Rite Aid To Pay $4.75 Million to Resolve Allegations That It Violated Federal Law in the Sale of Pseudoephedrine Tablets, Which Can Be Used in the Manufacture of Methamphetamine

Retail drugstore chain Rite Aid, which operates more than 2,000 pharmacies in 18 states, will pay the United States a $4.75 million penalty to resolve allegations that its employees, in violation of the Controlled Substances Act, recorded false or incomplete information about customers who purchased tens of thousands of products containing pseudoephedrine.  Pseudoephedrine, an ingredient found in many cough and cold medicines, is used by some to illegally manufacture the drug methamphetamine.

Richard P. Donoghue, United States Attorney for the Eastern District of New York, Grant C. Jaquith, United States Attorney for the Northern District of New York, Ray Donovan, Special Agent-in-Charge, U.S. Drug Enforcement Administration, New York Division (DEA), and Todd Scott, Special Agent-in-Charge, DEA, Louisville Division, made the announcement.

In order to prevent the illicit use of pseudoephedrine, the Controlled Substances Act requires Rite Aid and other retail sellers to create and maintain a logbook that contains, among other things, the name and address of each the customer who makes a purchase of a pseudoephedrine product.  In the settlement agreement, Rite Aid admitted that, between August 2009 and January 2014, certain Rite Aid employees entered into Rite Aid’s logbook inaccurate or incomplete name and address information for customers.  The United States alleged that this misconduct occurred in connection with tens of thousands of sales during that time period.  Shortly after the United States brought these violations to Rite Aid’s attention, the company voluntarily devised and implemented a number of enhancements to its process for sales of pseudoephedrine products to better ensure Rite Aid’s compliance with federal law.

“Pseudoephedrine products are regulated under federal law because they have been used in the production of a highly addictive and highly dangerous drug, methamphetamine,” stated United States Attorney Donoghue.  “The settlement with Rite Aid sends a clear message to all those engaged in the manufacture, distribution and sale of those products: you must comply with federal laws enacted to prevent the illegal use of your products.”

“Rite Aid had a moral and a legal obligation to keep track of its pseudoephedrine sales to help ensure that the regulated drug was purchased for legitimate reasons, and not for the illegal manufacture of methamphetamine,” said United States Attorney Jaquith.  “We are committed to enforcing that obligation with aggressive action and appropriate penalties that also reflect acceptance of responsibility, implementation of compliance measures, and ability to pay.”

“Companies that do not comply with the Controlled Substances Act are violating the law,” stated DEA Special Agent-in-Charge Donovan.  “Regulatory laws are put in place for a reason – to ensure public health and safety.  Companies that turn a blind eye to regulations concerning the purchase of products containing pseudoephedrine enable illicit methamphetamine production.  Rite Aid’s disregard to compliance made it personal to us – whose job it is to save lives.”

“What Rite Aid learned today is that no one is above the law, not even large companies,” stated DEA Special Agent-in-Charge Scott.  “It is vitally important that pharmacies meet their record-keeping obligations to account for the safe flow of medications, to include pseudoephedrine, which carries the potential for methamphetamine abuse.”

The investigation and settlement were the result of a coordinated effort among the U.S. Attorney’s Office for the Eastern District of New York, the U.S. Attorney’s Office for the Northern District of New York, and DEA.  The United States was represented by Assistant U.S. Attorneys Elliot M. Schachner of the Eastern District of New York and Adam J. Katz of the Northern District of New York.