Who’s to Blame for the Opioid Crisis?

Who’s to Blame for the Opioid Crisis?

Are Pharma Giants the Root of the Opioid Epidemic?

Since OxyContin was first introduced in 1996, there have been over 217,000 deaths related to the misuse and abuse of prescription opioids. Although the number of prescriptions for opioids has declined since 2012, sales of OxyContin continue to rise.

Three of pharma industries giants, McKesson, AmerisourceBergen, and Cardinal Health, are among the 15 largest American companies in the country by revenue, and they distribute over 90% of the nation’s medical supplies and drugs, including opioids. Purdue Pharma is the maker of OxyContin (generic name oxycodone). The three largest distributors sold 1.6 billion oxycodone pills between 2010 and 2018… in the state of New York alone.

Are these companies to blame for the opioid crisis?

Yes… mostly.

Thousands of doctors who ran “pill mills” are also responsible, as are the shady pharmacists around the country who have churned out opioid orders by the tens of thousands. The core of the blame, however, does lie with the companies that act as the middleman – the distributors. These are the companies responsible for moving all kinds of medications from warehouses to drugstores, pharmacies, clinics, and hospitals. These distributors are the financial “muscle” that drove the widespread push of prescription opioids, triggering a drug abuse epidemic that has spun out of control.

These distributors have been accused in court of devising intricate, illegal systems designed to evade industry regulators, as is proclaimed in new civil suits from attorneys general in Washington State, New York, and Vermont. They claim that distributors would warn pharmacies when they were under suspicion of the Drug Enforcement Administration. They also allege that distributors circumvented limits on how many opioids others were allowed to purchase, in addition to often giving advance notice on the few-and-far-between occasions they performed audits.

What about the big pharma giants?

According to the New York complaint, Amerisource supplied prescriptions at a Queens pharmacy – 75% of which were written by doctors who were later convicted or indicted. Cardinal, one of the other giants, kept shipping to a pharmacy in Suffolk County, New York, that had the highest oxycodone volume in the county, disregarding continuous flags on its orders marking them as “suspicious.”

It doesn’t stop there.

McKesson maintained shipments to two pharmacies for six years after discovering the pharmacies had been filling prescriptions from doctors who were likely involved in industry crimes. When did those shipments finally stop? Only when those doctors were indicted.

“How do CEOs of these companies sleep at night?” Bob Ferguson asked at a recent news conference. Ferguson is Washington’s Attorney General.

In additional lawsuits, evidence has come to light that government representatives at all levels have been ineffective at regulating and policing distributors. In the first 10 years of the opioid crisis, the three largest distributors lacked suitable programs to monitor orders that were marked as being suspicious – this is despite federal law requiring the tracking of narcotics by looking out for cash payments and surges in orders. Not much has changed since then, either; they have all promised and failed to build systems to prevent opioid misuse and abuse.

But, distributors have rejected these allegations.

Amerisource pointed a finger at the D.E.A, which it says receives data on every order shipped, and is notified of any suspicious ones. The company said in a statement, “It defies common sense for distributors such as AmerisourceBergen to be singled out.”

Cardinal representatives claim in the company’s statement that it had “developed and implemented a constantly adaptive and rigorous system to combat controlled substance diversion.” In addition, Kristin Chasen, a spokeswoman for McKesson stated, “We reject the state’s suggestion that our employees circumvented safeguards to increase sales.”

Numbers Don’t Lie

In a page from the New York attorney general’s complaint, it states that McKesson’s system for reporting suspicious orders went from “inadequate” to “inscrutable.” According to the complaint, out of the 1.6 million orders processed between 2008 and 2013 by its distribution center in Colorado, the pharma company reported only sixteen as being suspicious.

16 out of 1.6 million.

McKesson settled for $150 million with the Justice Department in 2017 after years of allegedly dodging legal monitoring requirements. It would be the first of many settlements. In 2008, the same pharma company paid over $13 million to settle, and Cardinal also paid $34 million to settle federal claims. (McKesson supplies Walmart, and Cardinal supplies CVS pharmacies.) Cardinal also paid $64 million in 2012, 2016, and 2017 in settlements with the Justice Department.

What were some of the “lofty practices” that resulted in so few reports being made?

Order volume thresholds were created that would trigger reporting, but many failed to meet that objective. A tactic designed to circumvent order volume thresholds is known as “cutting”. Cardinal was found to have canceled pharmacy orders that exceeded the threshold, but then would allow subsequent, smaller orders, according to the New York complaint. The Cardinal spokeswoman Brandi Martin said that it was not a tactic to avoid reporting, and claims that all cut orders were still reported to the D.E.A.

McKesson continued to ship to a pharmacy that saw oxycodone orders increase fivefold in just six months, then refused another request for an 80% increase. During the recent hearings, Florida Democrat Kathy Castor noted one drugstore in West Virginia that had been flooded with opioids: 5,000 per day from McKesson and 4,000 pills per day from Cardinal.

The Fox and the Henhouse

New York State’s Bureau of Narcotic Enforcement, like many state agencies, is ill-equipped to monitor distribution: They have fewer than 20 investigators trying to oversee the actions of 120,000 prescribers and 5,586 pharmacies. A former director of the New York bureau says the task does not belong in the Health Department because it maintains such close ties with health care providers. The director explained, “They’re policing their own, and it doesn’t work.” He left the bureau in 2010 – the Health Department stated he was a “disgruntled former employee.” Dr. Andrew Kolodny, an addiction expert stated, “It’s not a good system. It’s the fox guarding the henhouse.”

Since then, distributors have marshaled lobbyists to contribute funds to sponsors and cosponsors of a 2016 law that thwart the D.E.A.’s efforts to halt suspicious drug shipments. These lobbyists have contributed $1.5 million so far.

So for now, distributors remain in control of the system – and the opioid crisis.

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By |2019-06-20T20:50:00+00:00May 30th, 2019|

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A driven and accomplished marketer, manager and leader with over $50mm in lifetime sales under his belt. Through marketing and sales leadership and using data to drive decisions, he has a strong track record of turning small businesses into larger, profitable enterprises.