Prescription drug distributor H.D. Smith Wholesale Drug Co. has agreed to pay $3.5 million to settle a 4-year-old lawsuit that alleges the company failed to report suspicious orders from West Virginia pharmacies, state officials announced Tuesday.
The settlement is the largest to date in a 2012 lawsuit filed by then-Attorney General Darrell McGraw against more than a dozen drug distributors that shipped massive quantities of painkillers to West Virginia. The settlement money will go to substance abuse prevention and treatment programs.
H.D. Smith denied any wrongdoing. The company, however, agreed to comply with state law and report suspicious drug orders — those of unusually high quantity and frequency, according to a news release.
Between 2007 and 2012, H.D. Smith shipped 13.7 million hydrocodone pills and 4.4 million oxycodone tablets to West Virginia, according to U.S. Drug Enforcement Administration data obtained by the Gazette-Mail. The company was the eighth-largest distributor of those two painkillers during the six-year period.
In a news release, Attorney General Patrick Morrisey’s office said, “All parties agreed to the settlement to avoid the delay, expense, inconvenience and uncertainty of protracted litigation.”
Morrisey inherited the lawsuits against wholesalers when he took office in 2013. The Department of Health and Human Resources and the Department of Military Affairs and Public Safety have since joined the lawsuit as plaintiffs.
Last week, Boone County Circuit Judge Will Thompson issued an order notifying the court that the state had settled lawsuits against Cardinal Health and AmerisourceBergen, two of the largest drug wholesalers in West Virginia. State officials are expected to announce the settlement amount at a news conference on Jan. 9. Both sides are keeping the settlement terms confidential until then.
Previous settlements, with nine smaller wholesalers, have netted the state more than $7.5 million.
H.D. Smith has agreed to pay the state $3.5 million within 45 days.
Last month, the Gazette-Mail reported that drug wholesalers did not report suspicious orders of controlled drugs to the West Virginia Board of Pharmacy for more than a decade, despite a state rule requiring them to do so. The state pharmacy board also neglected to enforce the reporting requirement.
The newspaper’s “Painkiller Profiteers” series also found that drug wholesalers shipped 780 million hydrocodone and oxycodone pills to the state in just six years, a period when 1,728 West Virginians fatally overdosed on those two painkillers. Southern West Virginia received a disproportionate number of pain pills, and the region has the highest drug overdose death rate in the nation.
The drug wholesalers argue that they filled valid prescriptions from licensed doctors and pharmacists.