Cardinal loses this round of litigation with DEA over Lakeland DC suspension

The surprise suspension of Cardinal Health's Lakeland, FL distribution center to handle controlled substances is back in force. When the DEA action occurred on Feb. 3, Cardinal immediately moved for, and won, a temporary restraining order in federal court; in Cardinal Health Inc. v Holder, US District Court, District of Columbia, No. 12-185, Judge Reggie Walton has now agreed with DEA that the suspension is valid. The next step is an administrative law hearing within DEA, scheduled for Apr. 3; Cardinal, meanwhile, plans to appeal the federal ruling.

Fitch Ratings, a corporate-credit rating service, says that the suspension will have little effect on Cardinal's finances; the controlled substances distribution from Lakeland represents about 2% of the company's pharmaceutical volume. Cardinal has stated that it plans to fill Lakeland controlled-substances orders from DCs in Mississippi and North Carolina.

"We have genuine respect for the work of the DEA, but effectively addressing prescription drug abuse requires a very different approach than does the war on illicit drugs," Cardinal said in a statement issued after the ruling. "We want to work collaboratively with all participants in the drug supply chain — including regulators, pharmaceutical manufacturers, distributors, pharmacists, doctors and boards of pharmacy – to combat this serious nationwide issue. We want to be part of a new, more effective solution to stop prescription drug abuse, without disrupting legitimate use."

In other documents, Cardinal has pointed out that DEA receives data from pharmacies like those blamed for the high volume of controlled substances that were the cause of the suspension, and that DEA itself has noted that a decision on the legitimacy of drug orders from a pharmacy cannot be based solely on spikes in volume. (DEA has contended that over three million doses had been ordered by the pharmacies, while a "average" order volume would be around 69,000 annually.) In instituting the suspension, DEA claims that there is an "imminent danger to public safety," and, essentially, Judge Walton agreed.

Press reports indicate that the process of reviewing the suspension and possibly re-instituting Cardinal's license could take as long as a year.