McKesson settles ‘suspicious’ pharmacy orders case for $150 million

McKesson has agreed to pay $150 million and suspend sales of controlled substances from distribution centers in four states to settle allegations that it failed to notice and report pharmacies’ suspicious orders of opioid painkillers.

The suspensions for the centers in Colorado, Ohio, Michigan and Florida are “among the most severe sanctions ever agreed to by a Drug Enforcement Administration (DEA) registered distributor,” according to the Department of Justice (DOJ) press release.

“When drug distributors like McKesson fail to alert the DEA of suspicious orders of prescription drugs by pharmacies, the end result can be fatal,” Acting U.S. Attorney for Colorado Bob Troyer said in a statement. “This settlement requires McKesson to comply with the law and holds the company accountable for its past conduct. Avoiding that legal obligation increases the narcotics street trade.”

It’s not the first time McKesson has had to settle these kinds of allegations. In 2008, it paid a $13.25 million settlement for similar failures to report on suspicious drug orders. The company was supposed to find an effective way to detect when unusually large or frequent orders for controlled substances are made by independent and small chain pharmacy customers.

Instead, McKesson circumvented its own compliance system, according to the DOJ. In one example, its Aurora, Colorado distribution center repeatedly raised the threshold on the number of pills ordered which would trigger a report to the DEA, either when it noticed a customer approaching that threshold or when a pharmacy requested it.

Those policies appeared to be in place between 2008 and 2013, when McKesson supplied greater and greater amounts of oxycodone and hyrdrocodone pills. In that time, 1.6 million orders for controlled substances shipped out of its Colorado facilities, but only 16 were reported as suspicious.

The settlement includes “enhanced compliance terms” for the company this time around, including appointing an independent monitor to keep track of its progress.