UPS pays $40M to end online pharmacies probe
United Parcel Service cargo planes.(Photo: Roberto Schmidt. AFP/Getty Images)
UPS will halt deliveries for illegal online pharmacies and pay $40 million to end a federal criminal probe into its shipping practices, the Justice Department said Friday.
Atlanta-based UPS agreed to create a compliance program to identify the rogue pharmacies and close their shipping accounts, cutting off at least one route for the pharmacies to get their products to consumers, FDA Criminal Investigations Director John Roth said.
"The FDA is hopeful that the positive actions taken by UPS in this case will send a message to other shipping firms to put public health and safety above profits," Roth said in a statement
Stock markets in the U.S. and Europe are closed today. UPS stock is listed at $85.90 a share.
The $40 million fine is the money UPS received in fees from the online drug dealers, the Justice Department said.
UPS has cooperated with federal officials in the investigation since 2007 and accepts its "obligation and responsibility to curb the sale of drugs sold through illegal pharmacies," UPS spokeswoman Susan Rosenberg said. A strengthened compliance program and additional training outlined in the agreement will "ensure that a similar situation doesn't happen in the future."
Rosenberg says the company currently works with Internet pharmacies that meet federal, state and local laws.
Internet pharmacies selling controlled substances, including powerful narcotic pain killers such as oxycodone and hydrocodone, without valid prescriptions used UPS services to ship the illegal drugs, the Justice Department said in a press release. Some pharmacies shipped the prescription drugs to customers who had simply filled out a questionnaire with their medical complaint for an online "evaluation," the Justice Department said.
Drug Enforcement Administration agents and compliance officials met five times with UPS executives between 2004 and 2006 to discuss the shipper's responsibility to avoid business with the illegal drug dealers, the agreement signed by UPS said. UPS employees also repeatedly advised corporate executives that the company should discontinue pursuing online pharmacy business, the agreement said.
Despite the warnings and pleas from drug task forces in Virginia, Kentucky and elsewhere, UPS continued to ship packages from the illegal pharmacies, including some that generated as much as $5,000 a day in shipping fees, the agreement said.
In 2005, the Kentucky Bureau of Investigations sent UPS a list of illegal pharmacies shipping to Kentucky, but UPS continued shipping for those pharmacies, the agreement said. In another instance, UPS shipped packages from the offshore accounts of an Internet pharmacy even after Florida police closed the U.S. business, the agreement said. UPS closed the account only after policy arrested the pharmacy's owner in 2007.