Pennsylvania Pharmaceutical Wholesaler Value Drug, Inc. To Pay $4,000,000 In Settlement

Baltimore, Maryland – Value Drug, Inc. (Value Drug) has agreed to pay $4,000,000 to the United States to resolve allegations that it violated the Controlled Substances Act (CSA) by failing to report suspicious orders of oxycodone to six pharmacies located in Maryland and Pennsylvania. Value Drug is a wholesale purchasing and distribution cooperative located in Altoona, Pennsylvania, that distributes pharmaceuticals, including controlled substances, to approximately 600 independent pharmacies located in Maryland, Pennsylvania and Ohio.

The settlement agreement was announced today by United States Attorney for the District of Maryland Rod J. Rosenstein and Special Agent in Charge Karl C. Colder of the Drug Enforcement Administration - Washington Field Division.

“Pharmacy wholesalers and retailers that fill unusually large or frequent orders for controlled substances without notifying the DEA violate the law and are subject to penalties,” said U.S. Attorney for the District of Maryland Rod J. Rosenstein. “Abuse of pharmaceutical drugs is one of the top federal law enforcement priorities.”

“DEA is responsible for ensuring that all controlled substance transactions take place within DEA regulatory closed system. All legitimate handlers of controlled substances must maintain strict accounting for all distributions and Value Drug failed to adhere to this policy,” stated Special Agent-in-Charge Karl C. Colder of the Drug Enforcement Administration’s Washington Division. “Oxycodone is a very addictive drug and failure to report suspicious orders of oxycodone is a serious matter. The civil penalty levied against Value Drug should send a strong message that all handlers of controlled substances must perform due diligence to ensure the public safety,” stated Colder.

The CSA requires distributors of pharmaceuticals, such as Value Drug, to identify and report suspicious orders of controlled substances, such as orders of unusual size, unusual frequency or those that substantially deviate from a normal pattern. The settlement resolves allegations that from January 1, 2009 through September 12, 2012, Value Drug failed to report suspicious orders of oxycodone to six pharmacy customers, including: Russo’s Pharmacy in Hagerstown, Maryland; Zonetak Pharmacy in Owings Mills, Maryland; Philly Pharmacy- Chestnut Avenue and Philly Pharmacy- Roosevelt Boulevard both located in Philadelphia, Pennsylvania; and East Hills Pharmacy and Johnstown Pharmacy, both in Johnstown, Pennsylvania.

As part of the settlement, Value Drug will also enter into a Memorandum of Agreement (MOA) with the DEA. The MOA will resolve administrative claims that the DEA has against Value Drug and will require that Value Drug implement more effective systems and measures to detect and report suspicious orders of controlled substances. The MOA will remain in place for a period of three years.

U.S. Attorney Rod J. Rosenstein commended the DEA’s Office of Diversion Control for its work in the investigation. Mr. Rosenstein thanked Assistant United States Attorney Thomas F. Corcoran, who handled the case.