Cardinal Health Inc. plans to appeal a federal court ruling that upholds an order to suspend its license to ship controlled substances from its Lakeland, Fla., distribution center.

Cardinal Health, controlled substances, Drug Enforcement Administration, DEA, U.S. District Court for the District of Columbia, license suspension, Lakeland distribution center, oxycodone, pharmaceutical distributor, pharmaceutical, CVS, U.S. District Court Judge Reggie Walton, drug diversion, prescription drug abuse, Russell Redman

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Cardinal Health to appeal license suspension in Fla.

March 1st, 2012

DUBLIN, Ohio – Cardinal Health Inc. plans to appeal a federal court ruling that upholds an order to suspend its license to ship controlled substances from its Lakeland, Fla., distribution center.

Cardinal said late Wednesday that the U.S. District Court for the District of Columbia denied its Feb. 3 motion for a preliminary injunction against the Drug Enforcement Administration's immediate suspension of its license to distribute controlled substances from the Lakeland facility.

"We disagree with this decision and have noticed our appeal of this decision to the U.S. Court of Appeals for the D.C. Circuit," Cardinal said in a statement Wednesday. "Our contingency plans will be immediately activated, and we will make every effort to meet our customers' needs with minimal disruption."

The pharmaceutical distributor had been granted a temporary restraining order that enabled it to resume shipments of such medications from the Lakeland distribution center to hospital and pharmacy customers, pending the outcome of the hearing on the preliminary injunction.

Early last month, the DEA issued immediate suspension orders (ISOs) to Cardinal's Lakeland facility and four of its pharmacy customers, including two CVS drug stores in Sanford, Fla. The agency alleged that the distribution center failed to control the diversion of controlled substances into other than legitimate channels and didn't perform due diligence to ensure that those drugs weren't diverted.

The DEA claimed in its ISO that Cardinal knew or should have known that the pharmacies were improperly filling prescriptions for nonmedical reasons, citing higher volumes of controlled substance shipments to those pharmacies. The agency reported that the pharmacies were filling prescriptions "far in excess of the legitimate needs of its customers." The DEA said the two CVS stores, located approximately 5.5 miles apart, together ordered more than 3 million dosage units of oxycodone during the same year, whereas the average U.S. pharmacy in 2011 ordered roughly 69,000 oxycodone dosage units.

In announcing that it would seeking a restraining order, Cardinal called the DEA's action a "drastic overreaction." The company said the move would disrupt pharmaceutical shipments to over 2,500 pharmacy customers in Florida, Georgia and South Carolina and that it had halted distributions to two of the four pharmacies. The distributor also noted that it "has robust controls and performs careful due diligence" and that "the DEA itself has stated that the volume of controlled substances alone is inconclusive evidence of diversion."

However, on Wednesday, U.S. District Court Judge Reggie Walton concluded that the DEA's suspension of Cardinal's license to ship controlled substances was justified after the agency had supplied more information on the matter.

"We have demonstrated a deep commitment in helping fight prescription drug abuse. We work hard to actively prevent drug diversion and have spent millions of dollars to build a system of advanced analytics and on anti-diversion specialists," Cardinal stated Wednesday in announcing its intention to appeal the decision. "We have stopped distributing to hundreds of pharmacies determined to pose an unreasonable risk of diversion. The majority of those pharmacies still maintain their DEA registrations to dispense controlled medicines. We have also collaborated with industry experts to create programs to educate young people, parents, teachers and communities about medication safety and the dangers of prescription drug abuse."

Cardinal added, "Effectively addressing prescription drug abuse requires a very different approach than does the war on illicit drugs. We want to work collaboratively with all participants in the drug supply chain — including regulators, pharmaceutical manufacturers, distributors, pharmacists, doctors and boards of pharmacy — to combat this serious nationwide issue. We want to be part of a new, more effective solution to stop prescription drug abuse, without disrupting legitimate use."

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