US drug distributor broke the law but will keep selling opioids to pharmacies

In a civil complaint filed today, the federal Department of Justice said that one of the largest drug distributors in the U.S. violated the law in connection with the sale of controlled substances to pharmacies and other customers across the country, contributing to the prescription opioid epidemic.

AmerisourceBergen Corp. and two of its subsidiaries, AmerisourceBergen Drug Corp. and Integrated Commercialization Solutions LLC (AmerisourceBergen), are charged with failing to report “at least hundreds of thousands” suspicious opioid orders.

The complaint alleges that this unlawful conduct resulted in at least hundreds of thousands of violations of the Controlled Substances Act (CSA). The Justice Department seeks civil penalties and injunctive relief but an outspoken critic of the way white-collar crime is treated expressed doubt that there will be any real justice for one of the country’s largest wholesale pharmaceutical distributors and the 10th largest company in America by revenue.

“There is no reason to believe that the cost of these crimes will have any meaningful impact in comparison with the thousands of overdose deaths that were caused by this kind of misconduct,” said Lisa McCormick, an outspoken anti-corruption activist. “A company with $214 billion in revenue can absorb a huge fine and keep doing business as usual.”

“AmerisourceBergen handles about 20 percent of all of the pharmaceuticals sold and distributed throughout the United States,” said McCormick. “Without a corporate death penalty, this is just a bump in the road instead of a fitting penalty for a company involved with killing more than one million people since 1999.”

AmerisourceBergen was part of a settlement with two other large drug distributors—McKesson Corp and Cardinal Health Inc—as well as drugmaker Johnson & Johnson but all four companies remain active businesses handling deadly controlled substances.

“For years, AmerisourceBergen put its profits from opioid sales over the safety of Americans,” said New Jersey U.S. Attorney Philip R. Sellinger. “According to the complaint, this was part of a brazen, blatant, and systemic failure by one of the largest companies in America to comply with its obligations to report suspicious opioid orders, contributing to the epidemic of opioid abuse throughout this country.”

“The Department of Justice is committed to holding accountable those who fueled the opioid crisis by flouting the law,” Associate Attorney General Vanita Gupta said. “Companies distributing opioids are required to report suspicious orders to federal law enforcement.  Our complaint alleges that AmerisourceBergen—which sold billions of units of prescription opioids over the past decade—repeatedly failed to comply with that requirement.”

“The mission of the DEA is to enforce the Controlled Substances Act, and as this complaint alleges, AmerisourceBergen violated the CSA hundreds of thousands of times,” said Susan A. Gibson, Special Agent in Charge of the DEA’s New Jersey Division, . “AmerisourceBergen was required by law to report suspicious orders to the DEA, and they failed in their obligation to do so.”

“This failure contributed to the opioid epidemic that has plagued this country for years. This multi-year investigation and resulting lawsuit will hold AmerisourceBergen accountable for their actions,” said Gibson.

“AmerisourceBergen, one of the largest wholesale distributors of opioids in the world, had a legal obligation to report suspicious orders to the Drug Enforcement Administration, and our complaint alleges that the company’s repeated and systemic failure to fulfill this simple obligation helped ignite an opioid epidemic that has resulted in hundreds of thousands of deaths over the past decade,” DEA Administrator Anne Milgram said.

Pharmaceutical distributors that sell controlled substances, such as AmerisourceBergen, have a longstanding legal obligation to monitor the orders that they receive from pharmacies and other customers and must inform the Drug Enforcement Administration (DEA) each and every time they receive a suspicious order.

The complaint filed in the U.S. District Court for the Eastern District of Pennsylvania alleges that over the course of nearly a decade, from 2014 through the present, AmerisourceBergen violated the CSA by failing to report at least hundreds of thousands of suspicious orders of controlled substances to the DEA as required by law.

“If companies like AmerisourceBergen can stay in business after pulling stunts like those alleged in this and other complaints, maybe the drugs should be called ‘uncontrolled substances’ because there is a clear lack of regulation and supervision,” said McCormick, who said the recklessness described in the complaint should be enough to take away the company’s license to sell opioids.

“Throughout the nation’s history, the states have had — and still have — the authority to give birth to a corporation, by granting a corporate charter, and to impose the death penalty on a corporate wrongdoer by revoking its charter,” said McCormick. “A million dead Americans warrant a corporate dissolution.”

The alleged unlawful conduct includes filling and failing to report numerous orders from pharmacies that AmerisourceBergen knew were likely facilitating the diversion of prescription opioids. 

Today’s filing is the result of a multi-year investigation by the DEA, the District of New Jersey, the Civil Division’s Consumer Protection Branch, and several other U.S. Attorneys’ Offices.

The government’s complaint specifies several pharmacies for which AmerisourceBergen allegedly was aware of significant “red flags” suggesting the existence of diversion of prescription drugs to illicit markets.

The complaint asserts that AmerisourceBergen nevertheless continued to distribute drugs to the pharmacies for years and reported few suspicious orders to the DEA.

These pharmacies include: a New Jersey pharmacy that has pleaded guilty to unlawfully selling controlled substances; another New Jersey pharmacy whose pharmacist-in-charge has been indicted for drug diversion; two pharmacies, one in Florida and one in West Virginia, for which AmerisourceBergen knew the drugs it distributed were likely being sold in parking lots for cash; and, a Colorado pharmacy that AmerisourceBergen knew was its largest purchaser of oxycodone in that state and specifically identified eleven patients as potential “drug addicts” whose prescriptions likely were illegitimate.

After learning of drug deals in a pharmacy parking lot – described as the ‘reddest of red flags’ by one AmerisourceBergen employee – a subsidiary of the company continued shipping thousands of opioids order to the pharmacy without reporting a single one of the transactions to the DEA.

Another example cited by Sellinger involved a New Jersey pharmacy where the medical distributor told federal authorities it had ceased selling controlled substances to but an AmerisourceBergen subsidiary used a proxy to continue funneling hundreds of opioid orders to that same drugstore.

“None of those suspicious orders were reported to DEA either,” said Sellinger. “These were not isolated incidents, but are indicative of AmerisourceBergen’s widespread misconduct.”

The complaint further alleges that AmerisourceBergen not only ignored red flags of diversion, but also relied on internal systems to monitor and identify suspicious orders that were deeply inadequate, both in design and implementation.

These systems allegedly flagged only a tiny fraction of suspicious orders, thereby enabling diversion and AmerisourceBergen’s failure to report orders it was legally obligated to identify to the DEA. 

In fact, the complaint asserts that in the midst of the opioid epidemic, AmerisourceBergen intentionally altered its internal systems to reduce the number of controlled substances reported as suspicious. Even for the small percentage of orders that AmerisourceBergen did identify as suspicious, the company routinely failed to report them to the DEA.

The government’s complaint alleges that for years AmerisourceBergen flouted its legal obligations and prioritized profits over the well-being of Americans.

If AmerisourceBergen is found liable, it could face escalating civil penalties depending on when each violation occurred and the type of controlled substance at issue.

Specifically: up to $10,000 for each reporting violation before November 2015, up to $16,864 for each violation between November 2015 and October 2018 and for each violation relating to a suspicious order for a non-opioid controlled substance not reported after October 2018, and up to $109,374 for each violation relating to a suspicious opioid order not reported after October 2018, potentially totaling billions of dollars in penalties.

The court also may award injunctive relief to prevent AmerisourceBergen from committing future CSA violations.

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