A New York pharmaceutical company has settled a six-figure lawsuit with the federal government after it was revealed that the drug distributor violated the Controlled Substances Act when failed it to report pharmacy orders and the theft or loss of Oxycodone and other drugs to the Drug Enforcement Administration, BuzzFeed News has learned.
The joint investigation led by the DEA and NYPD represents a significant shift in enforcement focus from street-level dealers, rogue pharmacies, and dirty doctors to the larger companies who garner big profits from the legal distribution of highly-addictive drugs and opioids like Oxycodone.
The company, Rochester Drug Cooperative, Inc., will pay $360,000 in fines as part of the settlement, a federal law enforcement source told BuzzFeed News.
Preet Bharara, U.S. Attorney for the Southern District of New York, announced the settlement in a press release Thursday.
“Pharmaceutical distributors are supposed to be one of the first lines of defense in the growing oxycodone epidemic," Bharara said. "Today’s consent order demonstrates that distributors that do not properly track and report the purchase and sale of drugs with a high potential for abuse will be held accountable.”
According to the complaint, after an audit of various New York City pharmacies carrying drugs distributed by RDC, investigators determined that the company failed to report thousands of orders of drugs over a period of five years.
Investigators also found that RDC failed to report the theft or loss of drugs during the same time period. According to the complaint, this violation occurred on multiple occasions, with the precise number of violations to be established in court. It is likely the missing pills ended up on the street.
Combating a growing epidemic of heroin and prescription pill abuse has been a priority for New York state lawmakers over the past few years. In 2014, Governor Andrew Cuomo announced the state was awarded $8.1 million in federal funding for drug prevention efforts targeting young people. According to the Centers for Disease Control, in 2014, there were more than 118,000 admissions to New York State-certified treatment programs for heroin and prescription opioid abuse – a 17.8 percent increase since 2009.
In 2013, the DEA conducted an on-site investigation of RDC. The investigation confirmed the company’s reporting system was underreporting many thousands of drug sales to pharmacies throughout the northeast region. RDC initially claimed that their numbers were off due to computer error and the company told investigators it had plans to implement a new tracking system. But a year later, the feds found that RDC had not made the changes as promised.
According to its website, RDC was established in 1905 and is the “eighth largest full-line distributor in the US.”
RDC Chief Operating Officer Joe Brennan told BuzzFeed News that the company has agreed in principal on the details of the settlement and could make no further comment until the deal with the DEA was finalized.