How Fentanyl Came to North America From China and Stayed

“A look at how Canada became addicted”

By Mark A. York (January 2, 2018)

Fentanyl is 100 times stronger than heroin

(MASS TORT NEXUS MEDIA)  Fentanyl: Manufactured in China, it easily crosses porous borders, triggering a heroin-like bliss in users – and, all too often, death. It’s as easy as ordering a book online: Sign up for an account, choose a method of payment, and receive the package in three to four business days.

But first, there are some choices to make. The fentanyl hydrochloride comes in a variety of quantities, ranging from a half-gram sample for $35 (U.S) to a kilogram for $21,000. It also comes in different strengths – purchasers are warned to “be careful” and do their research on the product, described as 99-per-cent pure. And of course, there are the related pharmaceutical products: the fentanyl patches, tablets and even lollipops.

Buyers are assured their package won’t get seized at the Canadian border. To avoid the risk of detection, says a supplier from China, he conceals the purchase alongside urine test strips. Not that there’s reason to worry: Canadian border guards cannot open packages weighing less than 30 grams without the consent of the recipient. (A Globe and Mail reporter corresponded with sellers and suppliers using a pseudonym and did not disclose himself as a journalist, in order to obtain accurate information from the seller.)

The supplier, who identified himself only as Alan, says he has two customers in Canada. He e-mails photos of fentanyl hidden inside silica-desiccant packets – the type normally used when shipping goods such as electronics – and a screen shot of a recent order from Canada, including a shipping address for a clothing store in British Columbia’s picturesque Okanagan Valley.

Fentanyl from China is sometimes hidden in silica desiccant packages.

 

 

 

 

 

 

 

 

 

 

 

 

Alan says he is based in the southern metropolis of Guangzhou, the trading crossroads for manufacturing in China – a country that is, in turn, at the centre of the vast underground world of synthetic-drug manufacturers. Enforcement is fragmented, and companies operate with impunity.

Fentanyl is an opioid, a class of painkillers that also includes oxycodone and morphine. Prescription-grade fentanyl is up to 100 times more toxic than morphine. Developed in 1959 by a Belgian chemist, it was quickly adopted as a pain reliever and anesthetic in medical settings. It came into widespread use in the mid-1990s with the introduction of the transdermal patch that releases the drug into the patient’s bloodstream over two or three days. When the drug is processed in a clandestine lab with no quality controls, it is difficult to get the dosage right, making it potentially much more dangerous.

Chemical companies in China custom-design variants of pharmaceutical-grade fentanyl by tweaking a molecule ever so slightly. A few hundred micrograms – the weight of a single grain of salt – are enough to trigger heroin-like bliss. But the line between euphoria and fatal overdose is frighteningly thin: An amount the size of two grains of salt can kill a healthy adult.

The supply chain for illicit fentanyl begins in China, but the problems Canada is experiencing start right here at home: No other country in the world consumes more prescription opioids on a per-capita basis, according to a recent United Nations report. The widespread use of prescription opioids is behind the rise of a new class of drug addicts, many of whom are turning to the black market to feed their habit. In British Columbia and Alberta, the two hardest-hit provinces, fatal overdoses linked to fentanyl soared from 42 in 2012 to 418 in 2015.

Among the investigation’s findings from interviews with nearly three dozen medical experts, public-health doctors, police and family members of overdose victims: Federal and provincial rejection of harm-reduction measures hindered the response to the fentanyl crisis in Alberta. Neither Ottawa nor the provinces are taking adequate steps to stop doctors from indiscriminately prescribing highly addictive opioids to treat chronic pain – in 2015 alone, doctors wrote enough prescriptions for one in every two Canadians. And addiction-treatment programs are few and far between – a legacy of the former Conservative government’s tough-on-crime policies.

The investigation also found that online suppliers are exploiting gaps at the border. Fentanyl and many chemically similar drugs are classified as controlled substances in Canada, making them illegal to import without a licence or permit. But, for online suppliers, the borders may as well not exist; they devise clever ways to conceal the drugs and skirt inspection rules. Suppliers often ship drugs in packages under the 30-gram threshold, ensuring border agents won’t open them. One supplier with whom a Globe reporter corresponded promised to ship fentanyl inside a gift-wrapped package. Another pledged, “No problem of police coming to you,” as the package would be labelled household detergent, complete with a certificate of analysis. Many suppliers will even offer guaranteed reshipment to customers in the event their package gets intercepted.

Because illicit fentanyl is so potent, once it arrives here, the white crystalline powder gets diluted with powdered sugar, baby powder or antihistamines before it can be sold on the street and consumed. It is also mixed into other drugs, and sold as heroin or OxyContin.

As Canada wakes up to a mounting public-health crisis, it is left playing catch-up with the United States, which is confronting its own epidemic of illicit and prescription drug abuse. Policymakers in Canada do not even have the basic tools to monitor this leading cause of accidental deaths – in contrast to the situation in the United States, there is no national system tracking fatal opioid overdoses.

The arrival of illicit fentanyl in Canada is a “game changer,” says Benedikt Fischer, a senior scientist at Toronto’s Centre for Addiction and Mental Health. When Canada’s opioid problem involved only the abuse of prescription drugs, he says, policymakers squandered an opportunity to address it. Now that many addicts are turning to a drug that is manufactured without government oversight – and in countries beyond our borders, to boot – it is nearly impossible to get a grip on the problem. “Even if we wanted to now suddenly take action, there’s nothing we can do,” he says. “We have no way of controlling thousands of illegal drug labs in China.”

Jason Berry (left) and Patrick Provencher were arrested for producing fentanyl tablets

 

 

 

 

 

 

 

 

The First Major Canadian Fentanyl Bust

It was the winter of 2012 when a Montreal police detective heard about a drug-dealing operation run by Patrick Provencher, at the time, unknown to police. But it would take another year for Det. Yves Rousseau to confirm the seemingly innocuous tip about the low-level drug dealer that would lead to the first big bust of a Canadian operation dedicated to producing and selling industrial quantities of bootleg fentanyl.

The case was uncharted territory for Canadian law enforcement – three investigators became ill after kicking in the door of the illicit lab and handling the toxic drug, including one who spent a night in hospital. The police drug lab, to which hundreds of kilograms of drug-making substances were hauled, was placed under quarantine. The fire department’s hazardous-material unit had to decontaminate the drugs before they could be examined.

“All of these products were in residential neighborhoods, next to people living their lives,” Det. Rousseau testified in court proceedings, after Mr. Provencher’s 2013 arrest, as he told an astonished judge about the turn of events. “This was very dangerous to public security.”

A year after police were tipped off about Mr. Provencher, a 40-year-old computer engineer trained at Montreal’s École Polytechnique, a second source confirmed the information.  Mr. Provencher had recruited Jason Berry, a 33-year-old who had just served time for producing and selling drugs, as his business partner. The two men had set up a lab in a garage in the hardscrabble Pointe-Saint-Charles neighborhood, rented several storage units, and were running the business out of the downtown gym where Mr. Provencher worked.

