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Cardinal settles with U.S. over painkiller shipments to pharmacies

By Nate Raymond

NEW YORK (Reuters) – A drug distributor owned by Cardinal Health Inc has agreed to pay $10 million to resolve claims it failed to alert the U.S. Drug Enforcement Administration to suspiciously giant orders of addictive painkillers by New York-area pharmacies.

The settlement with Kinray LLC, a New York City-based pharmaceutical distributor, disclosed in papers filed late Thursday in federal courtroom in Manhattan, comes amid efforts by U.S. authorities to fight the nation’s opioid drug epidemic.

The settlement was secured by the workplace of Preet Bharara, the U.S. Attorney for the Southern District of New York, who has more and more turned his sights towards the rising opioid drug epidemic.

Each day about 78 Americans die of an opioid overdose, in accordance to authorities. Oxycodone, a closely regulated opioid painkiller that has monumental money worth to drug sellers, is abused by over 13 million Americans yearly, prosecutors say.

The Kinray settlement got here after a DEA investigation of pharmacies in New York and elsewhere that had ordered unusually giant and frequent shipments of oxycodone or hydrocodone, in accordance to a lawsuit filed earlier this week.

From January 2011 and May 2012, Kinray shipped the medicine to greater than 20 New York pharmacy places in quantities that have been many occasions larger than the distributor’s common gross sales of managed substances to all of its clients, the lawsuit stated.

Kinray ignored quite a few “red flags” and didn’t report any suspicious orders to the DEA regardless of necessities that it achieve this for such extremely regulated medicine, the lawsuit stated.

The newest settlement stemmed from a 2012 settlement with the DEA through which its facility in Lakeland, Florida, was suspended from promoting painkillers and different medicine for 2 years, in accordance to Cardinal.

The 2012 deal solely resolved administrative features of the case, not potential fines Cardinal Health confronted in Florida or elsewhere. The Dublin, Ohio-based firm has put aside $44 million to cowl these potential liabilities.

Cardinal Health, which introduced its $1.three billion acquisition of Kinray in 2010, stated on Friday it continues to work with the U.S. Justice Department to resolve the matter.

As a part of the settlement, Kinray admitted and accepted duty for failing to report suspicious orders to the DEA, in accordance to courtroom papers.

The case is U.S. v. Kinray LLC, U.S. District Court, Southern District of New York, No. 16-cv-09767.

(Editing by Lisa Von Ahn and Jeffrey Benkoe)

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