By Brendan Pierson
(Reuters) - A federal judge on Monday pared back a U.S. government lawsuit accusing drug distributor Cencora, formerly called AmerisourceBergen (NYSE:COR), of fueling the nation's deadly opioid epidemic by failing to report hundreds of thousands of suspicious orders of prescription painkillers.
U.S. District Judge Jerry Pappert in Philadelphia federal court ruled that the government could only seek penalties for alleged failure to report suspicious orders after October 2018, when the federal Controlled Substances Act was amended to explicitly require such reports. The government's lawsuit, filed last December, claimed that the company failed to report suspicious orders going back to 2014.
It was not immediately clear how large an effect the order could have on Cencora's potential liability in the case. The U.S. Department of Justice declined to comment, and Cencora did not immediately respond to a request for comment.
The government claimed in its lawsuit that Cencora systematically refused or negligently failed to flag suspicious orders by pharmacy customers when it had reason to know that opioids were being diverted to illegal channels.
It also said the Conshohocken, Pennsylvania-based company, which reported $238.6 billion of revenue in its latest fiscal year, intentionally altered how one of its units monitored orders, dramatically reducing the number that underwent internal scrutiny.
The company in December called allegations in the lawsuit "cherry-picked" and said the government was seeking to "shift blame" away from law enforcement failures.
Opioids, including prescription painkillers and illegal narcotics, have contributed to more than 564,000 overdose deaths from 1999 to 2020, including more than 68,000 in 2020 alone, according to U.S. government data. Litigation by state and local governments has resulted in settlements with drugmakers, distributors, including Cencora, and pharmacies worth more than $50 billion.
The nation's other two largest drug distributors, McKesson (NYSE:MCK) and Cardinal Health (NYSE:CAH), have reached settlements with the government over similar allegations for $150 million and $44 million. Those cases were limited to orders in a handful of states, while the lawsuit against Cencora involves much broader claims.
Cencora announced its name change in January.