They received raw material from China, cut the drug with fillers, put the mixture through a pill-press machine to produce tablets, and then shipped them by courier all over North America, often in hollowed-out appliances. In fact, police arrested the two men on their way to a UPS store to ship a microwave oven containing 10,180 fentanyl tablets to New Jersey.

Police found nearly 200,000 pills in various storage units along with pill presses, pulverizers and dryers capable of churning out thousands of tablets an hour. The two men pleaded guilty, and were each sentenced to about eight years in prison in 2014, minus credit for time served.  “The quality of the pills was unbelievable and the quantity was unheard of,” Det. Rousseau said.

 

Purdue began sending adverse drug reaction reports to Health Canada in 2000, describing everything from patients who experienced hot and cold sweats and dizziness after taking Oxycontin to fatal overdoses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

An Opioid Addicted Nation

The raid of the Montreal lab in April, 2013, shows how fentanyl has revolutionized the illegal drug trade. Unlike the massive infrastructure and cartels required to manufacture and transport heroin or cocaine, just about anyone can buy and sell fentanyl. Because it is so powerful, a little goes a long way. A kilogram ordered over the Internet – an amount equal in weight to a medium-sized cantaloupe – sells on the street in Calgary for $20-million, making it a drug dealer’s dream.

The collective inaction of government leaders, doctors, police and border officials leaves Canada dealing with the fallout from a drug that wouldn’t even be on the streets were it not for a decision made two decades ago. Until the mid-1990s, opioids were primarily prescribed to cancer patients and others suffering debilitating pain. But in 1996, Health Canada approved OxyContin, a brand-name version of oxycodone, to relieve moderate-to-severe pain, heralding a sea change in the treatment of pain.

Purdue Pharmaceutical, the maker of OxyContin, launched sales campaigns promoting the benefits of the drug. Doctors started prescribing it for everything from backaches to fibromyalgia. OxyContin quickly became the top-selling long-acting opioid in Canada. But it also became a lightning rod in the early 2000s, as reports of addiction and overdoses exploded.

The Office of the Chief Coroner of Ontario raised concerns, noting in a 2004 report that deaths linked to oxycodone climbed steadily between 1999 and 2003, according to documents obtained by The Globe through an access-to-information request. The report says that although no attempt was made to determine whether the detected oxycodone was due to “the ingestion of OxyContin or any other oxycodone-containing formulation, it is noteworthy that the increase in the prevalence of oxycodone findings in death investigations coincides with the introduction of Oxycontin [sic] to the Canadian market.”

 

 

 

 

 

 

OxyContin was popular not only with people who became addicted after receiving prescriptions, but also with heroin users, because they could easily snort it like cocaine or inject it like heroin for a quick high.

In 2012, Purdue pulled OxyContin from the market and replaced it with OxyNEO, a tamper-resistant alternative that is difficult to crush, snort or inject. That same year, the provinces stopped paying for either opioid through their public drug plans. But by focusing specifically on those two drugs, medical experts say, policy makers missed the larger picture. Prescriptions for alternative painkillers, including hydromorphone and fentanyl, rose sharply: The crackdown pushed drug abusers and legitimate patients towards other, potentially addictive painkillers.

The removal of OxyContin left a void that organized crime exploited, says Sgt. Luc Chicoine, the RCMP’s National Drug Program Co-ordinator. Responding to an e-mail from The Globe, Purdue spokeswoman Aimee Sulliman said that the increase in fentanyl-related deaths across Canada is “tragic and a significant public-health concern,” but that it is unfair to blame OxyContin for the rise of the illicit drug. “This is a complex issue and the simplistic causality assertion of the question is misleading.”

Demand for a replacement for OxyContin also gave rise to another problem – a counterfeit version of the drug laced with illicit fentanyl smuggled into Canada and processed for street sale in labs. The labs would typically dye their pills green to mimic the 80-milligram OxyContin pills favored by opioid abusers, and sell them as “greenies” or “shady eighties.”

Fentanyl pills are made to look similar to OxyContin pills

 

 

 

 

 

 

 

 

 

 

 

In comparison to Europeans, North Americans rely heavily on pharmacological solutions to medical woes. In a culture whose citizens pop over-the-counter pills to treat every minor ailment, says Sgt. Darin Sheppard, of the RCMP’s Federal Serious and Organized Crime Synthetic Drug Operations, many drug users view the “greenies” as deceptively harmless.

“It’s just a pill to many people,” Sgt. Sheppard says. “Now, we’re starting to realize the true aspect of what harm can be realized as a result of this.”

Police across Canada have shut down 20 fentanyl labs since that first major bust in April, 2013, mostly operated by organized-crime groups, according to a Globe review. The biggest raids were in B.C., Alberta and Saskatchewan. Police have also made dozens of busts involving illicit fentanyl and the prescription-grade patches. This week, police charged a doctor and a pharmacist from the Toronto area with participating in a fentanyl trafficking ring.

The Canada Border Services Agency (CBSA), the first line of defence in preventing illicit goods from entering the country, is responsible for clearing international mail. In 2015, the agency made just under 11,000 illicit-drug seizures, half of which came through the postal system. And yet, even as the volume of all commercial goods cleared at the border increases, including international mail, the number of front-line officers continues to shrink.

As long as fentanyl continues to arrive in Canada undetected, municipal police cannot arrest themselves out of the problem, says Calgary Police Staff Sgt. Martin Schiavetta. He wants to know how serious the federal government is about fentanyl. “Are they aware of the scope of the problem?” he asks. “What strategies does the RCMP have to deal with these Chinese imports? Does CBSA have enough capacity to deal with all the packages?”

The problem is compounded by the fact that the illicit drug is highly profitable for traffickers. Hakique Virani, an Edmonton physician and former deputy medical officer at Health Canada, described the “whack-tastic” profits for traffickers during a conference last November for the Canadian Society of Addiction Medicine. The raw materials and equipment, including a kilogram of pure fentanyl powder and an industrial-grade pill press, cost under $100,000, he said in his presentation. A kilo of powder is enough to produce one million tablets, which sell for $20 each in Calgary. Police chiefs in Alberta asked the federal government last November to make it illegal to import and operate industrial pill presses, but have had no response.

Deadly Denial of Crisis

Many medical experts say that the former Conservative government did not devote enough resources to harm-reduction measures (such as the provision of overdose antidotes) to address the side effects of drug abuse; Ottawa fought a war on drugs instead, primarily by prosecuting low-level offenders.

Any mention of harm reduction was banished from Health Canada’s website in 2007, when the federal department changed the name of its National Drug Strategy to the National Anti-Drug Strategy.

The Conservatives quietly spread the word that not-for-profit groups would have difficulty getting federal funding if they continued to provide harm-reduction programs. Margaret Ormond, project director of Sunshine House, a harm-reduction centre in Winnipeg, says she was told that if she wanted to continue receiving funding from Ottawa, she should not “go on and on about harm reduction” in her application. Sunshine House stopped seeking federal funding six years ago.

