During its federal court arraignment On July 29, FedEx plead not guilty to an indictment charging the company with facilitating the distribution of controlled substances. The indictment, which was brought in a San Francisco Federal Court, charges the company with shipping opioids and other pharmaceuticals for Internet pharmacies, many of which did not require prescriptions before selling to customers. FedEx has previously said that it denies any allegations that it colluded with pharmacies or facilitated the shipment of drugs in any capacity and reached out to clarify several points, reaffirming that position.
In a statement sent to the InsideCounsel, FedEx makes clear its position on the issue. Patrick Fitzgerald, FedEx senior vice president Marketing and Communications, said, “FedEx does not tolerate the use of our networks for any illegal activity, and we have a long history of partnering with law enforcement throughout the country to stop unlawful use of our networks. These efforts include providing assistance to the DEA in combatting rogue Internet pharmacies. FedEx continues to ask that the government provide a list of pharmacies engaging in illegal activity, so that the company can immediately discontinue accepting their shipments."
FedEx also directly addressed several of the claims that the indictment made. For example in paragraph 4 , the inducement charges that "on no less than six different occasions, the DEA, FDA or members of Congress and their staff informed FedEx that illegal Internet pharmacies were using its shipping services."
In response questions about whether or not the company was contacted or told to shut down services, Fitzgerald says, “No. We stand ready to discontinue service immediately to any pharmacy the government identifies to us as engaging in illegal activities.”
As for the potential penalties that the company could face, Fitzgerald says, “The $820 million number in the government's indictment and accompanying press release reflects an alleged maximum fine, not a mandatory penalty. The number purports to include gains made by the online pharmacy shippers discussed in the indictment. We have no information about the pharmacies' finances, but FedEx's gains from shipments by the pharmacies listed in the indictment were far below $820 million. We note that United Parcel Service paid $40 million to resolve a similar investigation by the Department of Justice relating to providing shipping services for internet pharmacies that the government claims were operating illegally. “
While still very early in the proceedings of the case, we’ll continue to update as the story develops.