Kinray Hit with $10M Penalty for Opioid Red Flags

WHITESTONE, QUEENS – Kinray, LLC, a New York-based pharmaceutical distributor and subsidiary of Cardinal Health, Inc., is shelling out $10 million to the United States government after admitting it failed to flag suspiciously large opioid orders to the Drug Enforcement Administration (DEA). The settlement, announced yesterday, closes a civil lawsuit filed back in December 2016 by Preet Bharara, then the United States Attorney for the Southern District of New York, and James Hunt, Special Agent in Charge for the DEA.

The feds allege that between January 1, 2011, and May 14, 2012, Kinray ignored glaring red flags – unusually large and frequent orders for Schedule II narcotics like oxycodone – and didn’t bother to notify the DEA. This isn’t about a few extra pills; it’s about a distributor turning a blind eye while potentially fueling the black market for highly addictive opioids at a time when the nation is drowning in the crisis. Kinray’s failure to report these orders directly undermines the DEA’s ability to track and intercept illicit drug distribution networks.

“With the opioid crisis reaching epidemic proportions, pharmaceutical companies must be part of the solution, not part of the problem,” Bharara stated bluntly. “When distributors like Kinray fail to alert the DEA to suspicious order activity, they end up facilitating the illegal sale and distribution of highly addictive opioids.” The settlement is just one piece of a larger federal effort to hold pharmaceutical companies accountable for their role in the opioid epidemic, a crisis that claimed over 33,000 lives last year alone.

DEA Acting Special Agent in Charge James Hunt underscored the importance of distributor vigilance. “DEA Diversion Investigators conduct regulatory visits… to deter prescription medication from being illegally distributed,” Hunt said. “This settlement is a clear message that law enforcement is looking at pharmaceutical suppliers responsible for safeguarding and distributing prescription medication as well as targeting those responsible for its diversion.” It’s a pointed reminder that simply *being* a legal distributor doesn’t absolve a company of its responsibility to monitor and report suspicious activity.

According to court documents, Kinray, located in Whitestone, Queens, distributes controlled substances to pharmacies, doctors, and medical facilities. The DEA investigation focused on orders from New York City and elsewhere, revealing patterns of unusual size and frequency. The DEA specifically investigated pharmacies placing these orders, but the responsibility to report these patterns fell squarely on Kinray. The Consent Decree approved by U.S. District Judge Ronnie Abrams forces Kinray to pay the $10 million penalty and formally admit responsibility for the oversight.

This case isn’t about proving Kinray directly supplied illegal opioid rings, but about demonstrating a failure to uphold its regulatory duty. The DEA relies on these reports from distributors as a crucial first line of defense. By failing to report, Kinray effectively removed a key barrier to the flow of dangerous narcotics into communities already ravaged by addiction. While $10 million is a significant penalty, it remains to be seen if it will be enough to deter other distributors from prioritizing profits over public safety.