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Opioid Manufacturer Settles With Justice Department, Must Track Distribution

— July 13, 2017

Opioid Manufacturer Settles With Justice Department, Must Track Distribution

It is estimated that between 26.4 million and 36 million people abuse opioids worldwide, with roughly 2.1 million people in the United States suffering from substance use disorders related to prescription opioid pain relievers. Oxycodone is a well-known prescription pain reliever which can leave users 40 times more likely to develop a heroin abuse problem if they get off track and become addicted. Government officials and law enforcement have attempted to crack down on the opioid abuse epidemic, targeting those on the street as well as manufacturers of the drugs and physicians they believe are allowing patients to misuse.

Opioid Manufacturer Settles With Justice Department, Must Track Distribution
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Mallinckrodt Pharmaceuticals is one such company the U.S. Justice Department has targeted.  On Tuesday, July 11, the pharmaceutical manufacturer settled for $35 million with the Department in order to put to rest allegations that it failed to report signs of addictive oxycodone pills being prescribed in large quantities which were actually sold in Florida’s black market. Mallinckrodt was responsible for manufacturing 66 percent of the oxycodone sold in the state between 2008 and 2011.  The settlement is the first of its kind, pinning an important player in the industry for not keeping track of its distribution, thereby helping to spark an opioid abuse epidemic.  

New standards will soon be put into place which will require Mallinckrodt to track the entire flow of the drugs as they are manufacturered and distributed along the supply chain.  This change was made even though the company said it really has no control over the drugs once they’re passed along to wholesalers. “ While Mallinckrodt disagreed with the U.S. government’s allegations, we chose to resolve the legacy matter in order to eliminate the uncertainty, distraction and expense of litigation and to allow the company to focus on meeting the important needs of its patients and customers,” Michael-Bryant Hicks, the company’s general counsel, said in a press release.

Opioid Manufacturer Settles With Justice Department, Must Track Distribution
Image Courtesy of Addiction Resource

The government stated it could have issued Mallinckrodt a $2.3 billion fine for approximately 44,000 violations of the federal Controlled Substances Act, the statute establishing federal U.S. drug policy under which the manufacture, importation, possession, use and distribution of certain substances is regulated, including recordkeeping violations, according to documents. However, it was difficult to prove the company intentionally contributed to the black market epidemic given its limited control over distribution of the drug, and this was reflected in the final settlement numbers.  Some believe the fine imposed won’t mean a thing to such a large company.  “These fines mean nothing to Fortune 500 companies,” Joseph T. Rannazzisi, retired supervisor of control diversion for opioids at the DEA, said. “Large corporations see these fines as the cost of doing business. Unless there are meaningful sanctions brought against these companies, they will continue to violate the law.”

Nevertheless, the Justice Department hopes the case sets an example and encourages other manufacturers to be more cautious in their distribution practices.  “The Department of Justice has the responsibility to ensure that our drug laws are being enforced and to protect the American people,” Attorney General Jeff Sessions said. “Part of that mission is holding drug manufacturers accountable for their actions.”


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Mallinckrodt Agrees to Pay Record $35 Million Settlement for Failure to Report Suspicious Orders of Pharmaceutical Drugs and for Recordkeeping Violations

Justice Department reaches first settlement with opioid manufacturer

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