AmerisourceBergen (NYSE:ABC) and two of its subsidiaries are facing a civil lawsuit filed by the U.S. Department of Justice (DoJ). The regulator has alleged that the company failed to report suspicious opioid-related orders to the Drug Enforcement Administration (DEA).
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The accusations are the result of a multi-year investigation conducted by the DEA, the Civil Division’s Consumer Protection Branch, and other U.S. Attorneys’ Offices. AmerisourceBergen was found to be in violation of the Controlled Substances Act and is said to have “prioritized profits over the well-being of Americans.”
U.S. Attorney for the Eastern District of New York, Breon Peace, stated, “We allege that AmerisourceBergen, a wholesale drug distributor, flagrantly and repeatedly violated its obligation to notify the DEA of suspicious orders for controlled substances, which directly contributed to the epidemic of prescription opioid abuse across the United States.”
In its defense, AmerisourceBergen said that it repeatedly informed the DEA about the suspicious pharmacies and their orders of controlled substances like opioids.
It is worth mentioning that last year, AmerisourceBergen, along with Johnson & Johnson (JNJ), Cardinal Health (CAH), and McKesson (MCK), reached a $26 billion settlement on a number of legal matters related to the opioid epidemic.
Is ABC Stock a Buy?
AmerisourceBergen’s inorganic growth activities, commitment to increasing dividends consistently, and impressive earnings history, reflect the long-term growth potential of the company.
ABC stock currently has a Strong Buy consensus rating based on six Buys and one Hold. The average stock price target of $177.29 implies 6.8% upside potential. Shares of AmerisourceBergen are up about 23% over the past three months.
Interestingly, ABC is a part of the “Perfect 10” smart score list. Historically, the stocks with the perfect score have surpassed the returns of the benchmark index.
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