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AHI fined for introducing misbranded drugs into interstate commerce

Company will pay more than $52 million in forfeitures, fines and penalties.

Animal Health International Inc. (AHI), a Colorado corporation that obtains drugs for animals from manufacturers, has pleaded guilty, through its corporate counsel, in U.S. district court to introducing a misbranded drug into interstate commerce. Also, Patterson Companies Inc., AHI’s corporate parent, has entered into a non-prosecution agreement in which it committed to enhance its compliance program and fully comply with the law.

The announcement was made by U.S. Attorney Thomas T. Cullen and Special Agent in Charge Mark S. McCormack of the Food & Drug Administration’s Office of Criminal Investigations Metro Washington Field Office.

Pursuant to the agreements entered into by AHI and Patterson, AHI admitted to introducing and causing the introduction and delivery into interstate commerce of veterinary prescription drugs that were misbranded and agreed to pay $1 million to the Virginia Department of Health Professionals, a $5 million fine and a forfeiture money judgment of $46.802 million. In the past 18 months, Patterson has fully cooperated in the investigation and implemented changes to its and AHI’s compliance programs to prevent further violations of federal and state law, FDA said in its announcement.

According to court documents, from 2012 through 2018, AHI caused misbranded veterinary prescription drug shipments to be made throughout the U.S. by distributing veterinary drugs from its wholesale locations directly to end users and by distributing veterinary drugs to unlicensed individuals.

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, Va. 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 pleaded guilty to criminal charges for their conduct in U.S. District Court in Abingdon, Va.

While, as stated in the charge to which AHI pleaded guilty, AHI obtained no less than $46.802 million from its illegal shipments, its profits from such shipments were a small percentage of the amount received, FDA said.

U.S. district Judge James P. Jones scheduled sentencing for April 28, 2020.

The investigation of the case was conducted by FDA's Office of Criminal Investigations with the assistance of the Virginia Department of Health Professions.

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