This story has been updated.
The three pharmacies all supplied opioid prescribers who were later convicted or indicted, and the stores all got painkillers from Chesterbrook-based drug distributor AmerisourceBergen, a new lawsuit says.
One of the convicted doctors supplied multiple drug rings with prescriptions for oxycodone, according to the Drug Enforcement Agency. Another “was essentially a drug dealer masquerading as a doctor," who was sentenced to more than 13 years in prison, according to the Justice Department.
To New York’s attorney general, these examples are just part of what it has termed the most extensive lawsuit to date against wholesale drug distributors for their role in the opioid epidemic. In addition to its focus on the Sackler family behind Oxycontin-maker Purdue Pharma, the suit filed last week outlines new details on the alleged failures by drug distributors to keep tabs on the addictive painkillers they supply to pharmacies.
While the distributors are little-known to consumers, the so-called “Big Three” that corner the market are among the top Fortune 500 companies. AmerisourceBergen generated $167.9 billion in revenue last year. Its competitors McKesson and Cardinal Health had 2018 revenues of $208.4 billion and $137 billion, respectively.
“The one area in which Amerisource has consistently stood out as compared to its major competitors,” the lawsuit says, “is its unwillingness to identify suspicious orders, even among customers that regularly exceeded their thresholds and presented multiple red flags of diversion.”
In a statement, the company said: “the allegations made in the New York State Lawsuit are exactly that – allegations. The simple truth is that AmerisourceBergen reports directly to the DEA the quantity and receiving pharmacy of each order of opioids it ships, as well as reporting suspicious orders and refusing to serve customers where appropriate.”
As more than 2,000 municipalities, tribes, and other groups have sued manufacturers and distributors, including dozens of Pennsylvania counties and towns, AmerisourceBergen and the other companies have defended against accusations that they fueled the opioid epidemic.
AmerisourceBergen spent $61.5 million on litigation costs, mostly related to opioids, in fiscal 2018. The company’s gross profit last year grew 1.5 percent, to $4.6 billion.
Distributors buy medications from drug manufacturers, and then sell them to customers such as pharmacies and hospitals, which in turn sell those prescriptions to patients. Federal and state regulations require distributors to identify and report “suspicious orders,” meaning those that are unusual in size and frequency, and deviate substantially from a normal pattern.
“Everyone in the pharmaceutical distribution chain has a responsibility for monitoring for suspect behavior,” said attorney Bill McGoldrick, a former vice-chairman of the American Bar Association’s advisory board on substance use disorder. Without a sound corporate compliance program in place, “it enables people to take advantage, and do unnecessary prescribing," which can feed pill mills, he said.
AmerisourceBergen, the attorney general’s suit says, had “numerous” customers who showed common signs of suspicious activity: scoring above the 90th percentile, in a given region, in terms of total opioid orders, percentage of patient “doctor-shoppers,” and percentage of cash payments.
At a pharmacy in Queens, according to the suit, 77 percent of prescriptions between 2013 and 2017 were written by prescribers who were eventually indicted or convicted for pushing opioids. In 2014 alone, that corresponding figure was 90 percent. “Amerisource appears to have only stopped shipping in 2017,” the suit says.
About half of the opioid prescriptions dispensed by a Bronx pharmacy, from 2013 to 2015, “were filled by prescribers who were later convicted,” the lawsuit says, including physician Robert Terdiman, who pleaded guilty in 2015, and agreed to forfeit more than $350,000. He was involved in a ring of two-dozen doctors, clinic employees, and drug traffickers who distributed more than five million oxycodone pills, federal prosecutors said at the time.
"As of 2018, this pharmacy was still a customer of Amerisource,” according to the New York suit.
The company said, “The lawsuit contains no accusations that AmerisourceBergen shipped opioid products to pharmacies that were not registered by the DEA and licensed by the New York State Board of Pharmacy. AmerisourceBergen is not a law enforcement agency and therefore lacks the authority of those agencies.”
Each of the Big Three distributors in recent years have settled government suits over the flow of controlled substances. And last year, Congress grilled distributor’s executives on Capitol Hill. CEO Steve Collis testified to a congressional committee that his company doesn’t control how many opioid medications are “prescribed, dispensed, or ultimately used.”
He also said AmerisourceBergen devotes “significant resources" to its anti-diversion program, and has continually improved its order monitoring program to respond to drug abuse trends, and use data-driven analysis.
The company has previously said that it believes its process produces reports that are “highly precise and actionable” for the DEA, whereas other distributors may submit a higher volume of reports.
New York contends that AmerisourceBergen’s “complex, automated approach...increases ordering flexibility for its customers rather than limits it,” and doesn’t meet state obligations for reviewing suspicious orders.