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Editor: Mike Bothwell
Profession: Qui Tam Attorney

Category: Settlements and Verdicts

Without admitting liability, McKesson Corporation, a national distributor of prescription medications, has settled a claim for violating federal reporting requirements related to the sale of prescription medications. McKesson has agreed to pay $13,250,000 in civil penalties under an agreement between McKesson and multiple U.S. Attorney's Offices, including the District of Maryland.

McKesson entered into administrative agreement with the Drug Enforcement Agency agreeing to put into practice new policies for the detection and prevention of drug diversion.

The case involves claims centered on the sale of hydrocodone by McKesson to NewCare Pharmacy in East Baltimore, and its sale of phentermine-based products to Smeeta Pharmacy in Highland, Maryland. Allegedly, from January 2005 through October 2006, McKesson-Landover sold approximately 3,000,000 dosage units of hydrocodone to NewCare, while failing to report these suspicious orders to the DEA as required by the Controlled Substances Act. The suit also alleged that from August 2006 to February 2007, large quantities of phentermine-based products were sold by McKesson-Landover, again with no DEA reporting. Similar claims were made by five additional United States Attorney's Offices claiming that McKesson failed to report the theft or loss of a controlled substances to DEA as required by the Constrolled Susbtance Act. NewCare Pharmacy has also been charged with a federal indictment in the District of Maryland for conspiracy to sell a controlled substance over the internet.