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Federal Contractor Misconduct Database (FCMD)

The federal government routinely awards contracts to companies with histories of misconduct, including contract fraud and other violations. POGO believes that providing this website will help to improve contracting decisions and increase public knowledge of how the government spends billions of taxpayer dollars each year. Read more…

Federal Settlement of Suspicious Order Reporting Practices

McKesson Corporation agreed to pay a $150 million civil penalty for alleged violations of the Controlled Substances Act. The nationwide settlement required McKesson to suspend sales of controlled substances from distribution centers in Colorado, Ohio, Michigan and Florida for multiple years. The settlement also imposed new and enhanced compliance obligations on McKesson’s distribution system. In 2008, McKesson agreed to a $13.25 million civil penalty and administrative agreement for similar violations (see McKesson instance, “Federal Drug Reporting Violations”). In this case, the government alleged again that McKesson failed to design and implement an effective system to detect and report “suspicious orders” for controlled substances distributed to its independent and small chain pharmacy customers – i.e., orders that are unusual in their frequency, size, or other patterns. From 2008 until 2013, McKesson supplied various U.S. pharmacies an increasing amount of oxycodone and hydrocodone pills, frequently misused products that are part of the current opioid epidemic. The government’s investigation developed evidence that even after designing a compliance program after the 2008 settlement, McKesson did not fully implement or adhere to its own program.

Misconduct Type
Health
Enforcement Agency
Multiple Agencies
Contracting Party
None
Court Type
Civil
Disposition
Settlement
Date of Settlement Agreement
1/17/2017
Contractors Involved Penalty
Total
McKesson $150,000,000
Further Information Released
Administrative Memorandum of Agreement 1/17/2017
Compliance Addendum 1/17/2017
DOJ Press Release 1/17/2017
McKesson Press Release 1/17/2017
Settlement Agreement 1/17/2017
McKesson Form 8-K 4/30/2015

See also:

Federal Contractor Misconduct Database