DENVER – LAWFUEL – The Law News Network – Bill Leone, United States Attorney for the District of Colorado, and Jeffrey D. Sweetin, Special Agent in Charge of the Drug Enforcement Administration (DEA) Rocky Mountain Division, announced today that King Soopers, City Market, and their parent company, Kroger, have agreed to pay a record $7 million dollar settlement for systemic violations of the Controlled Substances Act (CSA) by the company?s pharmacies. In addition to the penalty, the Kroger, Co,. including King Soopers and City Market, has agreed to implement a pharmacy compliance program estimated to cost over $6 million dollars in all 1,900 of its pharmacies nationwide, even though the DEA had no evidence of any CSA violations outside of the King Soopers and City Market pharmacies.
In response to information concerning possible illegal diversions of controlled substances, the DEA, in consultation with the United States Attorney?s Office, initiated an investigation, which included audits of seven King Soopers pharmacies. The audits revealed multiple discrepancies reflecting a pattern of non-compliance at King Soopers pharmacies with the requirements of the CSA and Federal regulation. The audits uncovered serious record-keeping and controlled substance security problems at King Soopers, the result being that it was not possible to determine how many drugs had been lost or diverted. The record-keeping problem also complicated the determination of who was responsible for potential diversions. King Soopers? inadequate accountability and security for controlled substances included from the time they were ordered to the time they were dispensed. After the audits it became clear that many of the CSA violations were the result of systemic weaknesses present in all King Soopers and City Market pharmacies.
During the course of the audit and after, officials of King Soopers and Kroger fully cooperated with the Department of Justice. As a result of the investigation, Kroger volunteered to implement a nationwide training program of all pharmacy employees, as well as institute a Comprehensive Regulatory Compliance Program.
?The goal in this case is compliance,? said United States Attorney Bill Leone. Kroger should be commended for recognizing that they have a problem, and taking steps to immediately address their controlled substance security deficiencies on a national level. As part of this settlement, Kroger offered to institute their compliance program, not just in Colorado, but throughout the country. This important step goes a long way towards removing controlled substances illegally obtained from pharmacies from our streets. Unfortunately, we do not believe that controlled substance diversions such as this are limited to Kroger or King Soopers. The Justice Department intends to continue to pursue any pharmacy or chain of pharmacies that are allowing diversions in violation of the CSA. The DEA audit investigators are to be complimented for their thorough work, leading to this important settlement.
Americans trust corporations like Kroger to supply them the medications they need. They also trust them to ensure that controlled substances aren’t diverted to the illicit market,? said Jeffrey Sweetin, DEA Special Agent in Charge. This record settlement is a clear message that DEA will hold companies accountable for not safeguarding these potentially dangerous substances, as well as an acknowledgment by Kroger that their internal monitoring systems need to be changed. As a result of DEA’s investigation, Kroger is initiating a corporate-wide compliance program to improve their pharmaceutical controls. $7 million is a very large settlement. But, because diverted pharmaceuticals account for a large percentage of the drugs illegally abused, the cost of not imposing such settlements is much larger.
In addition to the $7 million dollar penalty, both parties have agreed to an additional $3 million dollar penalty which will be suspended as long as Kroger complies with their Comprehensive Regulatory Plan. The DEA will work closely and cooperatively with Kroger to ensure the plan is implemented.
The Controlled Substances Act was enacted in 1970 to deter the illegal importation, manufacture, distribution, possession, and improper use of controlled substances which have a substantial and detrimental effect on the health and general welfare of the American people. The Drug Enforcement Administration is the primary agency charged with regulating controlled substances and enforcing the Controlled Substances Act.
This case was handled by Assistant United States Attorney Edwin Winstead.
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