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Animal Health International Will Pay More Than $52 Million in Forfeitures, Fines, and Penalties

Abingdon, VIRGINIA – Animal Health International Inc. (AHI), a Colorado corporation that obtains prescription drugs for animals from manufacturers for further distribution to veterinarians, farms, feedlots, and other facilities, pleaded guilty today, through its corporate counsel, in U.S. District Court to introducing a misbranded drug into interstate commerce. Also, Patterson Companies, Inc. (Patterson) AHI’s corporate parent, entered into a non-prosecution agreement in which it committed to enhance its compliance program and fully comply with the law. United States Attorney Thomas T. Cullen and Special Agent in Charge Mark S. McCormack of the FDA’s Office of Criminal Investigations Metro Washington Field Office, made the announcement today.

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 judgement of $46,802,203. In past 18 months, Patterson has fully cooperated in the investigation and implemented changes to AHI’s and its compliance programs to prevent further violations of federal and state law.

“Today’s conviction demonstrates that our office will not tolerate when entities or individuals illegally bypass the important safeguards that exist to protect our nation’s food sources,” First Assistant United States Attorney Daniel P. Bubar said today. “We will continue to work closely with our partner agencies to make sure that veterinary drug distributors uphold their important obligations.”

“The FDA recognizes the importance of controlling the prescription drug supply for animals. The careless or uncontrolled distribution of prescription animal drugs poses a danger not only to the medicated animals but to the U.S. public health by increasing the risk that humans will become resistant to antibiotics that we unknowingly consume through our food supply.,” said Special Agent in Charge Mark S. McCormack, FDA Office of Criminal Investigations Metro Washington Field Office.  “We will continue to pursue and bring to justice those who distribute prescription animal drugs unlawfully.”

The Food and Drug Administration’s restrictions on veterinary prescription drugs are not primarily to protect animals from the potential harms of prescription drugs, but are to protect the human food supply from unsafe drug residues in the edible tissues of animals sold for slaughter. Common causes of illegal residues include: (1) exceeding the drug’s approved dose; (2) using a shorter withdrawal period than what is stated on the drug’s label (if a higher than approved dose is given, the labeled withdrawal period may not be enough to allow the drug in the edible tissues to deplete to levels that are at or below the tolerance); (3) using a drug in an extra-label manner (for indications and dosages outside the approved labeling) without a veterinarian’s involvement; (4) giving a drug not approved for that species; and (5) using an unapproved route of administration. Drug residues in the nation’s drug supply are concerning because: (1) they may contribute to antibiotic resistance in the human population, rendering human drugs less effective to treat human disease and contributing to the mutations of “superbugs”; and (2) they may cause allergic reactions in individuals with certain drug allergies.

According to court documents, from 2012 through 2018, AHI caused misbranded veterinary prescription drug shipments to be made throughout the United States 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, Virginia. 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 pled guilty to criminal charges for their conduct in United States District Court in Abingdon.

While, as stated in the charge to which AHI pled guilty, AHI obtained not less than $46,802,203 from its illegal shipments, its profits from such shipments were a small percentage of the amount received.

United States District Judge James P. Jones scheduled sentencing for April 28, 2020 at 2:30 p.m.

The investigation of the case was conducted by the Food and Drug Administration – Office of Criminal Investigations with the assistance of the Virginia Department of Health Professions.  Assistant United States Attorney Randy Ramseyer is prosecuting the case for the United States.

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