Drug company that ‘fueled’ opioid epidemic in Kentucky to pay $150M

LEXINGTON, Ky. — One of the nation’s largest pharmaceutical distributors allegedly failed to report suspicious orders in Kentucky and elsewhere, contributing to a spike in abuse of painkillers called opioids, federal authorities have charged.

McKesson Corp. agreed to pay a $150 million penalty for alleged violations of federal drug law, the U.S. Justice Department announced Wednesday. The case was a civil, not criminal, matter.

The settlement resolves an investigation of a McKesson distribution center in Ohio by the U.S. Drug Enforcement Agency office in London and the U.S. Attorney’s Office for the Eastern District of Kentucky, based in Lexington, according to a news release.

The deal also resolves investigations by 11 other U.S. Attorney’s Offices.

“McKesson’s failure to report suspicious orders fueled the opioid epidemic in Eastern Kentucky,” said Carlton S. Shier, IV, acting U.S. Attorney for the Eastern District of Kentucky. “Opioid abuse has devastated our community, and the investigation of drug distributors, like McKesson, is one aspect of the United States’ multifaceted fight against this epidemic.”

Federal authorities said the drug orders at issue were suspicious because they were unusual in frequency, size or other patterns.

McKesson agreed in 2008 to pay $13.25 million for similar violations, but the federal investigation showed that the company didn’t fully implement or follow the compliance program it developed after that settlement.

McKesson supplied drugs to independent pharmacies and small chains. From 2008 to 2013, the company shipped an increasing amount of oxycodone and hydrocodone pills, which are frequently misused, according to the federal news release.