Pharma Giant Settles for $2.25 Million Over Controlled Substance Act Violations

In a landmark agreement, Novel Laboratories commits to hefty settlement and operational improvements in response to alleged handling missteps of controlled substances.

In a significant development that underscores the rigorous enforcement of regulations governing the pharmaceutical industry, Novel Laboratories Inc., a subsidiary of Lupin Inc., has agreed to pay $2.25 million to settle allegations of violating the Controlled Substances Act (CSA). 

The announcement was made by U.S. Attorney Philip Sellinger, marking a pivotal moment in the ongoing efforts to ensure the responsible management of controlled substances, particularly opioids.

The settlement follows a detailed examination by the Drug Enforcement Administration (DEA), which revealed inconsistencies in Novel's accounting for substantial quantities of controlled substances, including oxycodone, hydrocodone, and Temazepam, over a period extending from January 1, 2019, to August 31, 2021. The findings pointed to a failure to adequately safeguard these drugs, raising concerns over potential misuse and diversion.

In addition to the financial settlement, Novel has entered into a memorandum of agreement (MOA) with the DEA, committing to significant operational improvements aimed at bolstering compliance with the CSA. This MOA, set to last for three years, represents a forward step in ensuring that Novel adheres to stringent regulatory standards in its handling of dangerous and addictive opioids.

U.S. Attorney Philip R. Sellinger emphasized the critical responsibility of pharmaceutical manufacturers in safeguarding controlled substances, highlighting the importance of stringent compliance to prevent misuse. 

Similarly, Special Agent in Charge Cheryl Ortiz of the DEA’s New Jersey Field Division pointed out the non-exemption of pharmaceutical companies from regulatory responsibilities, especially given the hazardous implications of controlled substances when improperly managed.

The investigation leading to this settlement was spearheaded by diversion investigators of the DEA, under the guidance of Special Agent in Charge Cheryl Ortiz, showcasing the collaborative effort to uphold public safety and regulatory compliance within the pharmaceutical sector.

Assistant U.S. Attorney Jordann R. Conaboy of the U.S. Attorney’s Opioid Abuse Prevention and Enforcement Unit in Newark represented the government in this case, which culminates in allegations only, without any determination of liability. 

This agreement highlights the ongoing commitment of federal and regulatory bodies to combat the opioid crisis and ensure that pharmaceutical entities play their part in preventing drug misuse and diversion.