J&J, Teva and four others under criminal probe as feds investigate opioid makers for failing to monitor distribution
On top of hundreds of lawsuits waged by state and local governments, several major drugmakers and distributors are now facing a federal criminal probe for their role in perpetuating the opioid crisis.
Federal prosecutors in Brooklyn are investigating whether pharma companies have violated the Controlled Substance Act — a provision normally reserved for drug dealers according to experts — by intentionally allowing their opioids to flood communities, the Wall Street Journal first reported. As it turned out, at least six companies including J&J, Teva, Mallinckrodt, Amneal and the distributors McKesson and AmerisourceBergen have disclosed in recent SEC filings that they have received grand jury subpoenas from the US Attorney’s Office for the Eastern District of New York.
Notably, John Kapoor — the founder and former chairman of Insys — was convicted of violating the Controlled Substances Act but a federal judge has overturned that part of his conviction (leaving charges of conspiracy, wire and mail fraud, forfeiture and racketeering intact).
Between April and August of this year, the aforementioned six companies were asked to turn over documents related to their anti-diversion policies and procedures and distribution of their opioid medication.
J&J and Teva wrote that they understand the subpoenas to be “part of a broader investigation into manufacturers’ and distributors’ monitoring programs and reporting under the Controlled Substances Act.” The Mallinckrodt, Amneal and McKesson filings also contained versions of the statement, while AmerisourceBergen didn’t specify the nature of the probe.
Criminal charges, if they were to result from the investigation, would mark a significant escalation in the legal tactics deployed against high-profile players accused of fuelling the opioid epidemic. According to the CDC, prescription opioids led to 218,000 deaths in the US from 1999 to 2017.
Earlier this year the US Attorney in Manhattan charged Rochester Drug Cooperative, the sixth-largest drug wholesaler in the US, with distributing narcotics that it knew “were being sold and used illicitly” and failing to report these improper uses to authorities. Two former execs were also indicted for criminal offenses.
The office called the case “the first of its kind” as it essentially charged a pharmaceutical distributor and its execs for drug trafficking.
It’s a significant departure from the types of litigation that opioid makers such as Purdue Pharma have faced, in which their aggressive sales tactics were blamed for causing physical and financial harm to the plaintiffs. Purdue, whose marketing strategies for OxyContin were widely considered to have planted misconceptions about the addictive nature of opioids across the medical community, has filed for bankruptcy as the first step of a $10 billion settlement that’s still under dispute.
John Kapoor, the highest-ranking pharma exec to be convicted in an opioid-related case so far, was most infamous for cooking up an elaborate scheme to bribe doctors — going so far as offering lap dances — into prescribing their powerful drug for cancer pain, Subsys, to patients who didn’t even have cancer.
But a jury also found him guilty of violating the Controlled Substances Act. US District Court Judge Allison Burroughs overturned it on Tuesday, ruling that prosecutors had failed to prove that they had the intent to distribute the drug for non-legitimate uses.