By Nate Raymond, Jonathan Stempel and Gram Slattery
WASHINGTON (Reuters) -The U.S. government on Thursday filed a lawsuit accusing AmerisourceBergen (NYSE:ABC) Corp, one of the nation's largest drug distributors, of helping ignite the nation's deadly opioid epidemic by failing to report hundreds of thousands of suspicious orders of prescription painkillers.
In a complaint filed in Philadelphia federal court, the Department of Justice said AmerisourceBergen and two units had repeatedly violated their legal obligation to address suspicious customer orders, or alert the federal Drug Enforcement Administration (DEA) to red flags of suspicious behavior.
The government said AmerisourceBergen had since 2014 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, with $238.6 billion of revenue in its latest fiscal year, even intentionally altered how one of its units monitored orders, dramatically reducing the number that underwent internal scrutiny.
"For years, AmerisourceBergen prioritized profits over its legal obligations and over Americans' well-being," Associate Attorney General Vanita Gupta told reporters.
The lawsuit seeks penalties that could reach billions of dollars, and an injunction against future violations of the federal Controlled Substances Act.
In a statement, AmerisourceBergen called the lawsuit an improper attempt to "shift blame" and the burdens of law enforcement from the Justice Department and DEA to the companies they regulate.
AmerisourceBergen also said the complaint "cherry picked" five pharmacies it shipped drugs to out of the tens of thousands it works with, and that it ended its relationships with four of them before the DEA took any enforcement action.
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.
Nearly 107,000 Americans died of drug overdoses last year, up 16% from 2020, with the rate of deaths from different types of opioids and stimulants also increasing, the U.S. Centers for Disease Control and Prevention reported last week.
TAXICABS, NOT COMPLIANCE
The lawsuit followed AmerisourceBergen's agreement in 2021 to pay up to $6.4 billion to resolve thousands of lawsuits accusing it and other drug distributors of ignoring red flags that prescription painkillers were being used improperly.
That settlement was part of a broader, $26 billion settlement resolving more than 3,000 lawsuits by state and local governments against the company, distributors Cardinal Health Inc (NYSE:CAH) and McKesson Corp (NYSE:MCK), and drugmaker Johnson & Johnson (NYSE:JNJ).
In the only case against AmerisourceBergen to reach a verdict, a federal judge in West Virginia ruled in July that the company, Cardinal Health and McKesson were not responsible for fueling an opioid epidemic in part of that state.
Thursday's lawsuit followed a probe that began in 2017, AmerisourceBergen has said.
The Justice Department said AmerisourceBergen for years understaffed and unfunded programs designed to ensure compliance with the Controlled Substances Act.
In 2014, for example, it budgeted just $4 million for its internal compliance department, a sum dwarfed by its spending on taxicabs and office supplies, the government alleged.
The Justice Department also said AmerisourceBergen even kept shipping drugs to two pharmacies in West Virginia and Florida after being told by an auditor that the drugs were likely being sold in parking lots for cash.
Other companies targeted by the Justice Department over opioids include Purdue Pharma, which pleaded guilty to criminal charges in 2020 over its handling of the addictive painkiller OxyContin, and Walmart (NYSE:WMT) Inc, which is fighting a lawsuit alleging its pharmacies unlawfully distributed opioids.