McLaren Health and feds reach record $7.75M settlement of drug allegations
McLaren Health Care Corp. agreed Tuesday to pay a record $7.75 million penalty to settle a federal investigation into officials distributing opioids and other drugs without prescriptions, the largest amount in U.S. history involving allegations of drug diversion.
The penalty settles a years-long investigation by the U.S. Drug Enforcement Administration into whether officials at the Grand Blanc-based health system violated federal drug laws by illegally distributing powerful pain medication central to the nation's opioid crisis.
The allegations primarily involved pharmacies at McLaren hospitals throughout the state, including in Port Huron and Yale. Investigators focused on whether drugs were being distributed without prescriptions and despite indications McLaren's pharmacist-in-charge was diverting prescription drugs.
McLaren officials have entered a three-year agreement to address the health system's drug-handling responsibilities, perform mandated audits of controlled substances and provide training on preventing drug diversion. The $6 billion health system operates 15 hospitals in Michigan and Ohio and a 490-member primary and specialty-care physician network.
"McLaren clearly didn’t have a sufficient system in place to catch these problems. But now, under this settlement, McLaren is stepping up and implementing more robust compliance measures," U.S. Attorney Matthew Schneider said in a statement. "At nearly $7.8 million, this is the largest civil Controlled Substances Act settlement in American history involving a health care system whose internal practices were so deficient that it allowed the diversion of drugs, including opioids."
McLaren fired one pharmacist accused of diverting opioids for his own use and launched a review of pharmacy protocols going back 12 years. The review uncovered bookkeeping irregularities and discovered drugs were being distributed at retail pharmacies under old protocols enacted before McLaren acquired those locations, the health system said in a statement Tuesday.
"Our health system takes compliance very seriously and regrets any instance in which we do not meet our regulators' requirements or our own high standards," April Rudoni, McLaren's interim compliance director and chair of the system's controlled substance oversight committee, said in a statement.
"From the moment the DEA's first concern was brought to our attention we have worked diligently to strengthen protocols across our system," Rudoni added.
McLaren got out of the retail pharmacy business in 2018 in an unrelated move that involved pharmacies linked to the DEA investigation, according to the health system’s statement.
Other aspects of the settlement include continuing and implementing several plans, including:
• An oversight committee that developed a system-wide drug diversion policy.
• Mandatory training for approximately 10,000 employees who have access to controlled substances.
• Creating teams and task forces to investigate possible drug diversion.
• Retaining an outside pharmacy management company to oversee inpatient pharmacies.
• Continuing to provide early-detection efforts to uncover possible drug diversion.
“Everyone from the manufacturer of a controlled substance to the prescribing healthcare provider has a legal obligation to ensure pharmaceuticals don’t get into the wrong hands,” DEA Special Agent in Charge Keith Martin said in a statement Tuesday.