Kusserow’s Corner: Walgreens Agrees to the Largest DEA Settlement in History

A lot has been written about Department of Justice (DOJ) and HHS Office of Inspector General (OIG) related investigations and settlements in the health care industry.  We have been reminded that there are other enforcement agencies operating in this arena.  The Drug Enforcement Agency (DEA) announced that Walgreens has agreed to a settlement of $80 million in connection with one of its investigations conducted in conjunction with the DOJ for Civil Penalties under the Controlled Substances Act (the Act).  The settlement is the largest in DEA history and is part of its strategy of cracking down on rampant prescription drug abuse by targeting large corporations.  Walgreens is the nation’s largest drug store chain.  This settlement was reached in response to a DEA and DOJ investigation of the Walgreens Jupiter Distribution Center and six retail pharmacies in Florida.  The settlement resolves allegations that Walgreens committed an unprecedented number of record-keeping and dispensing violations under the Act and that the pharmacy negligently allowed painkillers to make their way onto the black market.

Walgreens admitted that it failed to uphold its obligations as a DEA registrant regarding the above-described conduct. Furthermore, Walgreens has agreed to create a Department of Pharmaceutical Integrity to ensure regulatory compliance and prevent the diversion of controlled substances. Walgreens has also agreed to enhance its training and compliance programs, and to no longer monetarily or otherwise compensate its pharmacists based on the volume of prescriptions filled.

According to documents filed by the DEA and the DOJ, Walgreens negligently allowed controlled substances listed in Schedules II – V of the Act, such as oxycodone and other prescription pain killers, to be diverted for abuse and illegal black market sales. The settlement agreement covers conduct that was the subject of DEA’s administrative actions and the DOJ investigation. In addition to the financial penalties, the settlement prevents the named facilities from distributing or dispensing controlled substances listed in Schedules II – V for two years, ending in 2014.

According to government data, overdose deaths from painkillers totaled more than 16,500 in 2010.  The most recent report from the Centers for Disease Control and Prevention (CDC) stated that prescription drug overdose deaths exceeded motor vehicle deaths and deaths from illegal street drugs, such as cocaine, heroin, and amphetamines, in 2009. Oxycodone is a powerful addictive narcotic that is one of the most abused prescription medications in Florida and throughout the United States. The Walgreens Distribution Center in Jupiter, Florida was reported as the largest supplier of oxycodone to retail pharmacies in the State of Florida.

In announcing the settlement, the DEA stated the settlement should send out a clear message that all pharmacies will be held accountable when they violate the law and threaten public health and safety. They are continuing similar investigations with other pharmacies registered with the DEA as part of their combat of pharmaceutical drug abuse.

This is also a reminder that the DEA maintains its sanction listing that is separate and apart from the OIG List of Excluded Individuals and Entities (LEIE).   Most of those listed are physicians and pharmacies that violate the Controlled Substance Act.

Richard P. Kusserow served 11 years as the DHHS Inspector General and currently is CEO of the Compliance Resource Center (CRC), including Sanction Screening Services (S³), which provides sanction screening tools, including those listed by the Drug Enforcement Agency; and also provides full outsourcing of sanction screening.  For more information, he can be contacted at rkusserow@strategicm.co.

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Copyright © 2013 Strategic Management Services, LLC.  Published with permission.