McKesson agrees to $150M settlement over reporting of painkiller orders

San Francisco-based McKesson Corp. will pay $150 million — a record high amount — as part of a Controlled Substances Act civil penalty settlement to resolve allegations it failed to report suspicious orders of painkillers.

The drug distributor finalized the settlement with the U.S. Drug Enforcement Administration and Department of Justice Tuesday.

The agreement comes after McKesson reached a $13.25 million settlement with the DOJ in 2008 to resolve claims the company failed to implement an effective system to detect and report suspiciously large or frequent drug orders, according to the report.

In its most recent investigation, the DOJ found McKesson had failed to fully implement and adhere to its own compliance program. From June 2008 to May 2013, the company processed more than 1.6 million orders for controlled substances in Colorado and only reported 16 as suspicious, according to the DOJ.

Under the new settlement, the Drug Enforcement Administration will suspend sales of controlled substances from McKesson distribution centers in Colorado, Ohio, Michigan and Florida on a staggered basis for several years. The staged suspensions are one of the most severe sanctions ever agreed to by a DEA registered distributor, according to the DOJ.

The company must also follow new and enhanced compliance obligations, and hire an independent monitor to assess compliance — the first sanction of its kind under a Controlled Substances Act civil penalty settlement.

"We are committed to tackling this multi-faceted problem in collaboration with all parties in the supply chain that share the responsibility for the distribution of opioid medications," McKesson CEO John Hammergren said in a statement

McKesson publicly disclosed the settlement in a Form 8-K filed in April 2015 and an accrual for the anticipated settlement payment was reflected in McKesson's fiscal year 2015 financial results.

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