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Drug Distributor McKesson to Pay $150 Million in Painkiller Reporting Case

by Phil Helsel /  / Updated 
A woman walks into McKesson Corporation's headquarters in San Francisco on Jan. 31, 2008.Paul Sakuma / AP

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Drug distributor McKesson Corporation will pay a $150 million fine and some sales will be suspended in four states after U.S. regulators alleged it failed to report suspicious orders of painkillers linked to the opioid addiction epidemic, authorities said.

The suspension of sales of controlled substances from distribution centers in Colorado, Ohio, Michigan and Florida are among the toughest suspensions ever imposed on a business regulated by the Drug Enforcement Administration, the Justice Department said.

The agreement comes as the U.S. faces a growing heroin crisis. People addicted to prescription opioid painkillers are most at risk of turning to heroin, according to the Centers for Disease and Prevention.

Related: Pennsylvania Community Struggles With Heroin Scourge

McKesson was accused of similar violations in 2008 and paid $13.25 million to settle that case, the Justice Department said.

The company was supposed to enact tougher measures to identify and prevent suspicious orders but didn’t do so, and from 2008 and 2013 "supplied various U.S. pharmacies an increasing amount of oxycodone and hydrocodone pills, frequently misused products that are part of the current opioid epidemic," the Justice Department said.

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The company in a statement said the new settlement was reached after years of discussions "regarding McKesson's interpretation of the DEA's regulations for the monitoring and reporting of suspicious controlled substance orders."

"In the interest of moving beyond disagreements about whether McKesson was complying with the controlled substance regulations during the applicable period and to instead focus on the company’s partnership with regulators and others to help stem the opioid epidemic in this country, the company agreed to settle with the DEA and DOJ," McKesson said in a statement.

Related: 78 People a Day Die From Opioid Overdose, Landmark Report Says

The Justice Department said that in Colorado the company processed 1.6 million orders, but only flagged 16 orders as suspicious — and all of those were connected to one instance.

The settlement requires the company to halt sales of controlled substances from distribution centers in Colorado and the other three states for "multiple years," the Justice Departments aid.

Oxycodone and hydrocodone are the painkillers marketed as OxyContin and Vicodin, among others. Some heroin users have told NBC News they switched from abusing painkillers like OxyContin to heroin because the pills are far more expensive on the black market than heroin.

McKesson said that since 2013 it has made "significant changes to its monitoring and reporting processes" and that it takes its role in preventing abuse seriously.

"We continue to significantly enhance the procedures and safeguards across our distribution network to help curtail prescription drug diversion while ensuring patient access to needed medications,” Chairman and CEO John H. Hammergren said in a statement.

Related: From Concussion to Heroin, How a Teen Athlete Became a Drug Addict

Federal statistics out in December showed a record 50,000 Americans died from drug overdoses in 2015.

Heroin deaths rose 23 percent in one year to 12,989, slightly higher than the number of gun homicides. Abuse of drugs like OxyContin and Vicodin killed more at 17,536, which was an increase of 4 percent.

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