Drug Distributor Surrenders DEA License Over Opioid Sales

By Pat Anson, PNN Editor

The nation’s largest independent pharmaceutical distributor has agreed to pay a $19 million fine and surrender one of its DEA licenses to settle long-standing charges that it ignored suspicious orders of opioid pain medication.

Louisiana-based Morris & Dickson delivers drugs to health systems, hospitals and independent pharmacies in 27 states. In 2018, the DEA suspended the company’s licenses to distribute opioids and other controlled substances, but delayed making a final decision on revoking them until last year. Morris & Dickson vowed to fight the revocation, saying it was “unwarranted and unjustified” and would essentially put the company out of business.   

After nearly a year of talks with the DEA, the two sides reached a settlement. In addition to the $19 million fine, Morris & Dickson “admitted to all wrongdoing” and agreed to surrender one of its two DEA Certificates of Registration. The company also promised to continue a heightened compliance system to flag suspicious orders of controlled substances.

“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,” DEA spokesperson Katherine Pfaff said in a press release. “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.”

In a brief statement on its website, Morris & Dickson acknowledged no wrongdoing and gave no indication of how its business operations would be impacted by the loss of one of its DEA licenses.

“Today’s announcement recognizes our extensive and voluntary efforts to improve and enhance our compliance system over the past five years. In fact, following our efforts, our state-of-the-art compliance program has been repeatedly acknowledged as impressive and above reproach by outside parties,” the company said. “We are very proud that throughout discussions with the DEA, we have continued to provide the highest levels of service.”

The DEA delayed revoking Morris & Dickson’s registration until the Associated Press reported last year that the company was still shipping opioids, despite a judge’s recommendation that its licenses be revoked for “cavalier disregard” of suspicious orders.

Complicating the case is that a top DEA official who retired from the agency in 2017 went to work as a consultant for Morris & Dickson and led efforts to improve its compliance system. Louis Milione “unretired” in 2021 and went back to work at the federal agency as the top deputy to DEA Administrator Anne Milgram. Milione resigned soon after the AP story was published, citing “person reasons.” He is now consulting again for the pharmaceutical industry.   

In fiscal year 2023, DEA said it took 143 administrative actions against doctors, pharmacies, drug makers and drug distributors for violations of the Controlled Substances Act, which regulates the prescribing, dispensing and distribution of opioids and other potentially addictive drugs.

In 2022, the nation’s three largest drug distributors – McKesson, AmerisourceBergen and Cardinal Health — agreed to strict limits on the amount of opioids and other controlled substances they sell as part of a $21 billion opioid litigation settlement.

Collectively, these various actions have led to tight supplies of opioid pain medication. In a recent survey of nearly 3,000 pain patients by PNN, over 90% of those with an opioid prescription said they experienced delays or problems at a pharmacy getting their medication. Nearly 20% of patients were unable get their prescriptions filled.

Drug Distributor Vows to Fight DEA

By Pat Anson, PNN Editor

The fourth-largest drug distributor in the U.S. is vowing to fight efforts by the Drug Enforcement Administration to strip it of its license to sell opioids and other controlled substances to pharmacies, hospitals and health systems in 27 states.

Such a move by the DEA, if carried out, would not only put Morris & Dickson out of business but could exacerbate already tight supplies of pain medication and drugs used to treat cancer and attention deficit disorder (ADHD). The company said it would “vigorously appeal” the license revocation and seek a stay in federal court.

“We strongly believe any attempt to revoke our registration would be unwarranted and unjustified. Most importantly, any decision the DEA makes will not disrupt our operations. Business will continue as usual, and orders will continue to go out on time,” the Louisiana-based company said in a statement on its website.

The DEA announced Friday that it would revoke Morris & Dickson’s license, but allowed 90 days before the order takes effect. The action stems from a DEA investigation that identified thousands of suspiciously large orders for oxycodone and hydrocodone that the company sold to independent pharmacies in Louisiana from 2014 to 2018. In some cases, according to the DEA, the pharmacies were allowed to purchase six times the amount of opioids that they would normally order.

The DEA suspended Morris & Dickson’s license in 2018, but then delayed making a final decision on revoking it, which allowed the company to continue to operate. That five year delay came to a sudden end this week, after the Associated Press reported that the DEA failed to stop the company from “shipping highly addictive painkillers,” even after a judge recommended that its license be revoked for its “cavalier disregard” of the suspicious orders.

Further complicating the case is that a top DEA official retired from the agency in 2017 and went to work for Morris & Dickson, leading efforts at the company to improve the way it identifies and reports suspicious orders. Louis Milione “unretired” in 2021 and went back to work at the DEA as principal deputy administrator.    

Morris & Dickson spent millions of dollars improving its compliance system, but that was not enough for DEA Administrator Ann Milgram, who has come under increasing fire for her personnel decisions at the agency.

“Respondent (Morris & Dickson) has not adequately convinced the Agency that it can be entrusted with a registration — its acceptance of responsibility did not prove that it or its principals understand the full extent of their wrongdoing, the effect that it had on the Agency and the American public, and the potential harm that it caused. It was Respondent's burden to prove that it could be entrusted to protect the public interest in maintaining a DEA registration — and it has failed to do so,” Milgram said in her 68-page order.

Milgram said she would deny any application by Morris & Dickson to renew or modify its registration, and said her order would become final on August 28, 2023.

The company, however, said it would continue its “ongoing discussion” with the DEA to keep its license.

“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 company said. “We remain confident we can achieve an outcome that safeguards the supply chain for all of our healthcare partners and the communities they serve.”

That supply chain has been severely strained in recent years, not only by the pandemic, but by DEA actions that reduced the supply of opioids and other controlled substances.

In March, the American Society of Health-System Pharmacists added oxycodone to its list of drug shortages, after generic drug makers Amneal, Camber and Rhodes Pharmaceuticals reported they were running out of some doses of oxycodone tablets.

This month Teva Pharmaceutical said it would discontinue production of immediate release oxycodone and scale back its generic drug business to focus on more profitable medications.

The nation’s three largest drug distributors – McKesson, AmerisourceBergen and Cardinal Health — have already imposed strict limits on the amount of opioids and other controlled substances they sell as part of a $21 billion opioid litigation settlement. Whether they would be able to take on additional customers and supply them with essential medications that Morris & Dickson now provides is an open question.

“It’s hard to say what the overall impact would be. I don’t know how many pharmacies or hospitals are only serviced by Morris & Dickson,” says Erin Fox, PharmD, Senior Pharmacy Director at University of Utah Health, who has been tracking drug shortages for over 20 years. “They would have to establish contracts with another wholesaler. If pharmacies and hospitals have a secondary wholesaler, then they should be able to access opioids to dispense for patients.”