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Mallinckrodt to pay settlement for not reporting orders or keeping accurate records.
Pharmaceutical manufacturer Mallinckrodt LLC has agreed to pay $35 million in civil penalties to settle allegations that it violated requirements in monitoring their production and distribution of generic oxycodone.
The settlement was announced on July 11 by U.S. Attorney General Jeff Sessions, who expressed hope that it would inform drugmakers about their role in curbing the opioid epidemic.
“In the midst of one of the worst drug abuse crises in American history, the Department of Justice has the responsibility to ensure that our drug laws are being enforced and to protect the American people,” said Sessions.
It is the first settlement of its size penalizing a company for its inability to detect and notify the DEA of suspicious orders of controlled substances, including opioids such as oxycodone.
Pharmaceutical companies are required to monitor sales of controlled substances, especially oxycodone, which plays a significant part in the opioid epidemic.
The government alleged that Mallinckrodt did not design or implement an effective system to detect and report “suspicious orders” for controlled substances, which resulted in an increasingly excessive quantity of oxycodone pills being supplied between 2008 and 2011.
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“Manufacturers and distributors have a crucial responsibility to ensure that controlled substances do not get into the wrong hands,” said DEA Acting Administrator Chuck Rosenberg. “When they violate their legal obligations, we will hold them accountable.”
In a statement released by Mallinkrodt, the company’s general counsel Michael-Bryant Hicks noted that the settlement did not necessarily reflect the company’s position or constitute an admission of guilt.
"While Mallinckrodt disagreed with the U.S. government's allegations, we chose to resolve the legacy matter in order to eliminate the uncertainty, distraction and expense of litigation and to allow the company to focus on meeting the important needs of its patients and customers," said Hicks.
The government also alleged that Mallinckrodt did not adequately record pill production at its manufacturing facility in upstate New York, citing discrepancies between the number of tablets manufactured in a batch and the number reported.
In addition to the monetary penalty, this settlement includes an agreement between Mallinckrodt and the DEA to implement data analysis of customer orders to identify suspicious sales. Mallinckrodt, which is based in England but has its U.S. headquarters in St. Louis, has already begun implementing this measure.