Costco Wholesale has agreed to pay $11.75 million to settle a
lawsuit stemming from allegations that its pharmacies violated the
Controlled Substances Act (CSA) by filling prescriptions for
The settlement was announced by
attorneys from the central and eastern districts of California and
the states of Washington and Michigan.
were accused of filled prescriptions that were incomplete, were
outside the prescribing doctor's scope of practice, or did not have
valid Drug Enforcement Administration (DEA) registration numbers.
They were also accused of irregular record-keeping issues.
this settlement demonstrates, federal authorities have identified
problems with pharmacies," Thom Mrozek, public affairs officer
for the U.S. Attorney’s Office for the Los Angeles District of
California, told the Southern California Record. "In
fact, just this week, we saw the conviction of two men who owned a
pharmacy that was involved in the diversion of prescription
Mrozek was referring to two brothers who
owned Global Compounding Pharmacy, a West Los Angeles pharmacy and were found guilty of an operation that included narcotic drug
trafficking and money laundering activity that illegally sold
prescription narcotics to the black market across the United States.
The brothers face over 300 years each in federal prison and are
scheduled to be sentenced on March 29.
Under the Costco
settlement, the company admits that from 2012 through 2015, several
of its pharmacies handed out controlled substances that did not
comply with the CSA. It also agreed that for three years, it would
allow the DEA to go to DEA-registered Costco pharmacy locations
unannounced and without inspection warrants to ensure that the
pharmacies are complying with federal law.
settlement resolves an important investigation and is one more step
toward ensuring that prescription drugs are not diverted to
non-legitimate uses,” Mrozek said.
Costco yielded its DEA
registration at the central fill location in West Sacramento where
inventory shortages were found. The facility can no longer handle
In addition, pharmacy improvements have been
made to assist with the maintenance of records, including a new
pharmacy management system that cost of $127 million. A three-tier
audit system for Costco’s pharmacy locations has also been
Mrozek hopes the Costco settlement will put
pharmacies on notice.
“We hope that every case we do has a
deterrent effect by dissuading other would-be violators from breaking
the law,” he said.