UPS to pay $40M in online pharmacy probe

A United Parcel Service delivery man unloads boxes

A United Parcel Service delivery man unloads boxes from his truck outside a business in Washington, DC. (March 5, 2010) (Credit: Getty Images)

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United Parcel Service Inc. Friday agreed to forfeit $40 million to settle an ongoing federal investigation into prescription pill shipments for illicit online pharmacies, according to the U.S. Department of Justice.

The nonprosecution agreement came after a probe of companies that shipped powerful drugs without valid prescriptions that began in 2003, the government said. Some of the shipments covered by the agreement were to Long Island, two sources said.

UPS has cooperated fully with the investigation and already has adjusted its policies "to ensure illegal Internet pharmacies can no longer use its services to ship drugs," according to a statement issued by federal prosecutors in San Francisco, where the probe originated.

Meanwhile, the U.S. Drug Enforcement Administration is still scrutinizing thousands of shipments by FedEx, according to the two sources.

FedEx, the country's second-biggest shipping company after UPS, signaled Friday it did not plan to settle with the government.

"It is unclear what federal laws UPS may have violated," said Patrick Fitzgerald, FedEx's vice president of communications. "We remain confident that we are in compliance with federal law."

The U.S. attorney's office in the Northern District of California as well as a DEA spokesman declined to comment on the FedEx probe.

The probe involves FedEx shipments of prescription opioids -- including oxycodone and hydrocodone -- to customers who never met with a doctor, the two sources said. Some of those customers reside in Nassau and Suffolk counties, as well as New York City, the sources said.

 

FedEx: Give us listFitzgerald said the DEA should give FedEx a list of pharmacies "they believe are operating illegally so we can immediately shut off shipping services to those pharmacies."

Online pharmacies are not illegal, but a prescription based solely on an online questionnaire is not valid under federal law. The distribution of controlled substances without a valid prescription is illegal.

UPS and FedEx were initially served with subpoenas in the case at least six years ago, according to their corporate filings. UPS said in the documents it explored a settlement with the government as far back as November.

FedEx, on the other hand, has made no mention of a possible settlement in public statements by company officials or its corporate filings. A day before UPS settled with the government, Fitzgerald called the federal probe of FedEx "deeply disturbing" and a threat to the privacy of customers.

"We want to be clear what's at stake here: The government is suggesting that we assume responsibility for the legality and validity of the contents of the millions of sealed packages that we pick up and deliver every day. We are a transportation company -- we are not law enforcement, we are not doctors, and we are not pharmacists."

 

Curbing drug epidemicThe probe into transport companies is the latest in a series of investigations launched by the government aimed at curbing the nation's prescription drug epidemic, which claims the lives of at least 15,000 overdose victims each year, according to government statistics.

The DEA initially launched a spate of criminal cases against pain doctors, clinics, addicts and online pharmacies to deal with the epidemic. In recent years they have focused on companies involved in distribution of opioid drugs.

DEA officials brought an administrative action against Walgreen Co. last year. And Google paid a $500-million settlement in 2011 as part of a Justice Department probe into advertisements the company ran for online pharmacies.

Joni Kovacs, of Jericho, whose 22-year-old son, Steven, died of a prescription opioid overdose in 2009, said the probe into shipping companies could save lives.

"It's imperative we have more safeguards in place for packages [of pills] shipped," said Kovacs, whose son twice obtained drugs from online pharmacies without seeing a doctor. "These companies have to run a tighter ship or people will keep dying."

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