Newly unsealed exhibits in opioid case reveal inner workings of the drug industry
New revelations from the opioid files, ordered unsealed by a federal judge Tuesday, include the biggest names in the drug industry: McKesson, Purdue, Mallinckrodt, Cardinal Health, CVS, Walgreens and Walmart. (Washington Post photo illustration/Sources: John Moore/Getty Images, Kristoffer Tripplaar/SIPA USA/AP, Rogelio V. Solis/AP, Jay LaPrete/Bloomberg News, Joe Raedle/Getty Images, Drew Angerer/Getty Images, Charles Mostoller for The Washington Post)
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Newly unsealed documents in a landmark lawsuit Tuesday in Cleveland show the pressure within drug companies to sell opioids in the face of numerous red flags during the height of the epidemic.
The release of the exhibits — sworn depositions of executives, internal corporate emails, and experts’ reports — also reveals the ignored concerns of some employees about the huge volume of pain pills streaming across the nation.
In one exhibit, emails show that a Purdue Pharma executive received an order from a distributor for 115,200 oxycodone pills, which was nearly twice as large as that distributor’s average order over the previous three months. The order came in at 4:15 p.m., according to the emails sent in October 2009.
It was approved one minute later.
In another of the exhibits, Nathan J. Hartle, vice president of regulatory affairs and compliance for McKesson, the nation’s largest drug distributor, was asked during a July 2018 deposition about the billions of oxycodone pills that the company had shipped nationwide.
Did McKesson accept partial responsibility for the societal costs?
“I think we’re responsible for something,” Hartle said. “I don’t know what — how you define all societal costs and — I still believe it depends on different circumstances.”
A third exhibit shows that a customer service rep for Mallinckrodt Pharmaceuticals in May 2008 raised questions internally about orders from a new customer, Sunrise Wholesale of Florida.
“Were you expecting Sunrise to place such a large order??” the customer service employee asked in an email to Victor Borelli, a national account manager with Mallinckrodt. “And do they really want 2520 bottles of OXYCODONE HCL 30MG TABS USP, 100 count each ??”
This email was forwarded to one of Mallinckrodt’s top compliance officers with the note: “FYI — the customer service reps all state that Victor will tell them anything they want to hear just so he can get the sale.........”
Those glimpses inside the companies now accused of fueling the nation’s opioid epidemic appear in exhibits that were unsealed Tuesday by U.S. District Judge Dan Polster in a massive lawsuit unfolding in a Cleveland courthouse against some of the biggest names in the drug industry. In addition to McKesson, Purdue and Mallinckrodt, they include Cardinal Health, CVS, Walgreens and Walmart.
A Drug Enforcement Administration database made public July 15 as part of the lawsuit revealed that the companies inundated the nation with 76 billion oxycodone and hydrocodone pills from 2006 through 2012. Nearly 2,000 cities, counties and towns are alleging that the companies knowingly flooded their communities with highly addictive painkillers, fueling an epidemic that has killed more than 200,000 people since 1996.
[Follow The Post’s investigation of the opioid epidemic]
“Their failure to identify suspicious orders was their business model,” the plaintiffs wrote in a motion outlining their arguments in the case.
The database and the exhibits were unsealed after a legal challenge by The Washington Post and the owner of the Charleston Gazette-Mail in West Virginia.
In statements to The Post, the drug companies have issued multiple defenses of their actions during the crisis. They contend they were trying to sell legal painkillers to legitimate patients who had prescriptions. They also blamed the crisis on overprescribing by physicians and on corrupt doctors and pharmacists who worked in “pill mills” that handed out drugs with few questions asked.
The companies further asserted that they should not be held responsible for the actions of those who abused the drugs and that the DEA had all the information it needed to block pills from reaching the black market.
“Unlike the DEA, distributors have no authority to stop physicians from writing prescriptions, nor can they take unilateral action to halt pharmacies’ ability to dispense medication,” said John Parker, a spokesman for the Arlington, Va.-based Healthcare Distribution Alliance, a trade group for the industry.
The exhibits shed new light on aspects of the epidemic that have come to symbolize the magnitude of the crisis.
