Walgreens to pay $80 million for oxycodone violations

Donna Leinwand Leger | USA TODAY

Walgreens, the nation's largest drugstore chain, will pay $80 million in fines to end a DEA probe into allegations it allowed millions of controlled substances, including the highly addictive painkiller oxycodone, to reach the black market.

The settlement is the largest civil penalty paid under the Controlled Substances Act in Drug Enforcement Administration history, U.S. Attorney Wifredo Ferrer said Tuesday.

Walgreens committed "an unprecedented number" of record-keeping and dispensing violations, Ferrer said.

In September, the DEA accused Walgreens of endangering public safety and barred the company from shipping oxycodone and other controlled drugs from its Jupiter, Fla., distribution center. The distribution center was the largest supplier of oxycodone to retail pharmacies in Florida, the DEA said.

"The distribution centers are the first line of defense," Ferrer said.

As part of the settlement, the DEA suspended the controlled substance licenses for Walgreens' Jupiter distribution center until September 2014 and six of its Florida pharmacies until May 2014. The company has more than 800 pharmacies in Florida.

The settlement also closes similar investigation in Colorado, Michigan and New York, Ferrer said.

"As the largest pharmacy chain in the U.S., we are fully committed to doing our part to prevent prescription drug abuse," Kermit Crawford, president of Walgreens' pharmacy, health and wellness division, said in a statement. "We also will continue to advocate for solutions that involve all parties – including leaders in the community, physicians, pharmacies, distributors and regulators – to play a role in finding practical solutions that combat the abuse of controlled substances and ensure patient access to critical medications.

Walgreens has taken steps to enhance its ordering and inventory systems and train its employees "to ensure appropriate dispensing of controlled substances," Crawford said. Walgreens said it expects the fine to impact its stock 4 to 6 cents per share in the third quarter. Walgreens stock (WAG) closed down 11 cents at $49.54 a share Tuesday.

The Centers for Disease Control and Prevention has called abuse of prescription narcotics, particularly opioid pain relievers, an epidemic.

The DEA had previously revoked controlled substances licenses for two Florida CVS pharmacies. In October, Cardinal Health paid $34 million to settle claims it failed to report suspicious sales of painkillers. Since 2009, federal authorities have charged 51 doctors with controlled-substance violations and 192 doctors have voluntarily surrendered their DEA licenses.

The DEA said Walgreens failed to maintain proper controls to ensure it did not dispense drugs to addicts and drug dealers. The DEA requires drug distributors to notify the agency of unusually large or frequent retail pharmacy orders for controlled drugs.

Ferrer called Walgreens' failure to report suspicious orders a "systemic practice that resulted in tens of thousands of violations."

Six of Walgreens' Florida pharmacies ordered more than a million pills a year, the DEA said. In 2011, the average pharmacy in the U.S. ordered 73,000 oxycodone tablets a year. Pharmacists dispensed prescriptions from doctors even when Walgreens computer system flagged the doctors as problematic, Ferrer said.

One pharmacy in Fort Myers went from ordering 95,800 pills in 2009 to 2.2 million pills in 2011, the DEA said. Another pharmacy in Hudson, an area of about 34,000 people near Clearwater, purchased 2.2 million pills in 2011, the DEA said.

"Walgreens pharmacists blatantly ignored red flags," Miami field district Special Agent in Charge Mark Trouville said. "National pharmaceutical chains are not exempt from following the law."

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