- Associated Press - Wednesday, January 18, 2017

LA CROSSE, Wis. (AP) - McKesson Pharmaceuticals has announced plans for layoffs at its La Crosse distribution center after paying a record $150 million civil penalty for alleged violations of the Controlled Substances Act.

A total of 67 employees will lose their jobs starting March 31 as the San Francisco-based company merges its operations at a new distribution facility in Clear Lake, Iowa, the La Crosse Tribune (https://bit.ly/2jnt3g9 ) reported. The Wisconsin Department of Workforce reported the closure Tuesday, but it was originally announced in February 2015.

The layoffs come as the center agreed to pay a settlement, which requires McKesson to suspend the sale of controlled substances from distribution centers in Colorado, Florida, Michigan and Ohio, according to the U.S. Attorney’s office. It also imposes new compliance obligations on McKesson’s distribution system.

McKesson spokeswoman Kristin Hunter said the settlement and the layoffs are unrelated.

Federal prosecutors said the company didn’t implement a system to detect and report suspicious orders to its customers, which include chain store and independent pharmacies. McKesson shipped a growing volume of hydrocodone and oxycodone, two frequently abused opioid pain relievers, between 2008 and 2013.

The most recent settlement is the second such penalty against McKesson in the past decade. The company was fined $13.25 million in 2008.

A multi-state investigation found that McKesson didn’t abide by a compliance program it was required to set up after the 2008 settlement.

McKesson flagged only 16 controlled substance orders as suspicious out of 1.6 million such orders processed at its Colorado distribution center, according to the U.S. Attorney’s Office for western Wisconsin. The La Crosse distribution center didn’t file any suspicious order reports between 2008 and an April 2013 inspection by the Drug Enforcement Administration.

As part of the new settlement, the company agreed to enhanced compliance for the next five years, including staffing and organizational improvements, periodic audits and financial penalties for failing to comply.

“The quality and integrity of the McKesson employees in La Crosse is unmatched, and we’re confident that they will be an asset for future employers in the La Crosse area,” McKesson officials said in a written statement to the newspaper.

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Information from: La Crosse Tribune, https://www.lacrossetribune.com

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