The U.S. government on Tuesday filed its first criminal charges against a major drug distributor and company executives over their roles in the nation’s opioid epidemic.
Rochester Drug Co-operative Inc (RDC), one of the 10 largest U.S. drug distributors, agreed to pay 420 million and enter a deferred prosecution agreement to resolve charges it turned a blind eye to thousands of suspicious orders for opioids, as part of a years-long drive to bolster profit.
Laurence Doud, who had been RDC’s chief executive for more than 25 years, was charged with two conspiracy counts, and according to his lawyer plans to plead not guilty.
Another former executive, compliance chief William Pietruszewski, cooperated with prosecutors and pleaded guilty to three criminal counts.
The case marks a new U.S. government effort to curtail the growing number of addictions to oxycodone and other prescription painkillers, which authorities said are often used by people with no legitimate medical need for them.
Opioids, including prescription painkillers and heroin, played a role in 47,600 U.S. deaths in 2017, according to the U.S. Centers for Disease Control and Prevention.
Opioid makers and distributors face hundreds of lawsuits by U.S. states, counties and cities accusing them of using deceptive marketing to sell the painkillers.
Purdue Pharma and other opioid makers face hundreds of lawsuits accusing them of deceptive marketing to sell the painkillers.
Many lawsuits also target distributors, including AmerisourceBergen Corp, Cardinal Health Inc and McKesson Corp. None was named as a defendant in the Rochester case.
The deferred prosecution agreement allows RDC to keep operating, subject to three years of independent compliance monitoring, and avoid prosecution if it complies with the terms.
RDC admitted to having violated federal narcotics laws from January 2012 to March 2017 by distributing controlled substances, including oxycodone and fentanyl, to pharmacy customers despite internal “red flags” that they would be used improperly.
According to court papers, RDC filled more than 1.5 million orders for controlled substances from pharmacy customers from 2012 to 2016, and reported just four out of more than 2,000 suspicious orders to the Drug Enforcement Administration.
“We made mistakes,” spokesman Jeff Eller said in a statement. “We accept responsibility for those mistakes.”
Doug surrendered to authorities to face the two criminal conspiracy accounts against him.
His lawyer, Derrelle Janey, said Doud “is not the culprit here. We intend to fully defend against these charges.”
(Reporting by Jonathan Stempel in New York and Nate Raymond in Boston; Editing by Tom Brown and Richard Chang)