April 15, 2020

A drug distribution company pleaded guilty in February to selling farm-use prescription drugs to people who lacked prescriptions and resellers who were unlicensed to receive them.

The company also sent prescription drugs to states where the company had failed to maintain drug distribution licenses, according to prosecutors.

Animal Health International Inc. agreed to forfeit about $47 million gained from illegal shipments, pay a $5 million fine, and pay $1 million to the Virginia Department of Health Professionals to settle charges of introducing and delivering misbranded prescription drugs into interstate commerce, according to an announcement from the U.S. Attorney’s Office in the Western District of Virginia. AHI’s parent company, Patterson Companies Inc., also agreed to improve compliance with federal and state laws.

Patterson Companies spokeswoman Bria Townshend provided a statement that the company worked with the government over the prior 18 months to resolve the investigation, and the company made substantial organizational and cultural changes focused on strengthening regulatory and compliance processes.

“We’ve made significant enhancements and modifications to our prescription drug licensing, dispensing, distribution and related sales practices that are designed to drive compliance with applicable laws in our industry and continue to meet the needs of our customers,” company officials said. “We’ve brought people on board with extensive regulatory affairs experience, invested in external subject matter expertise, and continue to train our employees and monitor activity to ensure that the activity described in our settlement with the government does not reoccur.”

The charges against AHI originated from at least $54 million worth of drug sales. About $7.4 million of those sales involved two longtime AHI customers who pleaded guilty in 2016 and 2017 to working with a Tennessee-based veterinarian to obtain fraudulent prescriptions so they could sell AHI drugs, according to court documents.

The Tennessee veterinarian, who died in 2015, worked with Marlin Webb and Billy K. Groce to write prescriptions for animals in Virginia despite never seeing the animals and being unlicensed in Virginia, court documents state. Webb and Groce filled the prescriptions through AHI, although they sometimes ordered prescription drugs without any prescriptions, court documents state.

Groce received a sentence of four months imprisonment, and Webb received probation.