Stephen Harper’s Conservatives also attempted to shut down Insite, North America’s only supervised-injection site, in Vancouver’s impoverished Downtown Eastside, which allows addicts to safely inject illegal drugs under a nurse’s supervision. The Conservatives eventually lost that battle at the Supreme Court of Canada, which in 2011 ordered the government to allow Insite to remain open. The government responded to the ruling by introducing legislation making it difficult, if not impossible, for other sites to open, even though Insite has demonstrated that it has reduced overdose deaths.

“Under the previous government, Health Canada did virtually nothing of consequence to address this epidemic,” says David Juurlink, head of clinical pharmacology and toxicology at Sunnybrook Health Sciences Centre in Toronto. “In some ways, their actions have made it worse.”

Health Canada did not reply to The Globe’s request for comment on how opioids are managed. In a statement, the spokesman for Alberta’s health minister said that the province is actively looking for ways to improve physician education and prescription monitoring, but could not provide specifics on when any results are expected.

In an interview, federal Health Minister Jane Philpott says she is committed to addressing the problem and to making sure people struggling with opioid abuse have access to harm-reduction programs. “I have talked to families who have lost loved ones, whose lives could have been saved if they had either the opportunity to access a supervised-injection site or if the family had known about the availability of naloxone,” Ms. Philpott says, referring to an antidote that reverses the symptoms of an overdose in minutes. “Nothing is more heartbreaking than hearing the stories of these families.”

Rupa Patel, a family physician in Kingston – who, like a lot of her colleagues, has many patients asking for prescription opioids – sees an additional way the government could help mitigate the crisis: by introducing mandatory prescribing limits.

Unlike the United States, which released new guidelines last month advising doctors not to prescribe opioids for chronic pain in most situations, Canada has not revised its guidelines since 2010. Opioid prescriptions totalled 19.1 million in 2015, up from 18.7 million the year before, according to figures compiled for The Globe by IMS Brogan, which tracks pharmaceutical sales.

Dr. Patel sets her own limits with her patients, often refusing to prescribe painkillers, because the risks are substantial and the benefits uncertain. But saying no is difficult, she says, because patients are often in distress. “People expect a pill to fix their problems.”

Even if new guidelines were introduced, there are still not enough resources, nationally, to treat addiction. More beds are needed for those going through withdrawal as well as treatment programs for people addicted to painkillers, especially for aboriginals and those living in remote areas.

And as the pipeline for black-market drugs leads to an unprecedented surge in deaths, Canada has been slow to make naloxone more widely available. Last month, Health Canada changed the status of naloxone to a non-prescription drug. But before it can be sold without a prescription, each province and territory needs to approve the loosened restrictions – something that is not expected to happen until June or July in several regions.

Standoff is a community of 12,800 people that has endured a disproportionate number of Alberta’s fentanyl deaths

 

 

 

 

 

 

 

 

 

 

 

 

 

No province has been hit as hard as Alberta, where fentanyl was found in the blood and urine of 392 fatal-overdose victims over the past two years.

During those early days of the crisis, both federal and provincial health officials were slow to grasp the enormity of the problem, The Globe investigation found. The Alberta government did not issue a province-wide warning to doctors about illicit fentanyl until December, 2014. And it was not until a year later that Alberta’s health minister allowed all first responders across the province to treat overdose victims with naloxone.

The southwestern community of Stand Off, on the Blood Tribe reserve (also known as Kainai Nation), has endured a disproportionate number of Alberta’s deaths. Dr. Esther Tailfeathers, a family physician from Blood Tribe, responded to her first fentanyl overdose in July, 2014. She had just pulled her car into the parking lot of a shopping centre in Lethbridge when she saw a man in a white minivan slumped over the steering wheel. Only minutes earlier he had taken a pill. In the back seat, four children were crying for help as he lost consciousness.

The young man would survive that day. But within months, the reserve in a socially conservative corner of Alberta, where neighbouring communities enforce prohibition and cherish abstinence, would become ground zero for an emerging public-health crisis.

Within days of her first brush with fentanyl, Dr. Tailfeathers began seeing other overdose victims in her hometown of 12,800. At first, she treated one or two overdose cases a week. But that quickly escalated to two or three a shift. “We’ve never seen anything like this,” she says.

Patients soon began sharing stories about illicit pills circulating in the streets of their sprawling reserve near the Montana border. Drug dealers from Calgary and the small First Nations community of Maskwacis travelled there with backpacks full of fentanyl, selling each pill for $80. One girl collapsed at a party after snorting fentanyl, Dr. Tailfeathers says. “We put a tube in her nose, and while she and I were talking I pulled the tube out. There was a green pill stuck in the end.”

By August of 2014, reports of mounting deaths in Blood Tribe began arriving in the Edmonton office of Dr. James Talbot, the province’s chief medical officer at the time. Dr. Talbot quickly set up a working group and invited Dr. Michael Trew, then the province’s chief addictions and mental health officer, to join.

The first thing the two doctors tried to do was distribute naloxone kits to first responders. But they ran into roadblocks: While specialized paramedics were allowed to administer the drug, the majority of first responders in Alberta could not.

The Blood Tribe ended up reaching out to Dr. Virani, who was then still a deputy medical officer at Health Canada, for its first batch of naloxone kits. Dr. Virani remembers his employees going to discount stores to buy the plastic containers that would hold the first 90 doses of the antidote. “At the time that I sent naloxone to Blood Tribe, Health Canada made every effort not to talk publicly about it,” he says.

Meanwhile, crime rates began to soar in Blood Tribe. The community was already struggling with poverty, income inequality and substance abuse. Addicts were breaking into homes looking for valuables. People sold everything they owned to buy another pill, says Dr. Tailfeathers, with some nursing a habit that cost as much as $300 a day. She visited homes where there was no food, no heat and no blankets. The four walls of one house were covered with writings about suicide. “It’s like a natural disaster on the reserve,” she says.

Fence is tagged with “SSB” – South Side Bloods on a street in Standoff called Oxy-Alley 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

In March of 2015, the local band council declared a state of emergency, making it the first community in the country to sound the alarm because of fentanyl. Despite that, Dr. Virani says that Health Canada told him to stop speaking publicly about First Nations health in Alberta. He resigned from the department last month. While he declined to comment about his departure, he accused the bureaucracy of being slow to respond to the fentanyl crisis and being out of step with the minister, Dr. Philpott. “I think she’s a public-health champion on this,” he says.

The naloxone program that Dr. Virani started in Blood Tribe, where the federal government has jurisdiction, helped reduce the number of people overdosing. But once the epicentre of the fentanyl crisis shifted to Calgary, it was up to the provincial government to take action.

In the final months of the former Conservative government’s time in power, the health minister mobilized the first resources to combat fentanyl. Shortly before the government was defeated last May, Alberta sent a notice to hospitals and clinics warning about the risks associated with illicit fentanyl and recommending naloxone to reverse the effects of an overdose. The end-of-government decision may explain what happened next. During the first chaotic week of New Democratic rule in Alberta, both Dr. Trew and Dr. Talbot were told by senior members of the civil service that they were being let go when their contracts expired. A new chief medical officer has yet to replace Dr. Talbot.

