Drug Distributor to pay $22 million after court settlement

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NEW ORLEANS – Morris & Dickson Company LLC has agreed to pay the US $22 million in civil penalties, because it violated the Controlled Substances Act by failing to report suspicious orders of hydrocodone and oxycodone.

DEA Special Agent in Charge Byerley said, “The failure to report suspicious orders as required by federal regulations contributes to the opioid epidemic, which has caused devastating harm to individuals and our communities. The settlement with Morris & Dickson demonstrates the resolve by DEA to use all available tools to address this crisis at every level and reduce the availability of highly addictive, dangerous drugs.”

“The fight against opioid abuse is among our nation’s most pressing law enforcement and public health initiatives,” said U.S. Attorney Joseph. “Opioids are now the leading cause of accidental death in the United States – killing approximately 130 Americans every day. About 40 percent of these deaths involve prescription drug abuse. This settlement demonstrates the Justice Department’s continued commitment to use all of the tools at its disposal to stem the opioid epidemic. Louisiana citizens should know that my office and our local DEA agents will continue to investigate and aggressively prosecute any manufacturer, distributor, pharmacy, or doctor who, whether negligently or intentionally, fail in their duty to appropriately control the distribution and use of these deadly drugs.”

In addition to paying $22 million in settlement funds, Morris & Dickson also agreed during the course of the negotiations to make significant upgrades to its compliance program by investing millions of dollars to hire additional staff and implement new protocols and standards to ensure compliance with federal regulations requiring them to report suspicious orders of controlled substances.

This settlement arises from a DEA Office of Diversion Control investigation into Morris & Dickson’s failure to report suspicious orders of hydrocodone and oxycodone. Since January 2014, DEA Diversion agents have identified more than 12,000 allegedly suspicious retail pharmacy orders that should have been reported.

Under the Controlled Substances Act and its implementing regulations, distributors are required to report suspicious orders to the DEA.

Reporting suspicious orders and maintaining effective controls against diversion of controlled substances are critical components of the government’s effort to stop the illegal distribution and sale of opioids.

Morris & Dickson is the largest privately owned wholesale pharmaceutical distributor in the United States, and the fourth largest wholesale distributor in the country, reporting total revenues of over $4 billion in its fiscal year ending January 31, 2018.

Since January 2014, Morris & Dickson distributed controlled substances to approximately 800 retail pharmacies across 17 states, distributing over 600,000,000 dosage units.

Morris & Dickson services hospitals, alternative and other health care providers, and retail pharmacies out of its Shreveport, Louisiana facility.

The Centers for Disease Control and Prevention (“CDC”) estimates that more than 630,000 Americans died from drug overdoses from 1999 to 2016. In 2016 alone, approximately 42,000 people died of opioid-related causes. The number of opioid-overdose deaths has reached epidemic proportions: in 2016 there were five times as many such deaths as there were in 1999.

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