DEA reverses decision stripping drug distributor of licenses for fueling opioid crisis

The U.S. Drug Enforcement Administration is allowing one of the nation’s largest wholesale drug distributors to stay in business, reversing an earlier order stripping the company of its licenses for its failure to properly monitor the shipment of tens of millions of addictive painkillers blamed for fueling the opioid crisis.

As part of the settlement announced Wednesday, Morris & Dickson Co. agreed to admit wrongdoing, comply with heightened reporting requirements and surrender one of its two certificates of registration with the DEA. The Shreveport, La.-based company, which has around 600 employees and generates about $4 billion a year in revenue, also agreed to forfeit $19 million.

Last May, DEA Administrator Anne Milgram revoked both of Morris & Dickson's licenses after an investigation by The Associated Press found the nation's fourth-largest drug distributor kept shipping drugs for nearly four years after a federal judge recommended the harshest penalty for its “cavalier disregard” of rules aimed at preventing opioid abuse.

“Of all the cases I handled as an administrative law judge for the DEA, Morris & Dickson’s violations were the most blatant and egregious,” Judge Charles Dorman told the AP. “In addition, I saw no real acceptance of responsibility for their violations.”

The yearslong delay in issuing the order shined a light on Washington's revolving door after the AP reported that Milgram's handpicked deputy at the DEA, Louis Milione, was previously a consultant for Morris & Dickson, Purdue Pharma and other drugmakers blamed for the opioid epidemic.

Last summer, Milione resigned for the second time from the DEA and returned to Guidepost Solutions, a New York-based private investigative firm that has advised drug makers and distributors, including Morris & Dickson, in the past. Guidepost didn't immediately respond to an email asking whether Morris & Dickson remains a client.

The DEA last year acknowledged the time it took to issue its final decision was “longer than typical for the agency” but blamed Morris & Dickson in part for holding up the process by seeking delays due to the COVID-19 pandemic and its lengthy pursuit of a settlement.

Morris & Dickson said Wednesday that it looks forward to future growth now that a case that threatened to put the 182-year-old company out of business had been resolved.

It said the settlement “recognizes our extensive and voluntary efforts to improve and enhance our compliance system over the past five years," the company said in a statement. "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 DEA, in a news release, did not say why it disavowed its earlier order that Morris & Dickson cease operations. However, it once again faulted the company for turning a blind eye to thousands of unusually large orders for hydrocodone and oxycodone.

“Today, Morris & Dickson takes an important first step by admitting wrongdoing and paying for its misconduct, and today’s settlement will ensure that such irresponsible practices will not continue in the future,” said DEA spokesperson Katherine Pfaff.

Neither the DEA or Morris & Dickson immediately responded to a request for comment.

While Morris & Dickson has managed to stay open, several of the pharmacies it supplied have closed, had their licenses revoked by the DEA or have been criminally prosecuted.

Among the more than 12,000 suspicious orders that Judge Dorman said Morris & Dickson should have reported to the DEA were 51 unusually large orders of opioids made by Wilkinson Family Pharmacy in suburban New Orleans.

Wilkinson purchased more than 4.5 million pills of oxycodone and hydrocodone from Morris & Dickson between 2014 and 2017, and federal prosecutors say during that time owner Keith Wilkinson laundered more than $345,000 from illegal sales made with forged prescriptions or written by “pill mill” doctors. In May, he was sentenced to six years in federal prison.

In one month, as many as 42% of all prescriptions filled by Wilkinson were for painkillers and 38% of those were paid for in cash. The DEA considers a pharmacy’s sales of controlled substances suspicious whenever they surpass 15% or cash transactions exceed 9%.

Yet Morris & Dickson never suspended any shipments to the pharmacy. Over three years, it filed just three suspicious order reports to the DEA – none of which resulted in shipments being suspended.

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Goodman reported from Miami, Mustian from New York