Covetrus to pay $23M in fines for misbranded drugs
Covetrus’ North American subsidiary pleaded guilty in federal court on February 12 to introducing and delivering misbranded veterinary prescription drugs into interstate commerce. As part of the agreement, Covetrus will serve up to three years of probation and pay more than $23 million in criminal fines and forfeitures.
The global animal health company, based in Portland, Maine, provides pharmacy services for companion, equine, and large animal veterinary markets.
Covetrus shipped more than $20 million in misbranded veterinary prescription drugs from March 2019 to December 2021 from its wholesale locations to end users in states where such shipments were illegal, according to the United States Attorney’s Office of the Western District of Virginia.
The shipments in question from Covetrus failed to include adequate directions for use and, therefore, were misbranded. The prescription drugs were also distributed to unauthorized customers, according to court documents. No information was given on the types of drugs that were sent, their quantity, or who the unauthorized recipients were, though, they included personal accounts.
The Food and Drug Administration (FDA) regulates animal drugs to protect both animal and public health. This includes ensuring that prescription animal drugs are lawfully distributed and dispensed using a valid prescription under the Food, Drug, and Cosmetic Act (FDCA).
“The FDCA’s restrictions on veterinary prescription drugs not only protect animals from the potential harms of prescription drugs, but are, in part, to prevent overuse of antibiotics and other prescription drugs which can lead to development of drug-resistant bacteria and microbes,” the court documents state. “In addition, the FDCA’s restrictions also ensure that drugs are shipped to locations where the drugs will be properly stored to ensure the drugs remain viable and to prevent diversion. Also, as to drugs used by animals that are in the human food supply, the restrictions protect the human food supply from unsafe drug residue in the edible tissues of animals sold for slaughter.”
As part of the plea agreement, Covetrus will forfeit $21.5 million of misbranded drug income. The company will also pay $1 million to the Virginia Department of Health Professions (VDHP) and a $1 million fine. Additionally, the company will be on probation for up to three years and must take appropriate compliance measures to prevent violations in the future.
The FDA’s Office of Criminal Investigations (OCI) and the Virginia State Police investigated the case, with the assistance of the VDHP.
“The careless or uncontrolled distribution of prescription animal drugs poses a danger not only to the medicated animals but to the U.S. public health by increasing the risk that humans will become resistant to antibiotics that we unknowingly consume through our food supply,” said George A. Scavdis, special agent in charge of the FDA OCI’s Metro Washington Field Office, in a press release.
Sentencing is scheduled for May 8 at the United States Federal Courthouse in Abingdon, Virginia.
When asked for comment, Covetrus provided the following statement: “Covetrus North America resolved a criminal investigation that was conducted by the U.S. Attorney’s Office for the Western District of Virginia regarding the distribution of misbranded prescription veterinary medication.
“We fully cooperated with the U.S. Attorney’s office, and we are committed to complying with federal and state laws related to prescription veterinary medication. Covetrus’ mission is to help veterinarians drive better financial and clinical outcomes, and doing so in a way that is compliant with all federal and state laws.”
Covetrus was formerly known as Butler Animal Health Supply, a subsidiary of Henry Schein. In February 2019, Henry Schein spun off its animal health business, including Butler Animal Health Supply, which in turn merged with Vets First Choice to create a separate entity named Covetrus. As part of that spin-merger, Butler Animal Health Supply became a subsidiary of Covetrus and was renamed Covetrus North America.
In 2022, Covetrus was acquired for $4 billion by a pair of private equity firms, Clayton, Dubilier & Rice, headquartered in New York, and San Francisco-based TPG Capital.
Last June, Midwest Veterinary Supply pled guilty to similar charges brought by the U.S. Attorney’s Office of the Western District of Virginia. The company was sentenced to one year of probation for introducing misbranded drugs into interstate commerce and agreed to pay more than $11 million in criminal fines and forfeiture.
A version of this story appears in the May 2024 print issue of JAVMA