US drug wholesaler hit with $34M fine

The second largest US pharmaceutical wholesaler, Cardinal Health, has agreed to settle allegations that it violated federal reporting provisions relating to its handling of prescription drugs regulated by the Drug Enforcement Administration. Under the agreement between the company and seven US Attorney's Offices, Cardinal Health has reportedly agreed to pay $34.0 million in civil penalties for alleged violations of the Controlled Substances Act.

The DEA claimed that seven of Cardinal Health's 27 distribution facilities registered with the federal agency, failed to report suspicious orders of hydrocodone, an active ingredient of Purdue Frederick and drug major Abbott Laboratories' Vicodin (hydrocodone 10mg, paracetamol 1g) painkiller, that were then distributed to pharmacies. These, in turn, allegedly filled illegitimate prescriptions originating from "rogue" pharmacy web sites. In a statement, the DEA said: "Cardinal's conduct allowed the diversion of millions of dosage units of hydrocodone from legitimate to non-legitimate channels."

The DEA's Acting Administrator, Michele Leonhart, said that, despite "repeated attempts to educate Cardinal Health on diversion awareness and prevention, Cardinal engaged in a pattern of failing to report blatantly-suspicious orders for controlled substances filled by its distribution facilities located throughout the United States." She added that "Cardinal's negligent conduct contributed to our nation's serious pharmaceutical abuse problem." The malpractice allegedly continued after a meeting in 2005 between the wholesaler and DEA officials, where the firm was warned about "excessive sales."