The U.S. Drug Enforcement Administration stripped one of the nation's largest drug distributors of its license to sell highly addictive painkillers Friday after determining it failed to flag thousands of suspicious orders at the height of the opioid crisis.
The action against Morris & Dickson Co., which threatens to put the company out of business, came two days after an Associated Press investigation found the DEA allowed the company to keep shipping drugs for nearly four years after a judge recommended the harshest penalty for its "cavalier disregard" of rules aimed at preventing opioid abuse.
The DEA acknowledged the time it took to issue its final decision was "longer than typical for the agency" but blamed Morris & Dickson in part for holding up the process by seeking delays due to the COVID-19 pandemic and its lengthy pursuit of a settlement that the agency said it had considered. The order becomes effective in 90 days, allowing more time to negotiate a settlement.
12,000 unusually large orders
DEA Administrator Anne Milgram said in the 68-page order that Morris & Dickson failed to accept full responsibility for its past actions, which included shipping 12,000 unusually large orders of opioids to pharmacies and hospitals between 2014 and 2018. During this time, the company filed just three suspicious order reports with the DEA.
Milgram specifically cited testimony of then-company president Paul Dickson Sr. in 2019 that Morris & Dickson's compliance program was "dang good," and he didn't think a "single person has gotten hurt by [their] drugs."
"Those statements from the president of a family-owned and -operated company so strongly miss the point of the requirements of a DEA registrant," she wrote. "Its acceptance of responsibility did not prove that it or its principals understand the full extent of their wrongdoing ... and the potential harm it caused."
Roots go back to 1840
Shreveport, Louisiana-based Morris & Dickson traces its roots to 1840, when its namesake founder arrived from Wales and placed an ad in a local newspaper selling medicines. It has since become the nation's fourth-largest wholesale drug distributor, with $4 billion a year in revenue and nearly 600 employees serving pharmacies and hospitals in 29 states.
In a statement, the company said it has invested millions of dollars over the past few years to revamp its compliance systems and appeared to hold out hope for a settlement.
"Morris & Dickson is grateful to the DEA administrator for delaying the effective date of the order to allow time to settle these old issues," it said. "We remain confident we can achieve an outcome that safeguards the supply chain for all of our health care partners and the communities they serve. ... Business will continue as usual and orders will continue to go out on time."
Morris & Dickson's much larger competitors, a trio of pharmaceutical distributors known as the Big Three, have already agreed to pay the federal government more than $1 billion in fines and penalties to settle similar violations. Cardinal Health, AmerisourceBergen and McKesson also agreed to pay $21 billion over 18 years to resolve claims as part of a nationwide settlement.
While Morris & Dickson wasn't the only drug distributor whom the DEA accused of fueling the opioid crisis, it was unique in its willingness to challenge those accusations in the DEA's administrative court.