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Sovah Health to Pay United States $4.36 Million

ABINGDON, Va. – Sovah Health has agreed to pay the United States $4.36 million to settle claims that the hospital system violated the Controlled Substances Act (CSA) on numerous occasions between 2017 and 2020. As part of the resolution, Sovah Health further agreed to be subject to a period of four years of increased compliance and oversight during which any failure to comply with its obligations may result in contempt of court findings that could result in additional monetary sanctions and injunctive relief. The settlement is the third-largest civil penalty ever obtained from a hospital system under the Controlled Substances Act and the largest ever in the Fourth Circuit.

The claims center around Sovah Health’s failure to have effective controls in place to prevent the diversion of powerful painkilling prescription opioids. Sovah Health is a regional health care delivery system comprised of a hospital with two campuses – Danville and Martinsville. In 2017, Danville (formerly Danville Regional Medical Center) and Martinsville (formerly Memorial Hospital of Martinsville & Henry County) united to form Sovah Health.

From 2017 to 2019, a Sovah Health employee diverted more than 11,000 Schedule II controlled substances from Sovah Health. From January to May 2020 a second Sovah Health employee tampered with Fentanyl vials and hydromorphone injectables by replacing the controlled substance with saline and diverting the controlled substance. The United States alleged Sovah Health failed to provide effective controls and procedures to guard against the diversion of controlled substances, filled orders for controlled substances without a system in place to disclose suspicious orders of controlled substances, and failed to maintain readily retrievable records of controlled substances.

“As opioid overdose deaths skyrocket, it is critical that health care companies are held accountable when they fail to effectively safeguard these powerful prescriptions within their facilities,” said U.S. Attorney Christopher R. Kavanaugh for the Western District of Virginia. “The oversight provided by this resolution will ensure future compliance involving these important but potentially deadly substances, and the United States Attorney’s Office for the Western District of Virginia will continue to vigorously pursue these cases with our federal and local partners in order to protect Virginia’s communities.”

“Today’s settlement sends a clear message to all registrants that it is essential to maintain effective controls to prevent the diversion of controlled substances” said DEA Washington Division Special Agent in Charge Jarod Forget. “DEA is dedicated to combat the prescription drug abuse problem in Virginia and throughout the country and to hold all DEA registrants accountable.”

“The FDA oversees the U.S. drug supply to ensure that patients receive medicines that are safe and effective,” said Special Agent in Charge George A. Scavdis of the FDA Office of Criminal Investigations Metro Washington Field Office. “We will continue to protect the public health by holding accountable health care companies that fail to safeguard their prescription drug inventory and thereby compromise their patients’ health and comfort.”

“With opioid deaths and overdoses at record-breaking highs, especially across Southside Virginia, there must be zero tolerance of trusted health professionals engaging in drug diversion,” said Colonel Gary T. Settle, Virginia State Police Superintendent. “For the safety and protection of Virginia’s communities, our Virginia State Police Drug Diversion special agents, in collaboration with our local and federal public safety partners, will continue to aggressively pursue investigations related to the illegal distribution of Fentanyl and other prescription drugs.”

The agreement resolves Sovah Health’s potential civil and criminal liability based on the investigation. As part of the resolution, Sovah Health has committed to additional compliance measures including, but not limited to, having cameras at all Automated Dispensing Machines to capture the activity of placing/removing controlled substances; promptly reporting losses and diversion of controlled substances; taking and reporting disciplinary action taken against employees found to have been responsible for theft, diversion or loss of controlled substances; maintaining a mandatory random drug testing program for employees; and conducting a full physical inventory of all federally scheduled II-V controlled substances more frequently than required by law.

Assistant U.S. Attorneys Justin Lugar and Randy Ramseyer represented the United States in this matter.

The investigation was conducted by the Food and Drug Administration – Office of Criminal Investigations, the Drug Enforcement Administration – Roanoke Resident Office Diversion Group, and the Virginia State Police.

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