News Release
October 26, 2007
Contact: Casey McEnry
Number: 415-436-7994

North Highlands Pharmacy Ordered to Pay $150,000
Failure to Report Suspicious Transactions and Maintain Proper Records of Product Containing Methamphetamine Precursor Chemical

OCT 26 -- (SACRAMENTO, CA) - Drug Enforcement Administration (DEA) Assistant Special Agent in Charge Gordon Taylor and United States Attorney McGregor W. Scott announce that North Highlands Pharmacy has agreed to pay $150,000 in a civil settlement. The agreement was reached by all parties on October 12, 2007. According to the settlement agreement, North Highlands Pharmacy purchased 1,982,156 tablets of Aprodine, a List I Chemical. North Highlands Pharmacy violated the Controlled Substances Act by failing to maintain proper records and report suspicious transactions concerning the sales of the chemical. Aprodine is commonly used to treat nasal congestion and sinusitis associated with allergies, hay fever and the common cold. The active ingredient in Aprodine is pseudoephedrine, a vital precursor chemical used in the illegal production of methamphetamine.

The investigation began in August 2005 when DEA Sacramento Diversion Investigators received a suspicious and/or excessive purchase report about North Highlands Pharmacy, located at 5600 Watt Avenue, North Highlands. After conducting an audit of the business, investigators learned that North Highlands Pharmacy purchased 1,982,156 tablets of Aprodine between September 2002 and July 2005.

The investigation culminated on Friday, October 12, 2007, when all parties reached a settlement agreement. Some of the terms and conditions detailed in the agreement are as follows: North Highlands Pharmacy shall pay the United States $150,000 within ten days. For a three year time period and upon 24 hours notice, federal law enforcement personnel can enter North Highlands’ facility at anytime, during regular business hours, without judicial or administrative warrants or notices of inspection, in order to verify the compliance by North Highlands with the terms of the agreement. Every six months, for the duration of the next three years, North Highlands Pharmacy will submit copies of all List I Chemical supplier receipts, List I Chemical purchase logs (which is required pursuant to the Comprehensive Methamphetamine Epidemic Act of 2005), and a physical inventory of all List I Chemicals products to the DEA Sacramento Office. Finally, North Highlands Pharmacy will contact the DEA Sacramento Office within thirty days in the event they learn that any individual has contacted a North Highlands employee in an effort to have the employee sell a List I Chemical product in violation of any federal or state law.

DEA Assistant Special Agent in Charge Gordon Taylor said, “There is a heavy price to be paid when businesses fail to maintain proper records of pseudoephedrine products and other regulated chemicals. Stringent precursor reporting laws and vigorous enforcement have led to a significant reduction in methamphetamine labs and caused the price of methamphetamine to skyrocket not only in California, but in other areas of the U.S.” Taylor added, “We are dedicated to holding pharmacies, and the individuals who operate them, accountable for the regulated products they dispense.”

“A key strategy in targeting methamphetamine is to strictly control the chemicals used in its manufacture. It is critical for distributors of controlled substances, such as pharmacies, to comply with all applicable regulations and laws,” said United States Attorney Scott.

Full payment was received from North Highlands Pharmacy on October 25, 2007. This settlement agreement was reached through the United States Attorney's Office in the Eastern District of California on behalf of the Drug Enforcement Administration and North Highlands Pharmacy, Incorporated.