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March 11, 2008

Diversion Risk for AmerisourceBergen?

Analysis of: Feds Raid Drugstores, Mission Hills Home | www.msnbc.msn.com
This analysis is solely the work of the author. It has not been edited or endorsed by GLG.
Analysis By:
Adam Fein, PhD, Founder & PresidentAdam Fein, PhD
Founder & President, Pembroke Consulting Inc
Implications: The DEA’s aggressive enforcement efforts for the diversion of controlled substances and other prescription drugs may mean business disruptions for wholesalers besides Cardinal Health (CAH), including AmerisourceBergen (ABC).  For better (or perhaps worse), the DEA now considers distributors and wholesalers to be responsible for ensuring that a pharmacy is only dispensing prescriptions issued for a legitimate medical purpose by an individual practitioner acting in the usual course of professional practice. What impact will these new responsibilities have on wholesalers' revenues and customer relationships?

Analysis: Last week, the DEA and FBI raided drug stores and placed two San Diego pharmacies under immediate suspension.

Unfortunately, it looks like this pharmacy was being supplied by AmerisourceBergen (ABC). Why do I say this?

1) According to the Statement of Facts filed with the Court, the defendant allegedly delivered the diverted drugs in “Good Neighbor Pharmacy” bags.

2) Slide 5 of MSNBC’s slideshow from the raids shows a “Good Neighbor Pharmacy” sign on the pharmacy.

3) Good Neighbor Pharmacy is the national cooperative for independent pharmacies that is owned by AmerisourceBergen (ABC).

Of course, thousands of pharmacies participate in ABC’s Good Neighbor program, so finding one bad apple in the bushel is no cause for panic.

However, I wonder if the DEA will use a similar approach with ABC as the Agency is using with Cardinal Health (CAH). If so, then perhaps ABC may be facing the suspension of its license to distribute controlled substances at one of its facilities. Alternatively, ABC may have to limit shipments to independent pharmacists as Cardinal has done in Stafford, TX. (See Cardinal Health's Customer Problems Deepen – Council Site.)    


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