US drug company executives charged with fuelling opioid crisis

Nick Allen
Former Rochester Drug Co-Operative CEO Laurence Doud III, right, leaves court in New York - AP

Two former executives of a major US pharmaceutical company have been charged with conspiracy to distribute controlled substances in an unprecedented case.

The prosecution came as Donald Trump vowed to crack down on abuses by “Big Pharma" that have fuelled America’s opioid epidemic, which claims the lives of nearly 50,000 people a year.

It was the first time senior corporate executives have faced criminal charges in connection with distributing powerful prescription painkillers like oxycodone and fentanyl, which carry a high risk of addiction and overdose.

Laurence Doud, 75, chief executive of Rochester Drug Cooperative (RDC), pleaded not guilty in New York to charges of conspiracy to distribute controlled substances, and conspiracy to defraud the United States.

He has been released on bail of $500,000. The charges carry a minimum sentence of 10 years in jail.

William Pietruszewski, 53, the company's chief compliance officer, has already pleaded guilty to the same charges.

RDC, based in New York, is one of Americas's largest distributors of prescription opioids, supplying 1,300 pharmacies, and has an annual turnover of over $1 billion.

Prosecutors said it had failed to report at least 2,000 suspicious orders of drugs and the executives were fulfilling orders they knew to be fraudulent.

Bottles of prescription painkiller OxyContin Credit: Reuters

RDC employees had themselves described some of the company's customers as "very suspicious," it was alleged.

The company also knew particular pharmacies it was supplying to be a "DEA [Drug Enforcement Administration] investigation in the making" or "like a stick of dynamite waiting for DEA to light the fuse".

Prosecutors said: “Nonetheless, throughout the period in question, RDC, at the direction of Doud, increased its sales of oxycodone and fentanyl exponentially."

From 2012 to 2016 its annual sales of oxycodone tablets went up from 4.7 million to 42.2 million, and its fentanyl sales rose from 63,000 to 1.3 million.

The company itself entered into a non-prosecution agreement with the US Attorney's office in New York and agreed to pay a $20 million fine.

It will not be prosecuted and will be allowed to retain its licence to distribute drugs, while promising to reform its practices.

In a statement RDC admitted it had failed to report shipments of drugs it recognised as suspicious.

US Attorney Geoffrey Berman said: "This prosecution is the first of its kind. Executives of a pharmaceutical distributor have been charged with drug trafficking, trafficking the same drugs that are fueling the opioid epidemic that is ravaging this country. This epidemic has been driven by greed."

Around 47,600 people in the US died in 2017 from opioid overdoses, according Centers for Disease Control and Prevention. That was up 17 per cent from the previous year.

Deaths from synthetic opioids like fentanyl rose 45 per cent in that time.

State and local government officials have launched hundreds of legal cases accusing big pharmaceutical companies like Purdue Pharma of deceptively marketing opioids.

Purdue Pharma makes makes the prescription painkiller OxyContin. In recent weeks the Tate museums, and the Guggenheim Museum in New York, cut ties with the billionaire Sackler family which owns the company. 

America's opioid epidemic has been especially damaging in rural areas where Mr Trump is popular. He declared it a national emergency in October 2017.

Mr Trump has said he convinced Xi Jinping, the Chinese president, at a meeting in Argentina in December, to designate fentanyl as a controlled substance. Much of the black market fentanyl in the US comes from China.

The US president has also argued that building a wall on the border with Mexico would help keep out drugs, especially heroin.