By Jonathan Stempel

(Reuters) – Morris & Dickson Co, one of the largest U.S. wholesale drug distributors, agreed to pay $22 million in civil penalties to settle U.S. government charges that it failed to report thousands of suspicious orders of the opioids hydrocodone and oxycodone.

The U.S. Department of Justice said on Friday that the Shreveport, Louisiana-based company will also spend millions of dollars to hire staff and upgrade oversight to help comply with federal regulations requiring that orders be properly reported.

According to the government, U.S. Drug Enforcement Administration agents had since January 2014 uncovered more than 12,000 retail pharmacy orders for hydrocodone and oxycodone that Morris & Dickson should have flagged to that agency.

Founded in 1841, Morris & Dickson is the largest privately owned wholesale drug distributor in the United States, and fourth largest overall, with more than $4 billion of revenue in the year ended Jan. 31, 2018, the Justice Department said.

“We acknowledge we made mistakes,” Morris & Dickson said in a statement, adding that the settlement was not an admission of liability.

“The opioid crisis is real, and we unequivocally accept our responsibility to do everything in our control as a distributor to prevent misuse – while also protecting deserving patients’ ability to receive the doctor-prescribed medications they absolutely need,” the company added.

Opioids, including prescription painkillers and heroin, were involved in a record 47,600 U.S. overdose deaths in 2017, the U.S. Centers for Disease Control and Prevention has said.

State and local governments have filed hundreds of lawsuits accusing drugmakers such as Purdue Pharma of deceptive marketing, and distributors such as AmerisourceBergen Corp, Cardinal Health Inc and McKesson Corp of ignoring illegal uses of opioids.

Friday’s settlement came after upstate New York’s Rochester Drug Co-operative Inc on April 23 became the first large U.S. drug distributor to face U.S. felony charges for exacerbating the nationwide opioid crisis.

Rochester accepted a $20 million fine to settle those criminal charges.

(Reporting by Jonathan Stempel in Chicago; Additional reporting by Nate Raymond in Boston; editing by Jeffrey Benkoe, Leslie Adler and Susan Thomas)