U.S. Attorney's Office enters settlement with Rite Aid based on improper sales of meth precursor pseudoephedrine

CHARLESTON, W.Va. – United States Attorney Mike Stuart announced a deal today between the United States Attorney’s Office and Rite Aid Corporation to resolve a criminal investigation in the Southern District of West Virginia regarding Rite Aid’s improper sale of the methamphetamine precursor pseudoephedrine (PSE) between January 2009 and October 2012. Signed by U.S. Attorney Stuart today, the settlement includes Rite Aid’s full acceptance of responsibility for its improper sale of the methamphetamine precursor PSE, it acknowledges Rite Aid’s remedial efforts and ensures future steps to help prevent abuse of pseudoephedrine, and it mandates that Rite Aid pay $4 million dollars, which is approximately 80% of its gross sales of pseudoephedrine in West Virginia during the relevant time period, to provide resources for crime victim compensation and treatment of drug addiction.

“This settlement sends a strong message to businesses that we will not tolerate putting sales over safety. Most significantly, every dollar paid out by Rite Aid is going to stay right here in West Virginia, and not go into the black hole of Washington,” stated U.S. Attorney Stuart. “This funding will provide increased resources for two critical areas – compensating crime victims and drug treatment. Rest assured that my office will keep fighting to ensure that anyone responsible for the drug scourge in our state is held responsible, from the suppliers to the pharmacies to the street dealers poisoning our communities.”

“Regulation of drugs such as pseudoephedrine is critical to improving West Virginia’s substance abuse epidemic,” said Bill J. Crouch, Cabinet Secretary of the West Virginia Department of Health and Human Resources. “This funding will support DHHR’s ongoing efforts to strengthen substance abuse treatment programs and ultimately improve the health and well-being of impacted residents across the state.”

DEA’s Assistant Special Agent in Charge David W. Gourley stated, “Even though the opioid crisis has been in the forefront, we will not neglect any investigations of other dangerous drugs which are readily available in the state of West Virginia. Methamphetamine use is on the rise. This is a reminder to pharmacies out there not to turn a blind eye to their responsibilities under the Controlled Substances Act.”

“We are grateful to the U.S. Attorney’s Office for including the West Virginia Crime Victims Compensation Fund as a recipient of this settlement,” stated Aaron Allred, Legislative Manager, West Virginia Legislature. “These funds will allow us to assist even more West Virginians as they try to rebuild their lives after being innocent victims of crime. These funds will be used to pay medical bills, provide medical devices, pay for burial and funeral services, lost wages, counseling and other economic losses sustained by victims of crime in our state.”

The $4 million dollar payment will stay entirely in West Virginia. Per the settlement, Rite Aid must pay $2.6 million to the West Virginia Crime Victims Compensation Fund. That figure is more than double the total federal grants the Fund receives in an entire year, and is just shy of the total amount of money the Fund paid to crime victims in all of 2016 and 2017 combined. The settlement further requires Rite Aid to pay $1.4 million to the West Virginia Department of Health and Human Resources. As a condition of his agreement to this settlement, U.S. Attorney Stuart required the agreement of DHHR to use this funding for substance abuse treatment to help fight addiction.

U.S. Attorney Stuart praised the investigative efforts that led to this settlement:  “I want to strongly commend the DEA, assisted by the FBI, and the tremendous work of our team and the leadership of AUSAs Steve Loew and Greg McVey, who handled this complex case for the U.S. Attorney’s Office. Job well done.”

During the investigation, Rite Aid has taken remedial actions to comply with federal law and to help ensure that PSE is sold only to people who have a legitimate need for it. The agreement requires Rite Aid to continue those remedial steps and to take additional action. For example, in November 2013, Rite Aid removed single ingredient PSE products (the PSE product preferred by manufacturers of methamphetamine) from its stores, and now only sells tamper-resistant, single-ingredient PSE products in West Virginia. Importantly, Rite Aid will now train its employees on how to identify people who may be purchasing PSE to manufacture methamphetamine, and it will further train and instruct its employees to deny such sales. Furthermore, Rite Aid will continue requiring stores in West Virginia to store PSE products out of the view of customers to make it easier and safer for store employees to deny suspicious sales, and Rite Aid will require pharmacists to counsel all customers seeking to purchase PSE.

A fact sheet highlighting the terms of the settlement is attached to this press release.

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