It has been previously reported that one of the hotbeds was a rural town of 400, Kermit, W.Va., where McKesson shipped 5 million pain pills over two years to a single pharmacy.
How could that be, a lawyer for the plaintiffs suing McKesson and two dozen other companies in the landmark lawsuit asked a senior DEA official during an April 2019 deposition.
“Is there any basis that you can make up in reality or otherwise where a town of 400 people have a medical need for five million pills of opium in a span of 24 months?” attorney Paul T. Farrell Jr. asked.
“There isn’t,” said Thomas Prevoznik, the acting section chief of pharmaceutical investigations for the DEA’s Diversion Control Division. “There isn’t.”
Farrell asked Prevoznik why the federal government did not charge McKesson with a crime.
“Based on my attorney’s advice, I’m not going to answer that,” Prevoznik said.
Mallinckrodt Pharmaceuticals was the top opioid pill manufacturer in the nation from 2006 through 2012, making nearly 28.9 billion pills. (Whitney Curtis/AP Images for Mallinckrodt)
One of the exhibits contains the deposition of Karen Harper, Mallinckrodt’s senior manager of controlled substance compliance. She said she alerted her superiors in 2008 that Mallinckrodt, the largest manufacturer of opioids in the nation, was not capable of detecting suspicious orders and its systems needed to be upgraded. But company executives decided against hiring an outside vendor to help detect such orders, she said.
Mallinckrodt later revised its monitoring program. Executives developed other terms for suspicious orders, including “peculiar” or “unusual,” Harper said. Those orders warranted review, but they were not necessarily deemed to be suspicious and they were shipped out, she said.
“There were times that we shipped an order before the review was complete, but we never shipped suspicious orders,” Harper said.
In 2010, the company changed the algorithm for flagging “peculiar” drug orders — from two times the prior year’s order average to three times — because there were too many orders to review, Harper said.
The DEA database shows that Mallinckrodt’s subsidiary, SpecGx, manufactured nearly 28.9 billion pills from 2006 through 2012.
[Five takeaways from the DEA’s pain pill database]
The DEA started to investigate Mallinckrodt in 2011, after noticing that hundreds of millions of the company’s oxycodone 30 mg tablets had been shipped to Florida. The powerful 30 mg oxycodone pill, known as a “blue,” was the most widely abused and sought-after dose during the height of the epidemic.
Government investigators alleged in internal documents previously obtained by The Post that the company’s lack of due diligence could have resulted in nearly 44,000 federal violations and exposed it to $2.3 billion in fines. But after negotiations with the Justice Department, the company in 2017 reached a $35 million settlement and admitted no wrongdoing for its drugs that were shipped to Florida.
That year, Mallinckrodt reported $2.1 billion in net income.
After the settlement, Harper said she offered her resignation.
“It happened on my watch,” she said in her deposition.
Harper left her job in 2018 after a 43-year career with the company. At the time of her January 2019 deposition, Harper said she was still employed by Mallinckrodt.
A former national sales director for Mallinckrodt, Victor Borelli, appears in several of the unsealed exhibits. His 465-page deposition was taken at a law firm in Baltimore in late November.
Borelli worked for Mallinckrodt between 2005 and 2012. He moved to the company after working as a representative for the Sara Lee Corp., where he sold coffee products for the company.
Borelli was a hard-working and high-achieving salesman, according to the exhibits. He once described his job as “ship, ship, ship.” In January 2009, he told a salesman for a drug-distribution client that opioids he was selling were “Just like Doritos keep eating, we’ll make more.”
In March 2010, a customer service manager for Covidien, then-Mallinckrodt’s Ireland-based parent company, sent an email to Borelli flagging a “peculiar order” of hydromorphone tablets from a distributor-client in Cincinnati.
“Do you know why they have increased their volume so much in March?” the manager asked.
Borelli responded: “. . . [T]hey are rolling and I don’t want to lose the momentum with them.”
On July 15, 2011, a customer representative at Covidien raised concerns about another uptick in orders. She sent an email to colleagues with a document that she said “indicates an increase in ordering for several of our existing wholesaler/distributors.” She added: “This might raise a red flag in the suspicious order monitoring reports.”
