The company admits to wrongdoing and agrees to pay first-ever administrative forfeiture for failure to report thousands of suspicious orders of opioids.
WASHINGTON, D.C. – The U.S. Drug Enforcement Administration announced today a settlement with pharmaceutical distributor Morris & Dickson Co., LLC for failing to maintain effective controls against diversion of controlled substances, including failure to report to DEA thousands of unusually large orders of oxycodone and hydrocodone.
Morris & Dickson, which owned and operated two distribution centers registered with the DEA as distributors of Schedules II-V controlled substances, has admitted to all wrongdoing previously determined by the DEA Administrator and will surrender one of their two DEA Certificates of Registration (COR). Further, Morris & Dickson will maintain a compliance program and will comply with heightened reporting requirements to the DEA for a period of five years. As part of the settlement, Morris & Dickson has agreed to forfeit $19 million.
In a May 30, 2023, Decision and Order, DEA Administrator Anne Milgram found “long-term, egregious failures” by Morris & Dickson “in its responsibility as a distributor to maintain effective controls against diversion of controlled substances.” Morris & Dickson “failed to design and operate an adequate [suspicious order monitoring] system,” and “failed to investigate or report potentially thousands of suspicious orders of oxycodone and hydrocodone to DEA.” It “violated DEA regulations over a lengthy time period—failing to report a multitude of suspicious orders to DEA and depriving DEA of valuable information about pharmacies and practitioners who might have been engaging in diversion or violating their obligations as DEA registrants, thus contributing to the country’s devastating prescription drug abuse problem.”
“Drug distributors like Morris & Dickson have a responsibility to protect the safety and health of customers and maintain effective controls against diversion of highly addictive controlled substances. At the height of the opioid crisis, Morris & Dickson failed to uphold that responsibility, and turned a blind eye as thousands of unusually large orders for hydrocodone and oxycodone went out the door. Today, Morris & Dickson takes an important first step by admitting wrongdoing and paying for its misconduct, and today’s settlement will ensure that such irresponsible practices will not continue in the future,” said DEA spokesperson Katherine Pfaff.
From January 2014 until April 2018, the company shipped potentially suspicious orders to customers without resolving red flags of diversion or reporting the orders to DEA. Morris & Dickson also failed to adequately design and operate a system to alert DEA of suspicious orders of controlled substances and failed to report the suspicious orders in violation of 21 CFR 1301.74(b).
The Controlled Substances Act requires registrants to develop and operate a system to detect and report “suspicious orders” of controlled substances. The company has admitted to and accepted responsibility for its failures to effectively apply its due diligence in assessing orders of controlled substances, implement a suspicious order monitoring system “consistent with best practices for compliance,” and adequately resolve red flags on orders that it shipped.
In May 2018, DEA served Morris & Dickson an Order to Show Cause and Immediate Suspension of Registration, immediately suspending the company’s DEA CORs, and proposing to revoke those CORs.
On May 13-16, 2019, DEA held an administrative hearing on the Order to Show Cause before an Administrative Law Judge, who recommended both of Morris & Dickson’s CORs be revoked. The DEA Administrator published a Final Order revoking both of the company’s CORs on May 30, 2023.
DEA’s Diversion Control Division, DEA Chief Counsel’s Diversion Section Chief Paul Dean, and the New Orleans Field Division contributed to this case.
In fiscal year 2023, DEA served 143 administrative actions against doctors, pharmacies, drug manufacturers, and drug distributors who were putting the public at risk by failing to handle controlled substances with the care required by federal law. DEA remains committed to holding registrants accountable to ensure that they fulfill the responsibilities entrusted to them and to prevent the diversion of controlled substances and harm to our communities.
An Order to Show Cause is an administrative proceeding that requires a DEA registrant to demonstrate why the registration should not be denied, revoked, or suspended before such action is taken. When served an Order to Show Cause, the registrant has the opportunity submit a corrective action plan for DEA review before a determination is made. An Immediate Suspension Order is an immediate suspension of a DEA registration when it is determined there is “imminent danger to the public health or safety.” Complete information on these actions and related processes is available here.
