance and an independent monitor, the first of its kind in a Controlled Substances Act civil penalty settlement.