The U.S. Department of Justice announced today that e-commerce company eBay Inc. will pay $59 million and enhance its compliance program to settle charges it violated the Controlled Substances Act (CSA) in connection with the use of its platform to sell thousands of pill presses and encapsulating machines. The fourth largest CSA settlement in history, it reaffirms the continuing Justice Department war on fentanyl and other illegal opiate distribution.
Criminals can use pill presses and encapsulating machines to manufacture illegal drugs. When used with a mold, stamp, or die mimicking commonly prescribed controlled substances, pill presses are capable of producing counterfeit pills that appear indistinguishable from legitimate pharmaceutical drugs, including pills that are sometimes laced with fentanyl. The Justice Department says counterfeit pills laced with fentanyl are a significant contributor to the deadly overdose epidemic.
The CSA regulates certain pharmaceutical manufacturing equipment, including pill presses and encapsulating machines, by requiring identity verification of purchasers, record-keeping, and reporting to the Drug Enforcement Administration (DEA). These requirements seek to prevent individuals from obtaining these machines to use for illegal purposes and to allow the government to trace the machines to the end user. Associate Attorney General Vanita Gupta, Chair of the Justice Department’s Opioid Epidemic Civil Litigation Task Force says the Justice Department is committed to using all available enforcement measures to ensure that companies involved in selling the equipment that makes it possible to create these dangerous pills comply with the Controlled Substances Act.”
The Justice Department has successfully prosecuted many of eBay’s pill press buyers for trafficking illegal counterfeit pills. The Justice Department alleges eBay violations of the CSA requirements for thousands of pill presses and encapsulating machines sold through its website, including high-capacity pill presses capable of producing thousands of pills per hour. The Justice Department investigation further found that hundreds of eBay’s pill press buyers also purchased counterfeit molds, stamps, or dies, allowing them to produce pills that mimicked the products of legitimate pharmaceutical companies,
Justice Department officials say eBay made it easy for individuals across the country to use its website to obtain the type of dangerous machines that are often used to make counterfeit pills.and that some of these machines were even sold to individuals who were later convicted of drug related crimes.
U.S. Attorney Henry C. Leventis for the Middle District of Tennessee says today’s settlement holds eBay accountable for its compliance lapses and serves as a reminder to other e-commerce companies that the Justice Department will enforce these requirements, and will help keep these items out of the hands of criminals moving forward.
In addition to the large monetary settlement, eBay also has agreed to maintain and enhance its compliance program with respect to its prohibited and restricted items policy as it pertains to sales of pill presses, counterfeit molds, stamps, and dies, and encapsulating machines.
Coupled with other high profile prosecutions and settlements of nationwide pharmacies, physicians and others, the eBay settlement alerts all parties connected with the manufacture, prescription, distribution and sale of opiates and other controlled substances to use care to ensure the defensibility of their actions.
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About the Author
Recognized by her peers as a Martindale-Hubble “AV-Preeminent” (Top 1%) and “Top Rated Lawyer” with special recognition LexisNexis® Martindale-Hubbell® as “LEGAL LEADER™ Texas Top Rated Lawyer” in Health Care Law and Labor and Employment Law; as among the “Best Lawyers In Dallas” for her work in the fields of “Labor & Employment,” “Tax: ERISA & Employee Benefits,” “Health Care” and “Business and Commercial Law” by D Magazine, Cynthia Marcotte Stamer is a practicing attorney board certified in labor and employment law by the Texas Board of Legal Specialization and management consultant, author, public policy advocate and lecturer widely known for 35 plus years of health industry and other management work, public policy leadership and advocacy, coaching, teachings, and publications.
A Fellow in the American College of Employee Benefit Counsel, Co-Chair of the American Bar Association (“ABA”) International Section Life Sciences and Health Committee and Vice-Chair Elect of its International Employment Law Committee, Chair-Elect of the ABA TIPS Section Medicine & Law Committee, Past Chair of the ABA Managed Care & Insurance Interest Group, Scribe for the ABA JCEB Annual Agency Meeting with HHS-OCR, past chair of the ABA RPTE Employee Benefits & Other Compensation Group and current co-Chair of its Welfare Benefit Committee, and Chair of the ABA Intellectual Property Section Law Practice Management Committee, Ms. Stamer is most widely recognized for her decades of pragmatic, leading-edge work, scholarship and thought leadership on heath benefit and other healthcare and life science, managed care and insurance and other workforce and staffing, employee benefits, safety, contracting, quality assurance, compliance and risk management, and other legal, public policy and operational concerns in the healthcare and life sciences, employee benefits, managed care and insurance, technology and other related industries. She speaks and publishes extensively on these and other related compliance issues.
Ms. Stamer’s work throughout her career has focused heavily on working with health care and managed care, life sciences, health and other employee benefit plan, insurance and financial services and other public and private organizations and their technology, data, and other service providers and advisors domestically and internationally with legal and operational compliance and risk management, performance and workforce management, regulatory and public policy and other legal and operational concerns. Author of a multitude of highly regarded publications on HIPAA and other medical record and data privacy and scribe for the ABA JCEB Annual Meeting with the HHS Office of Civil Rights, her experience includes extensive involvement throughout her career in advising health care and life sciences and other clients about preventing, investigating and defending EEOC, DOJ, OFCCP and other Civil Rights Act, Section 1557 and other HHS, HUD, banking, and other federal and state discrimination investigations, audits, lawsuits and other enforcement actions as well as advocacy before Congress and regulators regarding federal and state equal opportunity, equity and other laws.
For more information about Ms. Stamer or her health industry and other experience and involvements, see www.cynthiastamer.com or contact Ms. Stamer via telephone at (214) 452-8297 or via e-mail here.
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