News Release
FOR IMMEDIATE RELEASE
January 13, 2004

Neighborcare Pharmacy Settles
Controlled Substance Act Violation Allegations

DENVER - Jeffrey D. Sweetin, Special Agent in Charge of the Rocky Mountain Division of the Drug Enforcement Administration, John W. Suthers, United States Attorney for the District of Colorado, announced today that the United States has entered an agreement with NeighborCare Pharmacy, located in Golden, Colorado, to settle allegations that the company violated provisions of the Controlled Substances Act. NeighborCare has agreed to pay $625,000 in civil penalties to settle the claims. The company made substantial expenditures to ensure future compliance with the Controlled Substances Act.

"The DEA is responsible for oversight of pharmaceutically controlled substances through our Diversion Investigations," said Special Agent Charge Jeffrey D. Sweetin. "This case underscores our commitment to preventing the diversion of legal drugs into illicit markets. We do that by making sure appropriate records are maintained and resolving to take action when audits reveal discrepancies or security problems."

NeighborCare had previously disclosed that it was missing over 120,000 units of 15 different controlled drugs with an estimated street value of over $600,000. The Drug Enforcement Administration (DEA) then conducted an audit and investigation into the pharmacy's actions from June 1, 2000 to April 30, 2002. The audit revealed serious record-keeping and security problems in tracking and protecting the controlled drugs that it was licensed to handle. The audit determined that it was not possible to definitively determine the quantity of drugs ultimately diverted from the pharmacy or who was directly responsible for the known diversions.

During the settlement negotiations NeighborCare voluntarily took action to completely revise its system for protecting and accounting for all controlled drugs that it receives and distributes. The DEA has reinspected NeighborCare and has confirmed that the problems identified during the audit and investigation have been addressed and that NeighborCare is now in compliance with the Controlled Substances Act. NeighborCare will be the subject of future administrative inspections by the DEA as provided by law to ensure continued compliance.

In light of the substantial compliance effort by NeighborCare, the United States agreed to settle this matter by requiring the company to pay $625,000 in penalties for the diverted drugs and past record-keeping violations. The $625,000 was paid in full via wire today.

Mr. Suthers stated: "Pharmacies are required to exercise due diligence in ensuring that they can account for all the controlled drugs entrusted to them and that the drugs are only distributed to people with a valid prescription issued by a licensed healthcare professional. Holding pharmacies accountable is critical because the drugs they control are highly sought after by drug abusers and can cause the same sort of problems that we see with illicit drugs. I want to compliment the DEA on their excellent work investigating this case."