Borelli was one of the recipients. He pointed out that while shipments to two wholesalers, McKesson and Cardinal, had increased, another distributor’s orders had decreased.
“Let’s not let Suspicious order monitoring limit or restrict shipments because this is only a swapping of business between wholesalers,” Borelli wrote.
Borelli did not return requests for comment. An attempt to reach him at his home was turned away.
Mallinckrodt distanced itself from Borelli. About the Doritos statement, the company wrote: “This is an outrageously callous email from an individual who has not been employed by the company for many years. It is antithetical to everything that Mallinckrodt stands for and has done to combat opioid abuse and misuse.”
But while Borelli worked at Mallinckrodt, his efforts were rewarded, according to the exhibits.
In 2006, he received a $26,442 bonus. Four years later, he received a $110,335 bonus.
“The amount of your bonus was tied, at least in part, to the controlled substances you were selling?” Derek W. Loeser, a plaintiffs’ lawyer, asked Borelli during the deposition.
“Yes,” Borelli said. “Yes.”
Jeanmarie McCauley, left, of Rockland, Mass., holds a sign she made of her three children who died within three years to drug addiction, as those who lost loved ones to opioid overdoses protest outside the headquarters of Purdue Pharma in Stamford, Conn., on Aug. 17, 2018. (Jessica Hill/AP)
As millions of deadly prescription opioids were spilling onto the streets of Ohio, executives at some of the nation’s largest drug companies worked together to fill a single, large prescription, for a woman they knew only as “Aunt Sandra.”
The prescription for 50 pills of 15 mg oxycodone every day for an entire month started out in spring 2009 as a favor from a former executive at Cardinal Health for her “relative.”
The episode was revealed halfway through Borelli’s deposition.
According to emails presented by plaintiffs in that deposition, Borelli was near the end of a chain of seven executives and account managers at three companies who pressed to ensure that a pharmacy in Columbus would have enough drugs on hand to fill the unusually large order — yet never flagged it to authorities as suspicious.
The request was initiated by Heather Goodman, according to emails read into the record during the deposition. In 2009, Goodman was two years removed from a job as a vice president at Cardinal, in charge of supply-chain integrity, according to her online biography.
Her request for help for her “Aunt Sandra” surfaced in emails that plaintiffs obtained from Mallinckrodt.
Goodman wrote to Dave Irwin, a national account manager at Mallinckrodt: “I spoke with my aunt, and the independent pharmacy she chose is Dane Drugs,” Goodman wrote. “We have not contacted the pharmacy to let them know this is happening yet . . . as soon as we know that this arrangement is set up, Aunt Sandra will call her doctor and have him call in the script for her. Please let us know how you would like to proceed.”
Internally, Irwin raised an alarm: “Her monthly prescription is 1500 oxycodone 15 milligrams. I did the math in my head late yesterday and this equates to 50 tablets per day. Is that even possible?”
The order was so large that account managers at Mallinckrodt had to call one of their distributors, KeySource Medical, to ask the pharmacy to order additional product.
For Aunt Sandra, “two cases a month to the below pharmacy,” wrote Kate Muhlenkamp, a Mallinckrodt product manager.
“KeySource is going to try to ship the pharmacy one month’s needs at a time, so depending on what is happening in the marketplace (supply/demand), we may have to circle back in a month to allocate more oxy 15 to them for this special circumstance,” Borelli replied.
Steve Cochrane, a vice president of sales for KeySource Medical, said a pharmacist was nonetheless shocked the following week when the deal went down. He wrote to Borelli, joking about the exchange.
“Guess who called today . . . Dane Drug!” he wrote. “They want to know who the F this lady Aunt Sandra was that showed up looking for her oxycodone 15 milligram today. You can’t make this stuff up.”
Goodman, who now serves as general counsel for a pharmaceutical firm in Columbus, did not respond to phone messages and requests for comment on social media. Irwin and Muhlenkamp did not respond to phone messages. Cochrane declined to comment through an attorney.
Jenn Abelson, Amy Brittain, Robert O’Harrow Jr., Shawn Boburg, Jennifer Jenkins, Andrew Ba Tran, Aaron Williams, Alice Crites, Julie Tate and Katie Zezima contributed to this report.
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