Cardinal center under scrutiny
Cardinal Health is facing a disciplinary action that could close one of its distribution centers near Los Angeles after the California state Board of Pharmacy earlier this year said the company failed to disclose unusually large orders of controlled substances, including painkillers.
In its complaint, scheduled to be heard by an administrative judge in January, the board contends the drug shipments “were not being used for legitimate medical purposes.”
The company disagrees with the allegations and plans on “vigorously defending this administrative case,” Cardinal corporate spokeswoman Ellen Barry said in a statement.
Cardinal “holds over 4,000 licenses with various regulatory agencies,” Barry said. “From time to time, these agencies file actions against our licenses for any alleged violations.
“We take all such allegations and actions seriously, including the action filed by the California Board of Pharmacy. However, these types of actions are routine in our industry and rarely lead to license revocation. In fact, similar actions have been pending against other (distribution) companies ... some for more than three years.”
Cardinal Health and its two main drug-distribution competitors, McKesson and AmerisourceBergen, are coming under heightened scrutiny in the wake of a 60 Minutes/ Washington Post report that aired Sunday.
Company officials anticipate the company might address shareholder questions at its annual meeting on Nov. 8 related to the report, which included allegations that Cardinal and the other distributors failed to properly monitor and report surges in painkiller shipments that contributed to the opioid epidemic.
The distributors also are facing litigation from a number of counties and municipalities in
Ohio and around the country.
In California, the pharmacy board said Cardinal’s distribution center failed to disclose a spike in orders of painkillers from Pacific Plaza Pharmacy between 2013 and 2015. The state and Cardinal could potentially reach a settlement before the January hearing.
The state can take disciplinary action including suspending or revoking the license
of the Valencia facility, in addition to recouping “reasonable costs of the investigation and enforcement.” Cardinal has eight other distribution facilities in California.
Cardinal and its rivals faced similar charges a decade or more ago and paid millions of dollars in federal fines in addition to millions more in settlements with the state of West Virginia late last year. Cardinal maintains that it has in
recent years devoted much greater resources to detecting, stopping and reporting suspicious shipments.
The company also announced this year that it plans to join with law enforcement and community organizations in Appalachia on new efforts to combat opioid abuse in the near future, but has not yet released details on that effort.