Current Report Articles
President's Perspective – Drug Companies Under the Microscope

Litigation (July 19, 2019) – There are literally hundreds of lawsuits against drug companies accusing them of contributing to and causing the epidemic of opioid misuse and addiction. The plaintiffs in those lawsuits include states, as well as more than 1,000 cities and counties across the country. Plaintiffs have long accused drug manufacturers and wholesalers of fueling the opioid epidemic by producing and distributing billions of pain pills while making billions of dollars. The companies have paid more than $1 billion in fines to the Justice Department and Food and Drug Administration over opioid-related issues, and hundreds of millions more to settle state lawsuits. But until recently, many of the underlying facts behind these accusations and fines have not been public.

As part of the most recent litigation, lawyers sought information from a database maintained by the Drug Enforcement Administration that tracks the path of every single pain pill sold in the United States — from manufacturers and distributors to pharmacies in every town and city. The drug companies argued that the release of the "transactional data" could give competitors an unfair advantage in the marketplace. However, earlier this week a United States district judge in Ohio ordered release of at least part of this huge database. The information is fascinating, as well as troubling.

The database reveals that just six companies distributed 75 percent of the 76 billion oxycodone and hydrocodone pills from 2006 through 2012: McKesson Corp., Walgreens, Cardinal Health, AmerisourceBergen, CVS and Walmart. Three companies manufactured 88 percent of the opioids: SpecGx, a subsidiary of Mallinckrodt; Actavis Pharma; and Par Pharmaceutical, a subsidiary of Endo Pharmaceuticals. During this same period, the volume of the pills handled by the companies increased about 51 percent from 8.4 billion in 2006 to 12.6 billion in 2012. By contrast, doses of morphine, a well-known treatment for severe pain, averaged slightly more than 500 million a year during the period. The states that received the highest concentrations of pills per person per year were: West Virginia with 66.5, Kentucky with 63.3, South Carolina with 58, Tennessee with 57.7 and Nevada with 54.7. Rural areas were hit particularly hard: Norton, Virginia, with 306 pills per person; Martinsville, Virginia, with 242; Mingo County, West Virginia, with 203; and Perry County, Kentucky, with 175. In that time, the companies distributed enough pills to supply every adult and child in the country with 36 each year.

The law requires that if company officials notice orders of drugs that appear to be suspicious because of their unusual size or frequency, they must report those sales to the DEA and hold back the shipments. The newly released database, however, suggests that the law was often ignored. For example, one store in Brighton, Colorado, population 38,000, was ordering 2,000 pain pills per day. Cardinal Health sold 12 million oxycodone pills to four pharmacies over four years. In 2011, Cardinal shipped 2 million doses to a pharmacy in Fort Myers, Florida, while comparable pharmacies in Florida typically ordered 65,000 doses per year.

The opioid litigation is now larger in scope than the tobacco litigation of the 1980s, which resulted in a $246 billion settlement. The release of this large amount of data will no doubt encourage serious settlement discussions that will almost surely dwarf those involved in the tobacco litigation.
--Tom Bell