* Walgreen cited over prescription painkiller distribution
* Regulator: Drugs were diverted to abusers, black market
By Jonathan Stempel and Jessica Wohl
June 11 Walgreen Co, the largest U.S.
drugstore chain, has agreed to pay $80 million in civil
penalties to resolve allegations that it violated federal rules
governing the distribution of prescription painkillers.
The U.S. Drug Enforcement Administration on Tuesday said the
settlement is the largest in its history.
The DEA accused Walgreen of committing an "unprecedented"
number of record-keeping and dispensing violations of the
Controlled Substances Act.
As a result, the DEA said, Walgreen negligently allowed
controlled substances such as the narcotic oxycodone and other
prescription painkillers to be distributed to abusers and sold
illegally on the black market.
"National pharmaceutical chains are not exempt from
following the law," Mark Trouville, special agent in charge in
the DEA's Miami field division, said in a statement. "All DEA
registrants will be held accountable when they violate the law
and threaten public health and safety."
Kermit Crawford, Walgreen president of pharmacy, health and
wellness, in a statement said the company has taken and will
take further steps to improve oversight and training "to ensure
the appropriate dispensing of controlled substances and to
improve collaboration across the industry."
The settlement with the Deerfield, Illinois-based company
also resolves a probe by U.S. Attorney Wifredo Ferrer in Miami.
Walgreen operates more than 8,000 drug stores in all 50 U.S.
states, the District of Columbia, and Puerto Rico.
As part of the settlement, Walgreen admitted that it failed
to uphold its obligations as a DEA registrant.
Six Walgreen pharmacies in Florida and a distribution center
in Jupiter, Florida were given a two-year ban from dispensing
various controlled substances, the DEA said.
Walgreen also agreed to enhance training and compliance
programs, and set up a Department of Pharmaceutical Integrity to
help prevent similar violations.
Florida has long been considered a center of prescription
drug abuse, and the DEA has dismantled dozens of sham clinics
known as "pill mills" where doctors have written prescriptions
for drug dealers and addicts.
The Centers for Disease Control and Prevention said the U.S.
death rate from drug overdoses has more than tripled since 1990.
It said prescription painkillers, also known as opioid or
narcotic pain relievers, were involved in more than 15,500
overdose deaths in the United States in 2009.
Walgreen said it previously set aside $80 million for a
settlement, including $25 million in its fiscal third quarter,
which ended May 31. It said it expects the accord to reduce that
quarter's earnings by 4 to 6 cents per share.
Shares of Walgreen closed Tuesday down 11 cents at $49.54 on
the New York Stock Exchange.