Issaquah-based Costco to pay $11.75M to settle allegations of lax pharmacy controls

  • Thursday, January 19, 2017 11:21am
  • News

Costco Wholesale will pay $11.75 million to settle allegations that its pharmacies violated the Controlled Substances Act when they improperly filled prescriptions for controlled substances, according to a settlement reached on Wednesday.

The settlement resolves allegations that Costco pharmacies filled prescriptions that were incomplete, lacked valid U.S. Drug Enforcement Administration numbers or were for substances beyond various doctors’ scope of practice. Additionally, the settlement resolves allegations that Costco failed to keep and maintain accurate records for controlled substances at its pharmacies and centralized fill locations.

The settlement was announced on Thursday by U.S. Attorneys Annette L. Hayes for the Western District of Washington, Michael C. Ormsby for the Eastern District of Washington, Eileen M. Decker for the Central District of California, Barbara L. McQuade for the Eastern District of Michigan and Phillip A. Talbert for the Eastern District of California.

“Pharmacies across this country are on the leading edge of the battle against our prescription drug abuse crisis,” Hayes said. “A company such as Costco that distributes a significant volume of controlled substances has a responsibility to ensure it complies with regulations that help prevent opioids and other dangerous drugs from being misused or otherwise added to the illegal marketplace. I commend the Drug Enforcement Administration investigators for uncovering the violations at issue in this case, and working with Costco to ensure that systems are put in place to prevent controlled substances from ending up in the wrong hands.”

“Last year, over 50,000 Americans died as a result of drug overdoses, many of which were related to the misuse of prescription drugs. This settlement demonstrates the accountability and responsibility that go along with handling controlled prescription drugs,” DEA Assistant Administrator Louis Milione said. “DEA works every day to reinforce good corporate practices through outreach and education efforts and, when appropriate, with administrative and criminal action.”

Under the settlement reached January 18, 2017, Costco acknowledges that between January 1, 2012 and December 31, 2015, certain Costco Pharmacies dispensed controlled substances inconsistent with their compliance obligations under the Controlled Substances Act and its implementing regulations.

The violations include filling prescriptions from practitioners who did not have a valid DEA number; incorrectly recording the practitioner’s DEA number; filling prescriptions outside the scope of a practitioner’s DEA registration; filling prescriptions that did not contain all the required information; failing to maintain accurate dispensing records; and failing to maintain records for their central fill locations in Sacramento, California and Everett, Washington.

“In light of the prescription pill and opioid overdose epidemic we are seeing across the country, compliance with regulations governing pharmacies is more important than ever,” McQuade stated. “We applaud Costco for working with DEA and taking steps to tighten up its compliance to ensure that prescription pills do not end up on the street market.”

“These are not just administrative or paperwork violations – Costco’s failure to have proper controls in place in its pharmacies played a role in prescription drugs reaching the black market,” Decker said. “Costco pharmacies in Southern California filled numerous prescriptions for drugs that should not have been sold to consumers because of its flawed system for validating DEA registration numbers.”




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