The strain was clear on Staff Sgt. Schiavetta’s face during an interview in February. He took over Calgary Police’s drug unit in early 2015, just as fentanyl use began to skyrocket in the city – 81 people in Calgary died from fentanyl overdoses last year, including residents of all genders, ages and socioeconomic groups. Complicating matters, his officers seized three pills last August that were later identified as W-18, an experimental drug 100 times more potent than fentanyl.

But fentanyl remains the drug that takes up most of Staff Sgt. Schiavetta’s time. “Calgary is flooded with fentanyl,” he says.

While Alberta has borne the brunt of the fallout from the arrival of bootleg fentanyl from China, no one saw it coming, Dr. Trew says. “It hit us between the eyes.”

The scourge of illicit fentanyl is now rapidly expanding east. Deaths linked to fentanyl more than doubled to 29 in Manitoba last year, according to a Globe tally of provincial coroners’ figures. In Ontario, fentanyl was the leading cause of opioid deaths for the first time in 2014 – the most recent figures available – and several communities (including Toronto, Kingston and the Niagara region) have been hit with a spike in fatal overdoses in recent weeks.

Drug vendors in China sent promotional pictures of their drug labs 

 

 

 

 

 

 

 

Back to the Source in China

Little is known about the companies in China that make fentanyl, including whether the substance is the product of backyard laboratories or professional chemists concocting it on the side. Or, more likely, both.

For most potential buyers, fentanyl manufacturers appear to exist in plain view, openly advertising the drugs they make. On the Chinese Internet – where no trace of them can be found – and on the ground, it’s a different story altogether.

A Globe reporter travelled to Wuhan to search for the addresses posted online by a series of drug sellers and laboratories. One address pointed to a massive apartment-construction project. Several others were for street numbers of buildings that have either been demolished or were never there.

One clue lies in photographs sent to Rodney Bridge, an Australian man who became an expert on Chinese drug manufacturing after his 16-year-old son died from taking a lab-made drug similar to LSD. His son jumped off a balcony, thinking he could fly.

Mr. Bridge travelled twice to China in search of the person who sold the $2 pill to his son. Vendors sent him pictures of their labs. One showed a cobbled-together arrangement resembling a high-school chemistry lab. Another showed a large industrial operation in a warehouse, complete with a forklift.

A photo of a fentanyl lab offered by a Chinese drug vendor 

 

 

 

 

 

 

 

 

 

 

 

Chinese officials have taken steps to crack down on the illicit drug business. Last October, the country banned 116 substances, including a half-dozen types of fentanyl. Hu Minglang, a director of China’s National Narcotics Control Commission, told The Globe the ban has been “very effective.”

But the ban appears only to have succeeded in placing chemicals slightly under the radar. Dharma Chemicals, a supplier named by the World Health Organization as a seller of acetylfentanyl, one of the 116 illegal chemicals, has struck the drug from its catalogue. But in response to e-mailed queries, a Dharma representative promised quick delivery of the drug, writing, “stock is available.”

China remains in some ways the ideal country to produce synthetic drugs, something no rules are likely to change. As the world’s biggest trading nation, China already sends huge volumes of goods to countries such as Canada, providing “numerous ways to disguise your drugs,” says John Coyne, a former Australian Federal Police intelligence agent who is now head of border security at the Australian Strategic Policy Institute.

It’s a problem the Mexican government has combatted for years. Mexican drug cartels have long imported chemical ingredients from China, which fuel the Latin American country’s manufacture of meth and finance its crime syndicates. “China was never willing to help. They didn’t see it as their problem,” says Jorge Guajardo, the Mexican ambassador to China from 2007 to 2013.

As long as Chinese officials do not crack down more aggressively on exporters, medical experts say, the responsibility for change falls squarely on those in power at the end of the supply chain. “It’s a national tragedy,” says Meldon Kahan, medical director of the Substance Use Service at Women’s College Hospital in Toronto, “and a health-care tragedy where most groups don’t come out looking very good.”

Coming next: How Fentanyl Made it Into the USA for Years

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JPML Approves Opiate Prescription MDL No. 2804: “Profits Before Patients” Exposed

JPML Approves Opiate Prescription MDL No. 2804

 

 

(Mass Tort Nexus) The U.S. Judicial Panel on Multidistrict Litigation, formally approved the “NATIONAL PRESCRIPTION OPIATE LITIGATION MDL No. 2804” earlier today see, JPML Transfer Order in MDL No. 2804, December 5, 2017.  Cases filed into MDL 2804 by counties, cities and other parties are expanding quickly as plaintiffs in more than 100 lawsuits against pharmaceutical companies related to the opioid epidemic were successful, when getting the MDL assigned to Judge Daniel Polster in the US District Court, Northern District of Ohio. While the manufacturers had argued for consolidation in corporate defense friendly New York, and various distributors supported consolidation in West Virginia. The location of this MDL in Ohio, which has been one of the hardest hit states by the “opioid crisis” may have far reaching implications toward the management and ultimate resolution of the onslaught of opioid claims.

Case plaintiffs are filing new claims across the country from Montana to New Mexico and into Wisconsin, where every county in the entire state of Wisconsin has filed suit against the opioid drug makers and distributors, see Mass Tort Nexus briefcase “OPIOID CRISIS MATERIALS INCLUDING: MDL 2804 OPIATE PRESCRIPTION LITIGATION” for materials, including case dockets and information related to all areas of the opioid crisis across the country.

 Parties Vie For Strategic Positioning In Their Preferred Venues

On Sept. 25, 2017, 46 government plaintiffs filed a motion with the

panel seeking coordination or consolidation of their claims and 20

“substantially similar” lawsuits pending in 11 federal districts.

Among the common questions of fact that would justify MDL,

plaintiffs cited:

  • Whether, and to what extent, defendants promoted or allowed

the use of prescription opioids for purposes other than those

approved by the U.S. Food and Drug Administration.

  • Defendants’ knowledge of the actual or potential diversion of

prescription opioids into illicit channels.

  • The nature and adequacy of defendants’ internal controls and procedures for identifying suspicious orders for prescription opioids and reporting them to the authorities.

 Plaintiff Positions:

Pro-MDL plaintiffs had wanted to keep the docket in the hard hit Ohio or West Virginia courts, as the impact there has crossed all lines with no demographic not affected in one way or another by the opioid crisis.

Anti-MDL plaintiffs, including the city of Chicago and eight plaintiffs from West Virginia, opposed centralization, arguing their claims named

distributors or manufacturers, but not both, and the MDL would hinder their individual case interests, which was rejected by the panel, as Judge Charles Breyer of the Northern District of California noted repeatedly, the central factual issue for these claims is “what

did [the manufacturers and distributors] know and what did they do [with that knowledge]?” Plaintiff-specific questions, such as how many pills were shipped into a given community, could be answered in the context of MDL without hindering any individual plaintiff’s case.

