Pharmacies and Pharmacists in the Crosshairs: DOJ’s $408 Million Settlement with Rite Aid

Last week, the Department of Justice (DOJ) announced that Rite Aid, ten subsidiaries, and affiliate pharmacies agreed to settle allegations that Rite Aid violated the Controlled Substances Act (CSA) and the False Claims Act (FCA) by filling “unnecessary prescriptions for powerful and addictive opioids.”

The Rite Aid Settlement

Rite Aid agreed to pay $7.5 million in civil fines and allowed an unsubordinated, general unsecured claim of $401.8 million in Rite Aid’s Chapter 11 bankruptcy case currently pending in the District of New Jersey.

The Rite Aid settlement comes on the heels of OptumRX’s agreement to pay $20 million to resolve allegations that it improperly filled opioid prescriptions in conjunction with benzodiazepines and stimulants (commonly called the “trinity” or “holy trinity” of prescription drug cocktails) from 2013 through 2015.

DOJ’s CSA and FCA action against Rite Aid (and Optum Rx) reinforces the government’s clear commitment to holding pharmacies and pharmacists to their mandatory corresponding responsibilities under the CSA to ensure “[a] prescription for a controlled substance … be issued for a legitimate medical purpose by an individual practitioner acting in the usual course of his professional practice.”

Increased Enforcement Actions

The DOJ has been prolific in pursuing physicians (despite the Supreme Court’s ruling in Ruan v. United States in 2022) and big pharma companies that manufacture, market, and sell opioids and opioid use disorder (OUD) drugs. With the DEA, the DOJ has ramped up enforcement actions targeted at pharmacists and pharmacies in recent years using predictive data analytics and information from state prescription drug monitoring programs.

In Virginia alone, DOJ has announced the following CSA cases in recent years:

• In 2024, Kroger and Harris Teeter pharmacies paid $1.3 million in CSA penalties for filling 160 suspect opioid and benzodiazepine prescriptions.
• In 2023, Children’s Hospital of the King’s Daughters in Norfolk paid $68,400 in CSA penalties for violation of recordkeeping obligations.
• In 2023, Midwest Veterinary Supply pleaded guilty to introducing misbranded drugs in to interstate commerce and was fined over $11 million.
• In 2022, Sovah Health settled CSA claims for $4.36m, the largest civil penalty ever obtained from a hospital system under the CSA in the Fourth Circuit, and the third largest in the nation.
• In 2022, Hidenwood Pharmacy in Newport News agreed to pay $125,000 in CSA penalties for various recordkeeping and dispensing violation alleged.
• In 2021, a Virginia Beach pharmacy tech pleaded guilty to acquiring over 50,000 dosage units of prospection medication while working at Sentara Norfolk General Hospital.
• In 2020, a pharmacist and owner of CARE4U Pharmacy in Manassas received a two-year prison sentence and forfeited $53,100 for illegally distributing over 9,000 oxycodone, Adderall, and Xanax pills.
• In 2020, a Rite Aid pharmacist pleaded guilty to CSA violations for filling fraudulent prescriptions.
• In 2020, a now-closed pharmacy and its pharmacist-owner paid $330,000 to the settle CSA allegations for allegedly dispensing controlled substances on at least 33 occasions unlawfully.
• In 2020, Partners Pharmacy of Virginia agreed to pay $100,000 to settle allegations that it violated the CSA for recordkeeping violations.
• In 2019, Kroger paid a civil penalty of $225,000 to settle allegations that its pharmacy in Charlottesville, Virginia violated the CSA on at least 16 occasions by distributing opioids improperly.
• In 2019, FF Acquisitions, Inc. in Virginia Beach paid $1million to settle claims that its pharmacies violated the CSA.

DOJ and its 93 U.S. Attorney’s Offices across the country have made it clear that pharmacists and pharmacies are squarely in the crosshairs of government enforcement action. DEA offices across the country also are working closely with their criminal and civil prosecutors to aggressively investigate possible CSA violations and seek civil penalties.

What This Means for Pharmacies

Pharmacies and pharmacists are increasingly and consistently being held accountable for their corresponding duties to ensure every prescription filled is valid and issued for a legitimate medical purpose. The DEA, as the sole agency responsible for registering pharmacies and pharmacists to dispense controlled substances, holds virtually all the cards in the high stakes game of CSA enforcement.

Our Government & Special Investigations team have deep knowledge and experience advising clients on the Controlled Substances Act and understand how the government approaches CSA investigations. Please contact a member of the team if you have any questions.