By Jonathan Stempel
NEW YORK (Reuters) – A New York company that was the first drug distributor to face U.S. felony charges for its role in fueling the opioid crisis said on Tuesday it will stop distributing controlled pharmaceuticals, which include opioids.
Rochester Drug Co-Operative Inc (RDC) announced the decision after agreeing last April to settle the charges by paying a $20 million fine and accepting independent monitoring, under a five-year deferred prosecution agreement.
RDC, one of the 10 largest U.S. drug distributors, said controlled pharmaceuticals represent a relatively small percentage of its sales but “significant legal and compliance expenses,” and that those costs are “simply not sustainable.”
The Rochester, New York-based company will keep distributing non-controlled, generic and private label drugs, as well as healthcare supplies. It said it serves 1,300 retail pharmacies, long-term care pharmacies and home healthcare stores.
In settling with the government, RDC admitted to having distributed oxycodone, fentanyl and other controlled substances to pharmacies despite internal “red flags” that they would be used improperly. Opioids have contributed to more than 400,000 deaths since 1997, according to the U.S. Centers for Disease Control and Prevention.
Federal prosecutors have opened a criminal probe of whether several drug companies intentionally allowed large quantities of opioids to be shipped, contributing to the nationwide crisis.
At least two distributors, AmerisourceBergen Corp and McKesson Corp, have said in regulatory filings that they have been in communications with prosecutors’ offices.
RDC’s former chief executive, Laurence Doud, pleaded not guilty last April to criminal charges of conspiring to both distribute illegal drugs and defraud the government.
Jeff Eller, an RDC spokesman, said it is premature to discuss implementation of the deferred prosecution agreement.
(Reporting by Jonathan Stempel in New York; Editing by Dan Grebler)