OR WAIT null SECS
© 2023 MJH Life Sciences™ and Pharmaceutical Commerce. All rights reserved.
Dispute continues the ongoing battles between drug distributors and DEA
According to statements from the US Attorney, Northern District of California, and FedEx, the US Dept. of Justice is charging FedEx with “conspiracy to traffic in controlled substances,” mostly arising from the practice, common several years ago but less so now, of handling shipments from online “pharmacies” (many of which are not actually pharmacies) that sell controlled substances and other drugs to US consumers directly. FedEx is entangled in this dispute because it handled the shipments, which date back to 2004.
In a statement from the company, Patrick Fitzgerald, SVP of marketing and communications, wrote: “FedEx is innocent of the charges … we will plead not guilty. We want to be clear what’s at stake here: the government is suggesting that FedEx assume criminal responsibility for the legality of the contents of the millions of packages that we pick up and deliver every day. We are a transportation company — we are not law enforcement. We have no interest in violating the privacy of our customers. We continue to stand ready and willing to support and assist law enforcement. We cannot, however, do the job of law enforcement ourselves.”
The federal indictment charges FedEx with, among other things, establishing an “Online Pharmacy Credit Policy requiring that all online pharmacy shippers be approved by the Credit Department prior to opening a new account,” as well as ignoring numerous warnings from DEA, FDA and even its own employees about illicit shipments. FedEx will appear in court on July 29.
It has been the contention of DEA and the Dept. of Justice for several years that companies involved in shipping and delivering controlled substances must ensure that both providers and shipment recipients are authorized (licensed) to make or receive these shipments. In “normal” distribution, a licensed manufacturer of such drugs ships them to a licensed pharmacy; paperwork follows the shipment, at least when the shipping and receiving is occurring within US borders. In the case of illicit online pharmacies (which, technically, aren’t allowed to fill prescriptions unless they are sited in the US), offshore organizations accept orders from individuals—especially via the Internet—and then look to carriers like FedEx to complete the shipment.
Even in normal distribution deliveries, DEA has charged, among others, all of the Big Three wholesalers, CVS and other pharmacies with violating DEA rules on controlled substances shipping. UPS, which was caught up in the same investigations that FedEx is now dealing with, settled with the Dept. of Justice in a “non-prosecution agreement” in 2013; at that time, FedEx said that it would “vigorously defend itself.” When Cardinal Health settled with the Dept. of Justice in 2012, it had to cease distribution of controlled substances for several yrears from its Lakeland, FL, distribution center.
Since the mid-2000s, when both DEA began enforcing its statutes more aggressively, and online-pharmacy activity grew (and the problem of prescription drug abuse skyrocketed), much of the industry—wholesalers, pharmacies and logistics providers—have adopted “suspicious order monitoring” (SOM) systems to track unusual volumes of controlled-substances sales and deliveries; it’s not known whether FedEx has implemented such systems. The Healthcare Distribution Management Assn. (Arlington, VA) issued an “Industry Compliance Guideline” in 2008 (updated last year) on SOM systems and compliance practices, while the association’s president, John Gray, expressed support for a bill currently in Congress (HR 4069). HDMA has contended—like FedEx—that DEA is in effect deputizing distibutors to enforce federal law. “What we are seeking is clarity and consistency to ensure that public health needs are adequately addressed in a balanced, collaborative and effective manner,” said Gray in testimony before the House Energy and Commerrce Committee Subcommittee on Health.
The Dept. of Justice implies that upwards of $1.84 billion could be disgorged from FedEx for the alleged violations. While UPS’ settlement was for $40 million; the Dept. of Justice succeeded in getting $500 million from Google in a case related to illicit online pharmacy activity.