PR: Federal Court Orders Puerto Rico Pharmaceutical Distributor to Pay $12 Million in Connection with Alleged Failure to Report Suspicious Orders of Pharmaceutical Drugs and Other Controlled Substance Violations

A federal court in Puerto Rico entered a consent decree requiring Droguería Betances LLC (Betances), one of Puerto Rico’s largest distributors of pharmaceutical drugs, to pay $12 million and make extensive improvements to its compliance program, the Justice Department announced today.

The consent decree resolves a complaint filed by the United States on Nov. 3, alleging that from 2016 through at least June 2019, Betances failed to report to the Drug Enforcement Administration (DEA) hundreds of “suspicious orders” for opioids and other controlled substances distributed to Betances’ pharmacy customers — i.e., orders that were unusual in their frequency, size or other patterns. According to the complaint, this included at least 655 suspicious orders for fentanyl and at least 113 suspicious orders for oxycodone, both of which are frequently misused products that have been contributing to the current opioid abuse epidemic.

In addition, the complaint alleged that from May 2017 to July 2018, Betances failed to make required reports of its distribution transactions to DEA via an automated reporting system, including all of Betances’ distributions of Schedule II opioids during that period — more than 7.8 million dosage units. According to the complaint, Betances also committed hundreds of recordkeeping violations, such as filling orders for controlled substances with defective order forms and submitting inaccurate shipping or delivery information to DEA.

According to the consent decree, the Justice Department conducted an analysis of Betances’ financial condition in relation to its potential exposure to civil fines and forfeiture. Based in part on ability to pay, the consent decree requires Betances to pay $12 million over five years in annual payments, with $10.2 million in the form of civil penalties and $1.8 million in civil forfeiture.

The consent decree also requires Betances to make extensive improvements in its compliance program. Betances must implement improved controlled substance monitoring program procedures and systems to review all orders of controlled substances and to detect and report suspicious orders to DEA. Betances must also improve its procedures and systems for conducting due diligence reviews of its pharmacy customers. The consent decree further requires Betances to submit annual reports about its compliance program and customers to DEA and other Justice Department components. Betances must also improve its ARCOS reporting system to ensure proper and accurate reporting of all acquisitions and distributions of Schedule II controlled substances.

“Companies that distribute controlled substances to pharmacies and other points of sale have an important responsibility to help stop the illegal distribution of controlled substances by reporting suspicious orders to DEA,” said Principal Deputy Attorney General Brian M. Boynton, head of the Justice Department’s Civil Division. “The department will continue to work with its law enforcement partners to hold accountable those who fail to fulfill their reporting obligations.”

“The duty to report suspicious orders and other reporting requirements imposed on wholesale pharmaceutical distributors by the Controlled Substance Act is critical to ensuring the safety of our citizens from potential harm, including those associated with drug diversion, drug tampering and drug overdoses resulting from illegal drug sales and consumption,” said U.S. Attorney W. Stephen Muldrow for the District of Puerto Rico. “The U.S. Attorney’s Office will continue to do everything in our power to ensure compliance and will use all legal remedies available to hold corporate entities and individuals accountable.”

“As we continue to face unprecedented loss of American lives during the ongoing opioid epidemic, DEA believes that everyone within the pharmaceutical supply chain is responsible for doing their due diligence to prevent the diversion of controlled substances,” said Assistant Administrator Thomas W. Prevoznik of the DEA’s Diversion Control Division. “Compliance with the law is one of the best acts of prevention our registrants can do to ensure that these drugs are distributed for legitimate medical use. Reporting suspicious orders is required under the law and a key part in keeping our communities safe.”

The DEA’s Diversion Control Division, Caribbean Division, San Juan Division Office investigated the case.

Assistant U.S. Attorneys David O. Martorani-Dale and Gabriella S. Paglieri for the District of Puerto Rico and Trial Attorney Tom Rosso of the Civil Division’s Consumer Protection Branch represented the United States.

The claims resolved by the consent decree announced today are allegations only, and there has been no determination of liability.

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National Association of Drug Diversion Investigators Federal Tax ID: 52-1660752 / DUNS Number: 073539913

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