 Drug Distributors:

The “big three” distributor defendants, McKesson Corporation, Cardinal Health Inc., and AmerisourceBergen Corporation, wanted the MDL before Judge David A. Faber in the Southern District of West Virginia, which already has a heavy MDL docket with the thousands of TVM cases, and the panel decided against another massive caseload being assigned to that venue.

Drug Manufacturers:

The manufacturers sought transfer to the federal district where they were first sued, in the Northern District of Illinois, where Judge Jorge Alonso is presiding over the lawsuit filed by the city of Chicago in June 2014.  As an alternative to the Illinois court, the manufacturers, with many being based in Connecticut, Pennsylvania, New York and New Jersey, argued for the U.S. District Court for the Southern District of New York, even though there is no opioid litigation pending against them there.

 MDL 2804 Impact on Opioid Crisis

Transferee courts often make crucial pretrial decisions regarding case management, the scope of discovery and class action certification.

The opioid claims have this far suffered from the lack of such coordination and guidance, and MDL 2804 would be making an important step in managing the ever growing case docket. Which has unique challenges including, opioid claims that are not brought by the injured individuals themselves. Instead, these claims have been filed b by government entities that allege they are out massive amounts of money and lost services after having treated or responded to the opioid epidemic for the last 15 years.

As Judge Vance noted throughout the hearing, “there are serious threshold issues” with the government entities’ standing to bring claims that do not apply to other plaintiff categories, such as individuals claiming wrongful death, which could lead to an inefficient MDL for non-government plaintiffs.

JPML Judge Refers to Future Individual Claims

Judge Vance stated, “Therefor the manner in which government entities can prove their damages will be a challenging topic for any MDL court, as will the consideration of how a settlement may be structured such that it does not impinge on the rights of recovery for the actual individuals who may later claim personal harm from opioids.” Which may be taking place sooner as opposed to later, as individual claims are being filed in a few courts across the country already.

 Settlement Ability Of Big Pharma

An additional consideration of the court is the pharmaceutical manufacturers being the primary target of opioid litigation, as the drug makers are alleged to have been involved in stoking the fires of the epidemic from the earliest days. Many of these companies have very large set aside cash reserves for just this type of legal development, which could give them increased leverage and ability to craft settlements in the MDL.  While distributor defendants, will face very different exposures, with resolution that may involve insurance interests, and some insurers have decided to decline coverage and spinning off a whole sub-set of insurance coverage lawsuits.

Healthcare Service Providers and Pharmacies Are Also Targets

Additional defendants in these claims now include pharmacies like CVS, Walgreens, etc, doctors and pain management clinics, all of which have settlement interests and exposures that differ from the others.  As opioid claims mount, reports have surfaced indicating that Purdue Pharma and other pharmaceutical defendants are eyeing settlement, at least at the state level.

RICO Claims Are In The Mix

Several entities have filed RICO claims against the drug makers and distributors alleging that the opioid crisis was developed and directed by boardroom decisions of some of the largest companies in the United States. How this affects the MDL direction will be worth watching.

The opioid plaintiff pool across the country now includes state and local governments, hospitals, labor unions and an ever growing number of individual plaintiffs as well, how Judge Polster decides to manage this extremely complex docket will be watched closely.

 Spin Off MDL’s As Needed

Judge Breyer offered one potential solution to multiple plaintiffs and defendants with divergent interests, which is allow the transferee court to create different “tracks” based on plaintiff category, spin off new MDLs as appropriate, or remand cases that have ceased to benefit from MDL 2804.

 A Conclusion Or A Reckoning

Now that MDL 2804 has been established, the pace of opioid litigation will quickly accelerate, with many new claims being filed daily as they have over the last 10 weeks, since the initial Motion to Consolidate was filed. With an MDL now looming over the entire pharmaceutical industry, the prescription opioid market will never be the same, as evidenced by criminal indictments of drug company executives and ongoing investigations that are taking place in many states. Perhaps now there will be an adjustment of the “profits before patients” policies that have been adopted by Big Pharma in this country, and drug makers will be forced to come to terms with the catastrophic damage they’ve caused by their flood of opioid drugs released across America over the last 15 years.

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JPML APPROVES “OPIATE PRESCRIPTION MDL 2804” AGAINST OPIOID MANUFACTURERS AND DISTRIBUTORS

The UNITED STATES JUDICIAL PANEL ON MULTIDISTRICT LITIGATION  has formally approved the“NATIONAL PRESCRIPTION OPIATE LITIGATION, MDL No. 2804″ on December 5, 2017.

     Assigned to Judge Daniel Polster, US District Court Northern District of Ohio, who will oversee the litigation related to manufacturing, marketing, distribution and sales practices of prescription opioid drugs by Big Pharma drug makers and distributors.  

 

 

 

JPML Transfer Order in MDL No. 2804, December 5, 2017

UNITED STATES JUDICIAL PANEL

on

MULTIDISTRICT LITIGATION

IN RE: NATIONAL PRESCRIPTION OPIATE LITIGATION                                                                            MDL No. 2804

TRANSFER ORDER

Before the Panel:* Plaintiffs in 46 actions move under 28 U.S.C. § 1407 to centralize pretrial proceedings in the Southern District of Ohio or the Southern District of Illinois, but plaintiffs do not oppose centralization in the Southern District of West Virginia.  These cases concern the alleged improper marketing of and inappropriate distribution of various prescription opiate medications into cities, states and towns across the country.  Plaintiffs’ motion includes the 64 actions listed on Schedule A,1 which are pending in nine districts.  Since plaintiffs filed this motion, the parties have notified the Panel of 115 potentially related actions.2 

Responding plaintiffs’ positions on centralization vary considerably.  Plaintiffs in over 40 actions or potential tag-along actions support centralization.  Plaintiffs in fifteen actions or potential tag-along actions oppose centralization altogether or oppose transfer of their action.  In addition to opposing transfer, the State of West Virginia suggests that we delay transferring its case until the Southern District of West Virginia court decides its motion to remand to state court.  Third party payor plaintiffs in an Eastern District of Pennsylvania potential tag-along action (Philadelphia Teachers Health and Welfare Fund) oppose centralization of third party payor actions.  Western District of Washington plaintiff City of Everett opposes centralization and, alternatively, requests exclusion of its case.  Northern District of Illinois tagalong plaintiff City of Chicago asks the Panel to defer transfer of its action until document discovery is completed.

Defendants’ positions on centralization also vary considerably. The “Big Three” distributor defendants,3 which reportedly distribute over 80% of the drugs at issue and are defendants in most cases,

__________________________________________

* Judges Lewis A. Kaplan and Ellen Segal Huvelle did not participate in the decision of this matter.

1  Two actions included on plaintiffs’ motion to centralize were remanded to state court during the pendency of the motion.

