MCK McKesson Corporation

By Jeanne Whalen 

McKesson Corp. will pay the U.S. government $150 million to settle allegations that it failed to properly oversee shipments of drugs, including opioid painkillers, between 2008 and 2013, federal agencies said.

The settlement also requires McKesson to suspend sales of controlled substances from its distribution centers in Colorado, Ohio, Michigan and Florida "for multiple years," the Justice Department and Drug Enforcement Administration said in statements Tuesday.

A government investigation found evidence that McKesson "did not fully implement or adhere to" its own rules for detecting and reporting to the DEA suspiciously large or frequent orders for drugs it distributed to independent and small pharmacies, the statements said.

Widespread abuse of powerful opioids, including prescription painkillers, has pushed overdose death rates in the U.S. to all-time highs, spurring concerns about how drugs are distributed around the country.

McKesson said it agreed to settle "in the interest of moving beyond disagreements about whether it was complying with the controlled substance regulations during the applicable period and to instead focus on the company's partnership with regulators and others to help stem the opioid epidemic."

The settlement follows a deal struck late last year with Cardinal Health Inc., which agreed to pay the government $44 million to settle similar alleged violations.

"According to the settlement agreement, Cardinal admitted that from January 1, 2009 to May 14, 2012, it failed to report suspicious orders to the DEA as required by the CSA," the Justice Department said in a December statement.

Cardinal said the settlement allowed it "to move forward and continue to focus on working with all participants in addressing the epidemic of prescription drug abuse."

Drug distributors have also come under scrutiny at the state level for their handling of opioids. Earlier this month, Cardinal Health and drug distributor AmerisourceBergen agreed to pay West Virginia a total of $36 million to settle the state's allegations that they failed to control their distribution of prescription drugs including painkillers.

West Virginia said it would use the money to fund drug-abuse prevention and treatment programs.

"While the company denies the state's allegations, Cardinal Health recognizes that the epidemic of prescription drug abuse is a multifaceted problem driven by addiction and demand," Cardinal Health said in a statement.

In an emailed statement about the West Virginia settlement, AmerisourceBergen said: "With this matter settled, we look forward to focusing our full attention on continuing to work diligently with regulatory agencies and our partners throughout the supply chain to combat diversion and support appropriate access to medications."

Write to Jeanne Whalen at jeanne.whalen@wsj.com

(END) Dow Jones Newswires

January 17, 2017 21:02 ET (02:02 GMT)

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