Recently, the United States Drug Enforcement Administration (DEA) announced that, barring a settlement, it will revoke Morris & Dickson’s license to sell and ship opioid medications and other controlled substances as of August 28, 2023. In the decision and order published in the Federal Register on May 30, 2023, the DEA affirmed a 2019 Administrative Law Judge’s (ALJ’s) decision to revoke DEA registrations held by Morris & Dickson, the United States’ fourth largest wholesale drug distributor.
Background
Morris & Dickson was accused of failing to accept responsibility for its prior actions, including shipping 12,000 unusually large orders of opioids to pharmacies and hospitals from 2014 to 2018. The DEA notes that Morris & Dickson received purchases from “high-volume independent pharmacies” in Louisiana that were “purchasing quantities which were not indicative of the pharmaceutical market” and some were purchasing more Oxycodone and Hydrocodone than the larger chain pharmacies – sometimes more than 10 times the amount of narcotics the average Louisiana pharmacy purchased per month. Despite the large number of unusual orders, the company only filed three suspicious order reports with the DEA during that time frame, an indication that the company did not have a suspicious order monitoring system in place. Additionally, the company failed to maintain effective controls against diversion of drugs by distributing controlled substances without performing adequate customer due diligence.
On May 4, 2018, the DEA announced an Immediate Suspension Order on Morris & Dickson, immediately suspending the DEA Certificate of Registration issued to the company as the DEA felt that “the continued registration of this company constitutes a substantial likelihood of imminent danger to public health and safety.”
Morris & Dickson appealed that decision, and an administrative hearing was held on the matter in May 2019. After that administrative hearing, that suspension was recommended to become a revocation by ALJ Charles W. Dorman in November 2019. According to the Associated Press, the 2019 ALJ decision noted that while Morris & Dickson may have made some revisions to their procedures, anything less than revocation of the license “would communicate to DEA registrants that despite their transgressions, no matter how egregious, they will get a mere slap on the wrist and a second chance so long as they acknowledge their sins and vow to sin no more.” The judge went on to note that “allowing [Morris & Dickson] to keep its registration would tell distributors that it is acceptable to take a relaxed approach to DEA regulations until they are caught, at which point they only need to throw millions of dollars at the problem to make the DEA go away.”
However, instead of issuing a decision and order shortly after the ALJ decision, the DEA took several years. During that time, Morris & Dickson was still able to distribute controlled substances, despite the strong words in the ALJ’s decision – and the DEA’s strong words in the final decision and order. The decision and order took “longer than typical for the agency” in part because of the COVID-19 pandemic and actions taken by the company.
Complicating matters – and frustrating some – was an Associated Press investigation that found that a top DEA official previously served as a consultant for Morris & Dickson as part of the company’s attempt to avoid revocation or other punishment. The DEA says after the individual returned to work for the DEA, they were recused from any participation in the Morris & Dickson matter.
Decision and Order
In the lengthy decision and order, the DEA only briefly mentioned the remedial steps the company took with respect to its compliance program. The DEA noted that Morris & Dickson reported nearly 4,000 suspicious orders to the DEA in a two-month period after the original 2018 orders.
However, the DEA took issue with the lack of acceptance of responsibility for past misconduct and the way the company seems to have tried to mischaracterize the DEA regulations as best practices, not legal requirements. DEA Administrator Anne Milgram therefore revoked the DEA Certificates of Registration that have been issued to Morris & Dickson.
Company Response
The company has referred to revocation of their license as a “virtual death sentence” as it would preclude their ability to distribute prescription medications. Morris & Dickson sent a comment to NPR, however, saying that it is still in talks with the DEA to avoid the revocation. “Morris & Dickson is grateful to the DEA Administrator for delaying the effective date of the order to allow time to settle these old issues, which has been our goal since this started years ago,” the statement said. The company also claimed to have updated its “compliance systems and processes” as part of this process. It’s also possible that the company will file an appeal of the decision in federal court.
Barring any settlement agreement, the revocation will be effective on August 28, 2023.
Civil Penalty Claims
Morris & Dickson also reached a $22 million settlement with the Department of Justice in 2019 to settle allegations that the company violated the Controlled Substances Act by failing to report suspicious orders of Hydrocodone and Oxycodone. It was through that settlement that the company agreed to “make significant upgrades to its compliance program by investing millions of dollars to hire additional staff and implement new protocols and standards to ensure compliance with federal regulations requiring them to report suspicious orders of controlled substances.”