2 These actions, and any other related actions, are potential tag-along actions.  See Panel Rules 1.1(h), 7.1 and 7.2. 3

3 AmerisourceBergen Drug Corp., AmerisourceBergen Corp., McKesson Corp., Cardinal Health 110, LLC, Cardinal Health, Inc., Cardinal Health 105, Inc., Cardinal Health 108, LLC, Cardinal Health 112, LLC, Cardinal Health 414, LLC, and Cardinal Health subsidiary The Harvard Drug  – 2 –

support centralization in the Southern District of West Virginia.  These defendants request that the Panel either delay issuing its transfer order or delay transfer of their cases until their motions to dismiss are decided.  Defendant distributor Miami-Luken also supports centralization in the Southern District of West Virginia.  Multiple manufacturer defendants4 support centralization in the Southern District of New York or the Northern District of Illinois; defendant Malinckrodt, LLC, takes no position on centralization but supports the same districts.  Teva defendants5 suggest centralization in the Eastern District of Pennsylvania or the manufacturers’ preferred districts.  Physician defendants6 in three Ohio actions, who are alleged to be “key opinion leaders” paid by manufacturing defendants, do not oppose centralization in the Southern District of Ohio. 

Defendants in several Southern District of West Virginia cases oppose centralization.  These defendants include several smaller distributor defendants or “closed” distributors that supply only their own stores.7  Many of these defendants specifically request exclusion of the claims against them from the MDL.  Also, manufacturer Pfizer, Inc., opposes centralization and requests that we exclude any claims against it from this MDL.8

The responding parties suggest a wide range of potential transferee districts, including: the Southern District of West Virginia, the Southern District of Illinois, the Northern District of Illinois, the Eastern

District of Missouri (in a brief submitted after the Panel’s hearing), the District of New Jersey, the Southern District of New York, the Southern District of Ohio, the Northern District of Ohio, the Eastern District of Pennsylvania, the Eastern District of Texas, the Western District of Washington and the Eastern District of Wisconsin.

After considering the argument of counsel, we find that the actions in this litigation involve common questions of fact, and that centralization in the Northern District of Ohio will serve the convenience of the parties and witnesses and promote the just and efficient conduct of the litigation. Plaintiffs in the actions before us are cities, counties and states that allege that: (1) manufacturers of prescription opioid medications overstated the benefits and downplayed the risks of the use of their opioids and aggressively marketed  (directly and through key opinion leaders) these drugs to physicians, and/or (2) distributors failed to monitor, detect, investigate, refuse and report suspicious orders of prescription opiates.  All actions involve common factual questions about, inter alia, the manufacturing and distributor defendants’ knowledge of and conduct regarding the alleged diversion of these prescription opiates, as well as the manufacturers’ alleged improper marketing of such drugs.  Both manufacturers and distributors are under an obligation under the Controlled Substances Act and similar state laws to prevent diversion of opiates and other controlled substances into illicit channels.  Plaintiffs assert that defendants have failed to adhere to those standards, which caused the diversion of opiates into their communities.  Plaintiffs variously bring claims for violation of RICO statutes, consumer protection laws, state analogues to the Controlled Substances Act, as well as common law claims such as public nuisance, negligence, negligent misrepresentation, fraud and unjust enrichment. 

______________________________________________________________

Group, L.L.C. 4

4 Actavis LLC, Actavis Pharma, Inc., Allergan PLC, Allergan Finance, LLC, Allergan plc f/k/a Actavis plc, Actavis Pharma Inc. f/k/a Watson Pharma Inc., Watson Pharmaceuticals, Inc. n/k/a Actavis, Inc., and Allergan PLC f/k/a Actavis PLS, Cephalon, Inc., Endo Health Solutions, Inc., Endo Pharmaceuticals, Inc., Janssen Pharmaceutica Inc., Johnson & Johnson, Ortho-McNeil-Janssen Pharmaceuticals, Inc., Purdue Frederick Company Inc., Purdue Pharma Inc., Purdue Pharma L.P., Teva Pharmaceuticals Industries Ltd., Teva Pharmaceuticals USA, Inc., Watson Laboratories, Inc., Watson Pharmaceuticals, Inc., Janssen Pharmaceutica Inc. n/k/a Janssen Pharmaceuticals, Inc. 5

5 Teva Pharmaceutical Industries, Ltd., Teva Pharmaceuticals U.S.A, Inc., Cephalon, Inc., Watson Laboratories, Inc., Actavis LLC, and Actavis Pharma, Inc. 6

6 Scott Fishman, M.D., Perry Fine, M.D., Lynn Webster, M.D., and Russell Portenoy, M.D. 7

7 JM Smith Corp.; CVS Indiana, LLC and Omnicare Distribution Center, LLC; TopRx; Kroger Limited Partnership I, Kroger Limited Partnership II, SAJ Distributors (a Walgreens distributor for two months in 2012), Walgreen Eastern Co., Inc., and Rite Aid of Maryland, Inc.; Masters Pharmaceuticals and KeySource Medical; WalMart Stores East, LP. 8

8 Pfizer specifically requests that we exclude any potential future claims against it because of its minimal involvement in the opioid market.  At oral argument, counsel stated that Pfizer was not named as a defendant in any pending case.  In the absence of a case before us, the Panel will not address Pfizer’s argument.

 

 

The parties opposing transfer stress the uniqueness of the claims they bring (or the claims that are brought against them), and they argue that centralization of so many diverse claims against manufacturers and distributors will lead to inefficiencies that could slow the progress of all cases.  While we appreciate these arguments, we are not persuaded by them.  All of the actions can be expected to implicate common fact questions as to the allegedly improper marketing and widespread diversion of prescription opiates into states, counties and cities across the nation, and discovery likely will be voluminous.  Although individualized factual issues may arise in each action, such issues do not – especially at this early stage of litigation – negate the efficiencies to be gained by centralization.  The transferee judge might find it useful, for example, to establish different tracks for the different types of parties or claims.  The alternative of allowing the various cases to proceed independently across myriad districts raises a significant risk of inconsistent rulings and inefficient pretrial proceedings.  In our opinion, centralization will substantially reduce the risk of duplicative discovery, minimize the possibility of inconsistent pretrial obligations, and prevent conflicting rulings on pretrial motions.  Centralization will also allow a single transferee judge to coordinate with numerous cases pending in state courts.  Finally, we deny the requests to delay transfer pending rulings on various pretrial motions (e.g., motions to dismiss or to remand to state court) or until the completion of document discovery in City of Chicago

Although all of the cases on the motion before us involve claims brought by political subdivisions, we have been notified of potential tag-along actions brought by individuals, consumers, hospitals and third party payors.  As reflected in our questions at oral argument, this litigation might evolve to include  – 4 –

additional categories of plaintiffs and defendants, as well as different types of claims.  We will address whether to include specific actions or claims through the conditional transfer order process.[1]

As this litigation progresses, it may become apparent that certain types of actions or claims could be more efficiently handled in the actions’ respective transferor courts.  Should the transferee judge deem remand of any claims or actions appropriate (or, relatedly, the subsequent exclusion of similar types of claims or actions from the centralized proceedings), then he may accomplish this by filing a suggestion of remand to the Panel.  See Panel Rule 10.1.  As always, we trust such matters to the sound judgment of the transferee judge.

