Life Science Compliance Update

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February 13, 2017

Drug Wholesalers to Pay $36 Million Over West Virginia Pill Mill Claims


Two prescription drug wholesalers – AmerisourceBergen Corp. and Cardinal Health Inc. – will pay $16 million and $20 million, respectively, to resolve West Virginia’s claims relating to their distribution of controlled substances in the state, according to Governor Earl Ray Tomblin. The settlement – in which neither company admitted to any wrongdoing – is believed to be the largest pharmaceutical settlement in state history, after lawsuits dragged on for more than four years in Boone County Circuit Court and spanned the terms of two attorneys general.

In 2012, McGraw filed lawsuits against Cardinal Health, AmerisourceBergen and a dozen smaller drug distributors for their role in a drug supply chain that includes doctors who write prescriptions for nonmedical purposes and “pill mill” pharmacies that dispense excessive numbers of painkillers. Attorney General Patrick Morrisey inherited the case upon taking office in January 2013.

These deals are the latest in several settlements stemming from a case brought against more than one dozen companies by the attorney general’s office, along with the Department of Health and Human Resources and Department of Military Affairs and Public Safety.

The settlement money will go toward drug treatment programs to help West Virginians addicted to opioid drugs, such as heroin and prescription painkillers. The money will be kept in a special account at the State Auditor’s office. Gov. Tomblin said, “We’ve taken steps to combat drug abuse in West Virginia with distributors, prescribers, and pharmacists, and the money from this settlement will help us expand those efforts with additional treatment and long-term recovery options.”

In addition to the settlement payments, Cardinal Health and AmerisourceBergen agreed to promptly alert state authorities when they see suspicious drug orders from pharmacies.

“We believe that the best possible way to manage this issue is to encourage drug distributor customers, like pharmacists and physicians who work directly with patients, to prescribe and order pain medications responsibly and appropriately,” said Gabe Weissman, an AmerisourceBergen spokesman. “Simultaneously, we will continue to do our part to provide the safe and efficient distribution network that ensures product availability for the treatments that preserve or enhance quality of life for patients with legitimate needs, while working with all partners to limit and prevent abuse.”

Cardinal Health has said that its hydrocodone and oxycodone sales make up only a small fraction — about 7 percent — of its total doses of prescription drugs shipped to West Virginia. Hydrocodone is sold under brand names like Lortab and Vicodin. Oxycodone is known better under its OxyContin brand name.

“While the company denies the state’s allegations, Cardinal Health recognizes that the epidemic of prescription drug abuse is a multifaceted problem driven by addiction and demand,” the drug wholesaler said in a news release.

Previous settlements, with nine smaller wholesalers, have netted the state more than $11 million.

Last January, Morrisey’s office sued McKesson Corp., the second-leading prescription opioid shipper to West Virginia. That case remains stuck in federal court, with no settlement expected anytime soon.

The state’s settlement with Cardinal Health and AmerisourceBergen won’t end all litigation the companies face in West Virginia. In late December, the McDowell County Commission filed suit against those firms and McKesson, alleging the wholesalers contributed to the county’s opioid epidemic by shipping far too many pain pills there.

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