AG Rutledge: State suing opioid distributors (Updated)

Editor’s note: Story updated with a comment from the group representing opioid distributors.

Arkansas Attorney General Leslie Rutledge filed suit on behalf of the state against the three largest opioid wholesale distributors Thursday (April 25) saying they helped cause the opioid epidemic because they failed to monitor, investigate, report and reject suspicious orders.

The three defendants, Cardinal Health, McKesson Corp. and AmerisourceBergen Drug Corp., control 85% of the opioid distribution market and have $375 billion in annual revenues, Rutledge said in a press conference.

The lawsuit alleges the distributors violated the Arkansas Deceptive Trade Practices Act. It says they were negligent, created a public nuisance and were unjustly enriched by their practices.

“Defendants repeatedly and purposely breached their duties under state and federal law,” the lawsuit says. “They sold prescription opioids, including hydrocodone and/or oxycodone, to retailers in the State of Arkansas and/or to retailers from which Defendants knew prescription opioids were likely to be diverted to the State of Arkansas.”

The lawsuit says distributors maintain extensive data and know about patterns of improper distribution. That information was used to evaluate their sales and workforce. However, it was not used to stop illegal drug diversions. The defendants allegedly did not report suspicious orders to state and federal authorities, including the state Board of Pharmacy.

“Defendants’ failure to monitor, detect, investigate, reject, or report suspicious orders are direct and proximate causes of the widespread diversion of prescription opioids for non-medical purposes into the State,” the lawsuit says. “The unlawful diversion of prescription opioids is a direct and proximate cause and/or substantial contributing factor to the opioid epidemic and prescription opioid abuse, addiction, and death in the State of Arkansas. …

“Defendants intentionally continued their conduct with the knowledge that such conduct was creating the opioid nuisance and causing the harms and damages alleged herein. … Some red flags are so obvious that no one who engages in the legitimate distribution of controlled substances can reasonably claim ignorance of them.”

Under the federal Controlled Substances Act, the distributors are required to disclose suspicious orders of controlled substances. Distributors are also required to stop shipment of orders flagged as suspicious and that could be diverted to illegal channels.

The lawsuit, which was filed in Pulaski County circuit court, demands a jury trial. It makes room for other distributors to be added to the suit and says the state believes that each of those potential defendants “is responsible in some manner for the events and occurrences alleged in this Complaint.”

The lawsuit notes that the defendants have already paid fines related to their activities. Cardinal Health has paid $98 million in state and federal fines. McKesson has agreed to pay more than $163 million. During one five-year period, it reported only 16 orders out of 1.6 million as suspicious. AmerisourceBergen has paid $16 million in settlements and has had certain licenses revoked.

Rutledge said in the press conference that opioid distributors placed 236 million pills in Arkansas in 2016, about 78 for every Arkansan. That year, the state was second in the nation in prescribed opioids. That includes only four drug codes, so the actual number is likely higher. In 2017, 188 people died in Arkansas from an overdose involving opioids, and they are the state’s leading cause of drug-related deaths.

Rutledge said the lawsuit’s purpose is to reimburse the state for the expenses it has incurred as a result of the epidemic, and to hold the distributors accountable for their actions. Award or settlement money would be used for treatment, reimbursements for expenses, and education regarding the dangers of opioids. Rutledge said the needs will be ongoing.

While no specific dollar amount is being sought at this time, the lawsuit says the state is entitled to civil penalties of up to $10,000 for each violation under the Arkansas Deceptive Trade Practices Act.

Fourteen states and one territory individually have also filed suit against drug distributors. Rutledge said the state will remain independent in its lawsuit at this time.

John Parker, senior vice president of communications for the Healthcare Distribution Alliance, said Rutledge is targeting the wrong group.

“The misuse and abuse of prescription opioids is a complex public health challenge that requires a collaborative and systemic response that engages all stakeholders. It’s also critical to understand the role of each stakeholder across the supply chain. Distributors do not conduct research, manufacture, market, or prescribe medications, nor do they influence prescribing patterns, the demand for specific products, or patient-benefit designs. The idea that distributors are responsible for the number of opioid prescriptions written defies common sense and lacks understanding of how the pharmaceutical supply chain actually works and is regulated. Those bringing lawsuits would be better served addressing the root causes, rather than trying to redirect blame through litigation.”

Rutledge last year filed suit against opioid drug manufacturers Johnson & Johnson, Purdue Pharma and Endo. That lawsuit is still in the discovery phase.

Asked if the office next would target pharmacies, Rutledge said, “We’re not going to close any doors, and so whether it’s specific manufacturers, if it’s distributors, doctors, whomever in the chain that has increased the problem. … The investigation is going to be widespread, an all-the-above approach.”