Most parties acknowledge that any number of the proposed transferee districts would be suitable for this litigation that is nationwide in scope.  We are persuaded that the Northern District of Ohio is the appropriate transferee district for this litigation.  Ohio has a strong factual connection to this litigation, given that it has experienced a significant rise in the number of opioid-related overdoses in the past several years and expended significant sums in dealing with the effects of the opioid epidemic.  The Northern District of Ohio presents a geographically central and accessible forum that is relatively close to defendants’ various headquarters in New York, Connecticut, New Jersey and Pennsylvania.  Indeed, one of the Big Three distributor defendants, Cardinal Health, is based in Ohio.  Judge Dan A. Polster is an experienced transferee judge who presides over several opiate cases.  Judge Polster’s previous MDL experience, particularly MDL No. 1909 – In re: Gadolinium Contrast Dyes Products Liability Litigation, which involved several hundred cases, has provided him valuable insight into the management of complex, multidistrict litigation.  We have no doubt that Judge Polster will steer this litigation on a prudent course.

 

IT IS THEREFORE ORDERED that the actions listed on Schedule A and pending outside of the Northern District of Ohio are transferred to the Northern District of Ohio and, with the consent of that court, assigned to the Honorable Dan A. Polster for coordinated or consolidated  pretrial proceedings.

PANEL ON MULTIDISTRICT LITIGATION

  

Sarah S. Vance

Chair

Charles R. Breyer Marjorie O. Rendell
R. David Proctor Catherine D. Perry

__________________________________________________________________________________

IN RE: NATIONAL PRESCRIPTION

OPIATE LITIGATION                                                                            MDL No. 2804

SCHEDULE A

Northern District of Alabama

CITY OF BIRMINGHAM v. AMERISOURCEBERGEN DRUG CORPORATION, ET AL.,

C.A. No. 2:17-01360

Eastern District of California

COUNTY OF SAN JOAQUIN, ET AL. v. PURDUE PHARMA, L.P., ET AL.,

C.A. No. 2:17-01485

Southern District of Illinois

PEOPLE OF THE STATE OF ILLINOIS, ET AL. v. PURDUE PHARMA LP, ET AL.,

C.A. No. 3:17-00616

PEOPLE OF THE STATE OF ILLINOIS, ET AL. v. AMERISOURCEBERGEN

DRUG CORPORATION, ET AL., C.A. No. 3:17-00856

PEOPLE OF STATE OF ILLINOIS, ET AL. v. AMERISOURCEBERGEN DRUG

CORPORATION, ET AL., C.A. No. 3:17-00876

Eastern District of Kentucky

BOONE COUNTY FISCAL COURT v. AMERISOURCEBERGEN DRUG

CORPORATION, ET AL., C.A. No. 2:17-00157

PENDLETON COUNTY FISCAL COURT v. AMERISOURCEBERGEN DRUG

CORPORATION, ET AL., C.A. No. 2:17-00161

CAMPBELL COUNTY FISCAL COURT v. AMERISOURCEBERGEN DRUG CORPORATION, ET AL., C.A. No. 2:17-00167

ANDERSON COUNTY FISCAL COURT v. AMERISOURCEBERGEN DRUG

CORPORATION, ET AL., C.A. No. 3:17-00070

FRANKLIN COUNTY FISCAL COURT v. AMERISOURCEBERGEN DRUG

CORPORATION, ET AL., C.A. No. 3:17-00071

SHELBY COUNTY FISCAL COURT v. AMERISOURCEBERGEN DRUG

CORPORATION, ET AL., C.A. No. 3:17-00072

HENRY COUNTY FISCAL COURT v. AMERISOURCEBERGEN DRUG CORPORATION, ET AL., C.A. No. 3:17-00073

BOYLE COUNTY FISCAL COURT v. AMERISOURCEBERGEN DRUG

CORPORATION, ET AL., C.A. No. 5:17-00367

FLEMING COUNTY FISCAL COURT v. AMERISOURCEBERGEN DRUG

CORPORATION, ET AL., C.A. No. 5:17-00368

– A2 –

Eastern District of Kentucky (cont.)

GARRARD COUNTY FISCAL COURT v. AMERISOURCEBERGEN DRUG

CORPORATION, ET AL., C.A. No. 5:17-00369

LINCOLN COUNTY FISCAL COURT v. AMERISOURCEBERGEN DRUG CORPORATION, ET AL., C.A. No. 5:17-00370

MADISON COUNTY FISCAL COURT v. AMERISOURCEBERGEN DRUG

CORPORATION, ET AL., C.A. No. 5:17-00371

NICHOLAS COUNTY FISCAL COURT v. AMERISOURCEBERGEN DRUG

CORPORATION, ET AL., C.A. No. 5:17-00373

BELL COUNTY FISCAL COURT v. AMERISOURCEBERGEN DRUG

CORPORATION, ET AL., C.A. No. 6:17-00246

HARLAN COUNTY FISCAL COURT v. AMERISOURCEBERGEN DRUG

CORPORATION, ET AL., C.A. No. 6:17-00247

KNOX COUNTY FISCAL COURT v. AMERISOURCEBERGEN DRUG

CORPORATION, ET AL., C.A. No. 6:17-00248

LESLIE COUNTY FISCAL COURT v. AMERISOURCEBERGEN DRUG

CORPORATION, ET AL., C.A. No. 6:17-00249

WHITLEY COUNTY FISCAL COURT v. AMERISOURCEBERGEN DRUG

CORPORATION, ET AL., C.A. No. 6:17-00250

CLAY COUNTY FISCAL COURT v. AMERISOURCEBERGEN DRUG

CORPORATION, ET AL., C.A. No. 6:17-00255

Western District of Kentucky

THE FISCAL COURT OF CUMBERLAND COUNTY v. AMERISOURCEBERGEN

DRUG CORPORATION, ET AL., C.A. No. 1:17-00163

LOUISVILLE/JEFFERSON COUNTY METRO GOVERNMENT v.

AMERISOURCEBERGEN DRUG CORPORATION, ET AL., C.A. No. 3:17-00508

THE FISCAL COURT OF SPENCER COUNTY v. AMERISOURCEBERGEN DRUG

CORPORATION, ET AL., C.A. No. 3:17-00557

THE FISCAL COURT OF UNION COUNTY v. AMERISOURCEBERGEN DRUG

CORPORATION, ET AL., C.A. No. 4:17-00120

THE FISCAL COURT OF CARLISLE COUNTY v. AMERISOURCEBERGEN DRUG

CORPORATION, ET AL., C.A. No. 5:17-00136

Northern District of Ohio

CITY OF LORAIN v. PURDUE PHARMA L.P., ET AL., C.A. No. 1:17-01639

CITY OF PARMA v. PURDUE PHARMA L.P., ET AL., C.A. No. 1:17-01872

– A3 –

Southern District of Ohio

CLERMONT COUNTY BOARD OF COUNTY COMMISSIONERS v.

