Animal Health International Sentenced on Federal Misbranding Charge

ABINGDON, Va. – Animal Health International Inc. (AHI), a Colorado corporation that obtains prescription drugs for animals from manufacturers for further distribution to veterinarians, farms, feedlots, and other facilities, was sentenced today, through its corporate counsel, in U.S. District Court after previously pleading guilty in February 2020 to introducing misbranded drugs into interstate commerce.

At the time of the guilty plea, Patterson Companies, Inc. (Patterson), AHI’s corporate parent, entered into a non-prosecution agreement in which it committed to enhance its compliance program and fully comply with the law.

AHI admitted to introducing and causing the introduction and delivery into interstate commerce of veterinary prescription drugs that were misbranded. Today, pursuant to the agreements entered into by AHI and Patterson, AHI were ordered to pay a forfeiture money judgment of over $46 million, $1 million to the Virginia Department of Health Professionals, and a $5 million fine. All of those amounts have been paid in full pursuant to the plea agreement, which required AHI to make full payment prior to pleading guilty. In addition, AHI was placed on probation for a period of one year. In the past 18 months, Patterson has fully cooperated in the investigation and implemented changes to AHI’s and its compliance programs to prevent further violations of federal and state law.

United States Attorney Thomas T. Cullen and Special Agent in Charge Mark S. McCormack of the FDA’s Office of Criminal Investigation’s Metro Washington Field Office made the announcement.

“Manufacturers and distributors of veterinary prescription drugs must ensure that these medications are dispensed in accordance with their labels and federal law,” U.S. Attorney Cullen said today.  “Unauthorized distribution and off-label use of prescription medications not only endanger animals and livestock, but also the general public.  The Department of Justice will continue to work closely with the FDA to investigate and prosecute entities and individuals who engage in these types of unlawful business practices.”

“The FDA recognizes the importance of controlling the prescription drug supply for animals. The careless or uncontrolled distribution of prescription animal drugs poses a danger not only to the medicated animals but to the U.S. public health by increasing the risk that humans will become resistant to antibiotics that we unknowingly consume through our food supply.” said Special Agent in Charge Mark S. McCormack, FDA Office of Criminal Investigations Metro Washington Field Office.  “We will continue to pursue and bring to justice those who distribute prescription animal drugs unlawfully.”

The Food and Drug Administration’s restrictions on veterinary prescription drugs are not just to protect animals from the potential harms of prescription drugs, but are also to protect the human food supply from unsafe drug residues in the edible tissues of animals sold for slaughter. Common causes of illegal residues include: (1) exceeding the drug’s approved dose; (2) using a shorter withdrawal period than what is stated on the drug’s label (if a higher than approved dose is given, the labeled withdrawal period may not be enough to allow the drug in the edible tissues to deplete to levels that are at or below the tolerance); (3) using a drug in an extra-label manner (for indications and dosages outside the approved labeling) without a veterinarian’s involvement; (4) giving a drug not approved for that species; and (5) using an unapproved route of administration. Drug residues in the nation's drug supply are concerning because: (1) they may contribute to antibiotic resistance in the human population, rendering human drugs less effective to treat human disease and contributing to the mutations of “superbugs”; and (2) they may cause allergic reactions in individuals with certain drug allergies.

According to previously filed court documents, from 2012 through 2018, AHI caused misbranded veterinary prescription drug shipments to be made throughout the United States by distributing veterinary drugs from its wholesale locations directly to end users, by distributing veterinary drugs to unlicensed individuals, by distributing veterinary drugs pursuant to prescriptions issued by a veterinarian who was not licensed in the state to which veterinary drugs were being shipped, and  by distributing veterinary drugs pursuant to prescriptions issued by a veterinarian who did not have a valid veterinarian-patient relationship with the animals in question.

Two such unlicensed individuals, Marlin Webb and Billy K. Groce, were not properly licensed to receive, transport, store, distribute, or dispense veterinary prescription drugs. Webb was the store manager of a cooperative in Hillsville, Virginia. The cooperative was not a licensed wholesaler, pharmacy, or veterinary clinic. Groce operated an unlicensed veterinary prescription distribution business.  Webb and Groce each obtained veterinary prescription drugs from AHI in interstate commerce without valid prescriptions, and on many occasions, with no prescriptions at all. Webb and Groce previously pled guilty to criminal charges for their conduct in United States District Court in Abingdon.

While AHI obtained not less than $46,802,203 from its illegal shipments, its profits from such shipments were a small percentage of the amount received.

The investigation of the case was conducted by the Food and Drug Administration-Office of Criminal Investigations with the assistance of the Virginia Department of Health Professions. Assistant United States Attorney Randy Ramseyer prosecuted the case for the United States.