The U.S. Attorney for the Southern District of New York filed criminal charges against executives of a Rochester-based opioid drug distributor. It is believed to be the first time drug executives were criminally charged with diverting opioids.
"Large Scale Drug Dealing"
The federal indictment alleges Rochester Drug Cooperative (RDC) distributed highly addictive substances to pharmacies. It also alleges that senior executives knew those substances were being “sold and used illicitly.”
RDC executives "cared more about profits than laws intended to protect human life," said Geoffrey Berman, the U.S. Attorney for the Southern District of New York. The opioid drug distributor "routinely prioritized sales over compliance. [It then became] the knight in shining armor for pharmacies that had been cut off by other distributors."
RDC sells pharmaceuticals and other health-related products to more than 1,300 pharmacies across New York, New Jersey and Pennsylvania. Court papers say several of RDC's largest pharmacy customers had disproportionate cash purchases and high percentage of sales consisting of oxycodone and fentanyl, but that RDC did not alert the DEA, as required.
RDC's pharmacies saw oxycodone sales skyrocket from 4.7 million pills in 2012 to 42.2 million in 2016. An 800% increase. Furthermore, same period fentanyl dose sales went from 63,000 to 1.3 million. A 2,000% increase.
The opioid drug distributor "made the deliberate decision not to investigate, monitor, and report to the DEA pharmacy customers that it knew were diverting controlled substances for illegitimate use," read the court papers. "Because it knew that reporting these pharmacies would likely result in the DEA investigating and shutting down its customers."
"Why did they do it?" asked U.S. Attorney Berman. "The answer is greed."
Monroe County Sheriff's Office Undersheriff Korey Brown chimed in on RDC's malfeasance.
"You can’t be in today’s society and not know how bad the opioid crisis is," Brown said. "... it’s horrifying what they did."
RDC's actions amount to nothing less than "large scale drug dealing," he added.
Slap on the Wrist?
Former RDC CEO Laurence F. Doud III and former Chief of Compliance William Pietruszewski were criminally charged as part of the feds' investigation.
Pietruszewski has pleaded guilty to narcotics and fraud conspiracies and is reportedly cooperating with authorities.
Though the criminal charges against the opioid drug distributor and its executives could be a precedent-setting move (up until now state and federal authorities have always sought civil actions against drug companies), RDC does seem to be getting off rather easy.
In the first place the highly profitable opioid pusher was permitted to settle the whole case for a mere $20 million. This despite an estimated annual revenue that ranges from $1 to $2 billion. And even that paltry $20 million is scheduled to be paid out over the course of five years.
And while RDC did also agree to three years of independent monitoring, the criminal prosecution will be "deferred." That means there will be no prosecution so long as RDC abides by the agreement terms.
Forget the fact that this is the second time in four years that the federal Drug Enforcement Administration found significant problems with the RDC monitoring system. Or that RDC settled that first case by paying only $360,000, even after admitting that it did not, as required, report "thousands of purchase orders from RDC." The company claims it was overwhelmed.
RDC "did not anticipate, nor were we prepared for, this dramatic increase in opioid prescription volume," an RDC spokesman said. "The entire industry has been affected."
So has the entire country, fella.
Rochester Drug Cooperative is currently the sixth largest pharmaceutical distribution company in the country. It's also a member of the Healthcare Distribution Alliance, which includes Cardinal Health and McKesson, two other notorious opioid drug distributors.
The company was founded in 1905. And while RDC makes its headquarters just outside of Rochester, it also runs an extensive distribution operation in the New York City region that most of its pharmacy customers call home.
Again, RDC's annual revenue estimates run between $1 billion and $2 billion. And since the company is a cooperative of independent pharmacies, its members are its very customers. Authorities maintain that kind of relationship can be dangerously incestuous and encourage the negligent oversight.
A Healthcare Distribution Alliance Research Foundation publication shows that pharmaceutical distributors were responsible for the handling of almost 96 percent of drugs on the market. It also shows that U.S. pharmaceutical sales from distributors grew from $305 billion in 2013 to $408 billion in 2016. For anyone counting, that's an astronomical 34% increase.
Little wonder RDC didn't see fit to call the cops on itself.
A First Big Step
Recovery Boot Camp applauds U.S. Attorney Berman and his office for pursuing a criminal case against RDC and its executives. We also firmly believe the opioid drug distributor acted criminally. And that it was consequently only right to charge them accordingly. We also firmly believe that all drug executives involved in the opioid crisis should face criminal charges for their misdeeds. Because until they're forced to face the music, these companies will continue to put profits over people. Let's just hope the next slate of criminal charges leads to real jail time.
“We made mistakes. And we understand that these mistakes have serious consequences," RDC spokesman Jeff Eller said.