Cardinal reaches settlement on controlled-substances charge
DUBLIN, Ohio Resolving a major legal impasse that had threatened both its own business and that of some of its retail pharmacy customers, Cardinal Health has settled a wide-ranging series of charges that it violated federal reporting requirements in its handling of controlled substances. The agreement will allow the drug wholesaling and health services giant to resume shipments of controlled substances at all affected distribution centers.
Under terms of the legal pact, Cardinal will pay a total of $34 million in civil penalties to the U.S. Drug Enforcement Administration and seven U.S. attorneys’ offices to resolve the charges. The settlement “will result in reinstated licenses to distribute controlled substances from the company’s Auburn, Wash., Lakeland, Fla., and Swedesboro, N.J. distribution centers,” noted the company.
The charges were serious, and they had hampered Cardinal’s operations at those three facilities. According to the DEA, the violations led to large-scale diversion of controlled drugs.
“Cardinal Health, which operates 27 DEA-registered distribution facilities, failed to report to DEA suspicious orders of hydrocodone that it then distributed to pharmacies that filled illegitimate prescriptions originating from rogue Internet pharmacy Web sites,” noted the DEA in a statement. “These prescriptions violated applicable federal and state law because they were not issued for a legitimate medical purpose by physicians acting within the usual course of professional practice.
“Cardinal’s conduct allowed the ‘diversion’ of millions of dosage units of hydrocodone from legitimate to non-legitimate channels,” the agency reported.
Without admitting any wrongdoing, Cardinal agreed both to pay the fines and alter some of its practices to prevent any possibility of diverted products. “Specifically, the company has expanded its training, implemented new processes, introduced an electronic system that identifies and blocks potentially suspicious orders pending further investigation, and enhanced the expertise and overall staffing of its pharmaceutical distribution compliance team,” Cardinal reported. In addition, “to strengthen its overall compliance practices,” the company noted that it has hired former acting deputy U.S. attorney general Craig Morford to an expanded role as chief compliance officer.
“Protecting the integrity of the pharmaceutical supply chain is a responsibility we take very seriously, and preventing prescription drug abuse is a public policy goal that Cardinal Health fully supports,” said R. Kerry Clark, chairman and chief executive officer. “We settled this matter so that we could quickly resume the distribution of these vital medicines to our valued customers, and we will continue to work with the DEA and other supply chain partners to take all necessary steps to keep these powerful drugs out of the wrong hands.”
Cardinal spokesperson Tara Schumacher said the company was working to restore normal supply operations at the three affected DCs by the end of November. “As you can imagine, these license suspensions have caused challenges for some of our customers, particularly retail independents in the affected service areas,” she told Drug Store News today. “We worked diligently with the DEA to address its concerns, agreed to pay $34 million to settle the matter, and have invested more than $20 million to enhance our controls against diversion.”
Cardinal’s goal, said Schumacher, is “resolving this matter quickly so we could resume shipments to our valued customers, who need these medicines to in turn serve their patients.”
Walgreens reports increase in sales for September
DEERFIELD, Ill. Walgreens today reported that its sales for the month of September totaled $4.85 billion, up 10 percent from the same month last year. Calendar year-to-date, sales totaled $44.35 billion reflecting an increase of 9.9 percent from last year’s total of $40.36 billion.
The company also said that comparable-store sales, covering stores open for at least one year, increased by 4.7 percent. Front-end comp-store sales increased 1.3 percent, the company reported. Walgreens credited front-end sales numbers to strong beauty and consumables sales.
According to Walgreens, pharmacy sales comprised 67.2 percent of total sales for September. September pharmacy sales increased 11.2 percent, while comparable pharmacy sales increased 6.5 percent. Comparable pharmacy sales were negatively impacted by 2.4 percentage points due to generic drug introductions in the last 12 months. Total prescriptions filled at comparable stores increased 3.5 percent.
In September, Walgreens cut the ribbon on 36 stores, including three relocations, and acquired three stores.
FDA approves new treatment for HIV
PRINCETON, N.J. The Food and Drug Administration has approved a new combination therapy for HIV from Bristol-Myers Squibb, Bristol announced Wednesday.
The treatment, which combines 300 mg of the drug Reyataz (atazanavir sulfate) with 100 mg of ritonavir, is for people with untreated HIV, also known as treatment-naive patients.
“Boosted Reyataz provides healthcare professionals a newly approved, once-daily dosing option as part of combination therapy for patients naive to HIV therapy,” said Dr. Elliott Sigal, Bristol’s executive vice president, chief scientific officer and president for research and development.
The treatment is based on the 48-week CASTLE study, which demonstrated that the once-daily combined therapy was similar in efficacy to the twice-daily combination of lopinavir and ritonavir.