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Cardinal Health Settles Claims For $34 Million

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The Associated Press

Published: October 3, 2008

WASHINGTON - Cardinal Health Inc. will pay $34 million to settle claims that it failed to report suspicious sales of controlled substances, the Department of Justice said on Thursday.

Dublin, Ohio-based Cardinal, one of the nation's largest distributors of pharmaceutical drugs, reached an agreement with seven U.S. Attorney's Offices and the Drug Enforcement Agency to pay $34 million in civil penalties for alleged violations of its obligations under the Controlled Substances Act.

Federal regulators say despite earlier warnings, Cardinal failed to report to the DEA suspicious orders of hydrocodone that it then distributed to pharmacies that filled illegitimate prescriptions from rogue Internet pharmacies.

All manufacturers and distributors are required by law to have a system in place to monitor and report suspicious orders of controlled substances. DEA Acting Administrator Michele M. Leonhart said Cardinal's "negligent conduct contributed to our nation's serious pharmaceutical abuse problem."

Cardinal Health said in a statement released later Thursday that the settlements will result in reinstated licenses to distribute controlled substances from the company's distribution centers in Auburn, Wash., Lakeland, Fla. and Swedesboro, N.J. The company said it was making the $34 million payment without admitting any wrongdoing.

"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," Cardinal Health's Chief Executive R. Kerry Clark said in a statement.

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