A supply-side catastrophe

When New York Attorney General Letitia James in late March filed a sweeping amended complaint against Rochester Drug Co-operative Inc. and others for their roles in the opioid epidemic, she said “the manufacturers and distributors of opioids are to blame for this crisis and it is past time they take responsibility.”  

RDC was targeted again three weeks ago when criminal charges against the company and two of its former executives were announced. “This prosecution is the first of its kind,” said Geoffrey Berman, U.S. attorney for the Southern District of New York. “Executives of a pharmaceutical distributor and the distributor itself have been charged with drug trafficking, trafficking the same drugs that are fueling the opioid epidemic that is ravaging this country.”

The idea that opioid manufacturers and distributors are solely or chiefly responsible for the scourge that since 1999 has claimed nearly 400,000 lives might appeal to many people. The reality, however, is more complicated. Like the financial crisis that nearly brought the U.S. economy to its knees, the opioid crisis is a calamity caused by multiple, connected factors that together ignited explosive growth in the supply of the addictive drugs.

The role played by RDC is undeniable—indeed, the company does not dispute it. In a deal reached with prosecutors, RDC accepted responsibility for its conduct and agreed to pay a $20 million penalty. It also promised to reform and enhance its Controlled Substances Act compliance program and submit to supervision by an independent monitor—all required by the government in exchange for deferred prosecution and, if RDC stays in compliance, dismissal of charges after a five-year period.

RDC stipulated to the accuracy of a statement of facts that its criminal conduct was willful. The company—at the time one of the nation’s 10 largest wholesale drug distribution businesses, with more than $1 billion in annual sales—“violated the federal narcotics laws by distributing controlled substances—including opioids such as oxycodone and fentanyl—to pharmacy customers that RDC knew were dispensing controlled substances for illegitimate purposes.”

The document also describes how RDC made false statements to the Drug Enforcement Agency about its program for maintaining controls against the diversion of controlled substances.

“RDC’s compliance department and senior management were well-aware of the highly addictive qualities and frequent abuse of opioids such as oxycodone and fentanyl, which abuse can lead to opioid dependence, addiction, and the use of illicit narcotics such as heroin,” the document continues. RDC also knew full well the cost in lives lost and collateral consequences.

Yet the company distributed with abandon—in 2012, it sold 4,743,500 tablets of oxycodone; by 2016, the number had increased to 42,233,650 tablets. With fentanyl, RDC’s distribution also grew at an exponential rate—from 63,497 dosages in 2012 to 1,316,115 dosages four years later. Over this period the percentage of its revenues from controlled substances doubled—even as it paid a fine of $360,000, in 2015, for numerous violations of the Controlled Substances Act, in a civil case brought by Preet Bharara, then U.S. attorney for the Southern District.

In a statement issued April 23 by RDC after the company reached civil and criminal settlement agreements with the U.S. attorney’s office, a representative said: “We made mistakes … and RDC understands that these mistakes, directed by former management, have serious consequences.”

William Pietruszewski, RDC’s former chief compliance officer, has pleaded guilty to three counts as part of a cooperation agreement with the government. Former CEO Laurence Doud III pleaded not guilty to two charges, and in a lawsuit filed against RDC he claims the company and its current management is trying to make him a scapegoat. Nowhere in the suit, however, does he deny wrongdoing occurred at the company.

RDC and its two former executives may be alone among distributors in facing criminal charges, but they have plenty of company in the lawsuit brought by New York’s attorney general. The amended complaint expands an earlier suit filed against manufacturer Purdue Pharma. In addition to Purdue Pharma and its affiliates, it names members of the Sackler family (who own Purdue) and trusts they control, Janssen Pharmaceuticals and its affiliates (including its parent company Johnson & Johnson), and four other manufacturers. RDC is one of four distributors named; the others are industry giants McKesson Corp., Cardinal Health Inc., Amerisource Bergen Drug Corp.  

The complaint alleges that the manufacturers “implemented a common ‘playbook’ to mislead the public about the safety, efficacy, and risks of their prescription opioids. … (They) target(ed) susceptible doctors, flood(ed) publications with their deceptive advertisements, and offer(ed) consumers discount cards and other incentives to entice them to request treatment with their products.”

A crisis decades in the making

If the allegations are true, these companies and the Sackler family have played a particularly odious role in this public health disaster. Yet the opioid epidemic and its terrible toll could not have occurred without a series of changes in how opioids are prescribed and payments reimbursed.

A March 2018 article published in Mayo Clinic Proceedings titled “How Good Intentions Contributed to Bad Outcomes: The Opioid Crisis” describes the crisis as one 30 years in the making. “The reasons for this are many,” its authors write. “Good intentions to improve pain and suffering led to increased prescribing of opioids, which contributed to misuse of opioids and even death.”

The steps along this road to hell include a brief 1980 letter to the editor in the New England Journal of Medicine declaring that chronic-pain sufferers who received opioids rarely became addicted. Before long, as studies in the journal Pain and elsewhere reached the same conclusion, opioids were used to treat any chronic pain condition.

In the mid-1990s, the U.S. Food and Drug Administration approved Purdue Pharma’s OxyContin, which the company “began aggressively marketing … for the treatment of chronic pain, particularly to primary care physicians,” the article notes. A federal court later found that a Purdue Pharma promotion provided false information about the addictive qualities of OxyContin and fined the company $634.5 million. But it appears that was merely a bump in the road.

The Mayo Clinic Proceedings article also describes how regulators began to evaluate doctors and hospitals on how well they controlled patients’ pain and reimbursements became tied to patients’ perception of pain control. In 2010, the Patient Protection and Affordable Care Act elevated patient satisfaction as a payment incentive. As a result, more and more amounts of opioids were prescribed, with some insurance companies and pharmacists contributing to the problem by charging more for nonopioid alternatives and by discounting prescriptions of larger numbers of pills compared with smaller ones that would require refill. A 2017 study in The Annals of Internal Medicine found more than one-third of U.S. adults today use prescription opioids—more than the number of Americans who use tobacco. 

Clearly, there’s enough culpability to go around. The behavior alleged in the actions brought by the state attorney general’s office and federal prosecutors is reprehensible, to be sure. (Less than two weeks ago, in yet another case, the founder and top executives at Insys Therapeutics, a firm that sold a fentanyl-based painkiller, were found guilty of racketeering charges.) But doctors, hospitals, researchers, and federal and state lawmakers and government agencies are not blameless either.

Together, well-intentioned or not, they created supply-side catastrophe that will be with us for years to come.