Reuters: Regulatory News: UPDATE 1-Cardinal facility suspended under DEA settlement

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UPDATE 1-Cardinal facility suspended under DEA settlement May 15th 2012, 13:35 Tue May 15, 2012 9:35am EDT * Lakeland, Florida, facility suspension for 2 years * Agreement resolves litigation with DEA May 15 (Reuters) - Cardinal Health Inc agreed to a two-year suspension for shipping controlled substances from its Lakeland, Florida, distribution center as part of a litigation settlement with the U.S. Drug Enforcement Agency, the pharmaceutical wholesaler said on Tuesday. The DEA had initially suspended Cardinal's Florida license on Feb. 3 because of concerns Cardinal was not adequately monitoring its customers for inappropriate dispensing of prescription drugs, and Cardinal had sought to block the action. As part of the settlement, Cardinal -- one of the biggest U.S. wholesalers of prescription drugs -- also agreed to improve anti-diversion procedures. The Lakeland facility will remain open and other operations will continue, Cardinal said. Cardinal Chief Executive Officer George Barrett said in a statement that the agreement "allows us to put this matter behind us." A Cardinal spokeswoman, Debbie Mitchell, said the settlement "provided certainty and resolution now, and avoided a protracted dispute with the agency." A DEA spokesman did not have an immediate comment. The DEA has sought to make drug wholesalers play a bigger role in fighting the problem of prescription drug abuse, which has surged in the United States, eclipsing the abuse of most illicit drugs, including heroin and cocaine. But distributors such as Cardinal have argued that they are unfairly targeted because it is easier for the DEA to attack a distributor than the thousands of doctors who write the prescriptions. The 2,500 pharmacy customers in Florida, Georgia and South Carolina that had been served by the Lakeland facility will now be served by Cardinal's Jackson, Mississippi, distribution center. On Cardinal's quarterly conference call with analysts earlier this month, Chief Financial Officer Jeff Henderson said the company incurred costs of $4 million in the fiscal third quarter for legal fees, compliance and the extra transportation costs of transferring controlled substances to the Jackson facility. Henderson declined at the time to give an estimate of what DEA-related costs would be in the fiscal fourth quarter, but said he "would not expect dramatically different costs." Link this Share this Digg this Email Reprints

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