Doctor concerned with health care law

Breaking news and expert analysis on legal and compliance issues

[Back To Home][Back To Archives]

From Health Law Daily, January 18, 2017

McKesson pays $150M for ‘suspicious’ opioid orders, earns severe sanctions

By Harold Bishop, J.D.

McKesson Corporation (McKesson), one of the nation’s largest distributors of pharmaceutical drugs, including controlled substances, has agreed to a pay a record civil money penalty (CMP) of $150 million for failure to design and implement an effective system to detect and report "suspicious orders" for controlled substances distributed to its independent and small chain pharmacy customers from 2008 through 2013. These included orders for oxycodone and hydrocodone pills that were unusual in their frequency, size, or other patterns.

The nationwide settlement with the Department of Justice (DOJ), on behalf of the Drug Enforcement Administration (DEA), also requires McKesson to suspend sales of controlled substances from distribution centers in Colorado, Ohio, Michigan and Florida for multiple years. The staged suspensions are among the most severe sanctions ever agreed to by a DEA registered distributor of controlled substances. The settlement also imposes new and enhanced compliance obligations on McKesson’s network of distribution centers located in Colorado, Illinois, New Jersey, Wisconsin, Florida, Michigan, Massachusetts, California, and Ohio.

Failure to adhere to 2008 settlement. According to a DOJ press release and language contained in the nationwide settlement, McKesson agreed to a $13.25 million CMP settlement in 2008 for similar violations. As a result of the 2008 settlement, McKesson developed a Controlled Substance Monitoring Program (CSMP) in which it had the duty to monitor it sales of all controlled substances and report suspicious orders to the DEA. The government’s current investigation developed evidence that after 2008 McKesson did not fully implement or adhere to its own CSNP. For example, in Colorado, McKesson processed more than 1.6 million orders for controlled substances from June 2008 through May 2013, but reported only 16 of those orders as suspicious, all of which were connected to one instance related to a recently terminated customer.

Current settlement. In addition to the CMPs and suspension of sales, the DOJ and McKesson have agreed to enhanced compliance terms for the next five years. Among other things, McKesson has agreed to enter into a 2017 Administrative Memorandum of Agreement with rigorous staffing and organizational improvements, periodic auditing, and stipulated financial penalties for failing to adhere to the compliance terms.

Critical to the settlement is a Compliance Addendum, which requires McKesson to engage an independent review organization (IRO) to monitor and assess compliance, the first IRO monitor of its kind in a controlled substance CMP settlement.

Companies: McKesson Corporation

MainStory: TopStory NewsStory DrugNews CMPNews ControlledNews EnforcementNews PrescriptionDrugNews

Back to Top

Health Law Daily

Introducing Wolters Kluwer Health Law Daily — a daily reporting service created by attorneys, for attorneys — providing same-day coverage of breaking news, court decisions, legislation, and regulatory activity.


A complete daily report of the news that affects your world

  • View full summaries of federal and state court decisions.
  • Access full text of legislative and regulatory developments.
  • Customize your daily email by topic and/or jurisdiction.
  • Search archives for stories of interest.

Not just news — the right news

  • Get expert analysis written by subject matter specialists—created by attorneys for attorneys.
  • Track law firms and organizations in the headlines with our new “Who’s in the News” feature.
  • Promote your firm with our new reprint policy.

24/7 access for a 24/7 world

  • Forward information with special copyright permissions, encouraging collaboration between counsel and colleagues.
  • Save time with mobile apps for your BlackBerry, iPhone, iPad, Android, or Kindle.
  • Access all links from any mobile device without being prompted for user name and password.