Costco will pay $11.75 million to settle allegations that some of its pharmacies in Washington and elsewhere improperly filled prescriptions for controlled substances and failed to properly track opioids and other dangerous drugs, the U.S. Justice Department said Thursday.
Costco will pay the U.S. government $11.75 million to settle allegations that some of its pharmacies improperly filled prescriptions for controlled substances, the U.S. Justice Department said Thursday.
The Justice Department alleged that Costco pharmacies filled prescriptions that were incomplete, lacked valid Drug Enforcement Administration (DEA) numbers or were for substances beyond some doctors’ scope of practice, and that Costco failed to keep and maintain accurate records for controlled substances, according to a news release from the department.
The pharmacies involved were in Washington, California and Michigan, according to the settlement agreement.
The Justice Department said that under the settlement, which was reached Wednesday, Costco acknowledged that some of its pharmacies had violated the Controlled Substances Act by “filling prescriptions from practitioners who did not have a valid DEA number; incorrectly recording the practitioner’s DEA number; filling prescriptions outside the scope of a practitioner’s DEA registration; filling prescriptions that did not contain all the required information; failing to maintain accurate dispensing records; and failing to maintain records for their central fill locations in Sacramento, California and Everett, Washington.”
Annette Hayes, U.S. Attorney for the Western District of Washington, said in a statement that “pharmacies across this country are on the leading edge of the battle against our prescription drug abuse crisis… A company such as Costco that distributes a significant volume of controlled substances has a responsibility to ensure it complies with regulations that help prevent opioids and other dangerous drugs from being misused or otherwise added to the illegal marketplace.”
Eileen Decker, U.S. Attorney for the Central District of California, said: “These are not just administrative or paperwork violations – Costco’s failure to have proper controls in place in its pharmacies played a role in prescription drugs reaching the black market.”
Costco said in a statement that it cooperated fully with the DEA’s investigation.
“Recognizing the significant role recordkeeping practices and systems have in preventing opioid drug abuse, Costco independently began updating its technology and recordkeeping procedures in early 2012 and has an ongoing compliance program, with an emphasis on controlled substances,” the company said in its statement.
Its improvements include a new $127 million pharmacy management system and other technology to identify potential controlled substance prescribing concerns, the compoany said. It also created a three-tier audit program of its pharmacies that will include internal and external auditors.
“Costco voluntarily implemented these enhanced operational practices and pharmacy management systems independently of the settlement agreement with the DEA,” the company said. “Costco believes that at no time did its conduct put at risk the health or safety of our members or the public.”
The settlement agreement covers the period between Jan. 1, 2012, and Dec. 31, 2015, though Costco said it believes the alleged violations occurred between May 2011 and November 2013.
Costco has agreed to allow the DEA to conduct unannounced and unrestricted inspections of all DEA-registered Costco pharmacies over the next three years.