DEA suspends Cardinal Health license in Florida

Reuters News
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Posted: Feb 03, 2012 2:18 PM
DEA suspends Cardinal Health license in Florida

By Toni Clarke

(Reuters) - Cardinal Health Inc said on Friday that the U.S. Drug Enforcement Administration has suspended its license to distribute potentially addictive medicines from a facility in Lakeland, Florida, citing concern over unusually high shipments to four pharmacies.

Cardinal, one of the country's largest healthcare distributors, said the DEA alleges Cardinal knew, or should have known, that the pharmacies were inappropriately filling prescriptions by physicians for nonmedical reasons.

The company said it intends to vigorously fight the agency's actions, and will continue to supply its customers from its facility in Jackson, Mississippi, if it has to.

On a conference call with Wall Street analysts, Cardinal's chief executive, George Barrett, said he was "outraged" at the imperial way in which the DEA suspended its license, saying the agency had not contacted the company beforehand or given it the "opportunity to be heard."

DEA representatives did not immediately respond to phone calls or an email seeking comment.

The dispute highlights a growing rift between the DEA and companies that make painkillers, stimulants, tranquilizers and other potentially addictive medicines at a time of increased prescription drug abuse. Florida is one of states most affected by the problem.

Cardinal said DEA suspended the company's license based on increased shipments made to four pharmacies, but the company said volume alone is not sufficient evidence to assume products are being diverted for recreational use.

The needs of pharmacies are varied, and higher volumes might be appropriate based on factors such as pharmacy size, patient demographics and proximity to acute care centers, the company said.

In 2007, the DEA suspended Cardinal's license to distribute controlled substances from the same Lakeland center, and another center, in Auburn, Washington, saying the company had failed to maintain effective controls of its distribution to retail pharmacies.

The DEA at the time cited the sale of the painkiller hydrocodone to pharmacies that allegedly dispensed the drug based on improper prescriptions from Internet pharmacy websites.

Barrett said the company has since taken significant steps to rebuild its systems and hire new personnel to oversee the process. He said it already scans for potential misappropriation of the drugs, and said a spike in volume is one red flag.

He blamed the DEA for not sharing information that would make it easier to prevent drugs from being diverted, and said today's action "does nothing to solve the problem."

The company will shortly file documents with the U.S. District Court for the District of Columbia, saying that unless the court intervenes, the DEA will disrupt delivery of drugs to hospitals and pharmacies throughout Florida, Georgia, and South Carolina.

He said the order will not affect the company's financial forecasts.

Cardinal's shares were down 1.1 percent at $41.75 in afternoon trading on the New York Stock Exchange.

(Reporting By Toni Clarke in Boston, editing by Matthew Lewis)