Cardinal Health, Inc. (CAH) Forced to Pay $86 Million in Penalties
In August 2005, Cardinal Health, Inc. (CAH) learned in discussions with DEA officials that it was distributing excessive amounts of prescription opioids. Despite this knowledge, Cardinal Health failed to take any corrective actions and the DEA suspended the Company’s controlled-substance distribution licenses. Then, in 2008, Cardinal Health paid a $34 million civil penalty for violations of the Comprehensive Drug Abuse Prevention and Control Act of 1970 (“CSA”). In addition to the penalty, the Company agreed to “maintain a compliance program designed to detect and prevent diversion of controlled substances required under the CSA and applicable DEA regulations” and “inform [the] DEA of suspicious orders [as required by the CSA].” However, Cardinal Health’s board took no action to ensure the efficacy of the Company’s anti-diversion program nor its compliance with the CSA and 2008 settlement, thus resulting in yet another settlement with the DEA in 2012. This negligence persisted as the opioid crisis exacerbated, and in 2016, Cardinal Health was forced to pay yet another penalty of $44 million to the DEA to resolve allegations. As a result of Cardinal Health’s officers and directors’ misconduct, the Company has been forced to pay $86 million in fees and penalties and will likely cost the Company billions more.
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