AMERISOURCEBERGEN DRUG CORPORATION, ET AL., C.A. No. 2:17-00662 BELMONT COUNTY BOARD OF COUNTY COMMISSIONERS v.

AMERISOURCEBERGEN DRUG CORPORATION, ET AL., C.A. No. 2:17-00663

BROWN COUNTY BOARD OF COUNTY COMMISSIONERS v. AMERISOURCEBERGEN DRUG CORPORATION, ET AL., C.A. No. 2:17-00664

VINTON COUNTY BOARD OF COUNTY COMMISSIONERS v. AMERISOURCEBERGEN CORPORATION, ET AL., C.A. No. 2:17-00665

JACKSON COUNTY BOARD OF COUNTY COMMISSIONERS v. AMERISOURCEBERGEN DRUG CORPORATION, ET AL., C.A. No. 2:17-00680

SCIOTO COUNTY BOARD OF COUNTY COMMISSIONERS v. AMERISOURCEBERGEN DRUG CORPORATION, ET AL., C.A. No. 2:17-00682

PIKE COUNTY BOARD OF COUNTY COMMISSIONERS v. AMERISOURCEBERGEN

DRUG CORPORATION, ET AL., C.A. No. 2:17-00696

ROSS COUNTY BOARD OF COUNTY COMMISSIONERS v. AMERISOURCEBERGEN

DRUG CORPORATION, ET AL., C.A. No. 2:17-00704

CITY OF CINCINNATI v. AMERISOURCEBERGEN DRUG CORPORATION, ET AL.,

C.A. No. 2:17-00713

CITY OF PORTSMOUTH v. AMERISOURCEBERGEN DRUG CORPORATION, ET AL.,

C.A. No. 2:17-00723

GALLIA COUNTY BOARD OF COMMISSIONERS v. AMERISOURCEBERGEN DRUG

CORPORATION, ET AL., C.A. No. 2:17-00768

HOCKING COUNTY BOARD OF COMMISSIONERS v. AMERISOURCEBERGEN DRUG

CORPORATION, ET AL., C.A. No. 2:17-00769

LAWRENCE COUNTY BOARD OF COMMISSIONERS v. AMERISOURCEBERGEN DRUG

CORPORATION, ET AL., C.A. No. 2:17-00770

DAYTON v. PURDUE PHARMA LP, ET AL., C.A. No. 3:17-00229

Western District of Washington

CITY OF EVERETT v. PURDUE PHARMA LP, ET AL., C.A. No. 2:17-00209

CITY OF TACOMA v. PURDUE PHARMA, L.P., ET AL., C.A. No. 3:17-05737

Southern District of West Virginia

THE COUNTY COMMISSION OF MCDOWELL COUNTY v. MCKESSON CORPORATION,

ET AL., C.A. No. 1:17-00946

HONAKER v. WEST VIRGINIA BOARD OF PHARMACY, ET AL., C.A. No. 1:17-03364

THE COUNTY COMMISSION OF MERCER COUNTY v. WEST VIRGINIA BOARD OF

PHARMACY, C.A. No. 1:17-03716

– A4 Southern District of West Virginia (cont.)

KANAWHA COUNTY COMMISSION v. RITE AID OF MARYLAND, INC., ET AL.,

C.A. No. 2:17-01666

FAYETTE COUNTY COMMISSION v. CARDINAL HEALTH, INC., ET AL.,

C.A. No. 2:17-01957

BOONE COUNTY COMMISSION v. AMERISOURCEBERGEN DRUG CORPORATION,

ET AL., C.A. No. 2:17-02028

LOGAN COUNTY COMMISSION v. CARDINAL HEALTH, INC., ET AL.,

C.A. No. 2:17-02296

THE COUNTY COMMISSION OF LINCOLN COUNTY v. WEST VIRGINIA BOARD OF PHARMACY, ET AL., C.A. No. 2:17-03366

LIVINGGOOD v. WEST VIRGINIA BOARD OF PHARMACY, ET AL., C.A. No. 2:17-03369

SPARKS v. WEST VIRGINIA BOARD OF PHARMACY, C.A. No. 2:17-03372

CARLTON, ET AL. v. WEST VIRGINIA BOARD OF PHARMACY, ET AL.,

C.A. No. 2:17-03532

STATE OF WEST VIRGINIA, ET AL. v. MCKESSON CORPORATION, C.A. No. 2:17-03555 BARKER v. WEST VIRGINIA BOARD OF PHARMACY, ET AL., C.A. No. 2:17-03715

THE CITY OF HUNTINGTON v. AMERISOURCEBERGEN DRUG CORPORATION, ET AL.,

C.A. No. 3:17-01362

CABELL COUNTY COMMISSION v. AMERISOURCEBERGEN DRUG CORPORATION, ET

AL., C.A. No. 3:17-01665

WAYNE COUNTY COMMISSION v. RITE AID OF MARYLAND, INC., ET AL.,

C.A. No. 3:17-01962

WYOMING COUNTY COMMISSION v. AMERISOURCEBERGEN DRUG

CORPORATION, ET AL., C.A. No. 5:17-02311

 

[1]  Eastern District of Pennsylvania Philadelphia Teachers Health and Welfare Fund third party payor plaintiff opposed centralization of such claims, stating that it intends to file a motion for centralization of third party payor claims.  We will address that motion, if it is filed, in due course.

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WEEKLY MDL and MASS TORT UPDATE by MASS TORT NEXUS for Week of November 27, 2017

By Mark A. York (November 30, 2017)

 favicon

 

 

 

 

This week in mass torts around the country:

Opioid Crisis: See Mass Tort Nexus Briefcase Re: OPIOID CRISIS MATERIALS INCLUDING: MDL 2804 OPIATE PRESCRIPTION LITIGATION

> Superseding indictments of Insys Therapeutics Executives Unsealed in USDC of Massachusetts

BOSTON — A federal indictment against seven high-ranking officers of opioid maker Insys Therapeutics Inc. was unsealed Oct. 26 in a Massachusetts federal court charging the men with racketeering, mail fraud and conspiracy for a scheme to pay kickbacks to doctors for, and to fraudulently induce health insurers into approving, off-label prescriptions for the company’s addictive Subsys fentanyl spray (United States of America v. Michael L. Babich, et al., No. 16-cr-10343, D. Mass.).

>Doctor Pleads Guilty To Opioid Health Care Fraud, Taking Kickbacks From Insys

PROVIDENCE, R.I. — A Rhode Island doctor on Oct. 25 pleaded guilty to health care fraud and taking kickbacks for prescribing the opioid Subsys to unqualified patients (United States of America v. Jerrold N. Rosenberg, No. 17-9, D. R.I.).

 > Opioid Distributors Support MDL While Municipalities Oppose

WASHINGTON, D.C. — The “Big Three” national drug distributors on Oct. 20 told a federal judicial panel that they support centralization of more than 60 opioid lawsuits filed against them by various cities and counties (In Re:  National Prescription Opiate Litigation, MDL Docket No. 2804, JPML).

Related Mass Tort Nexus Opiod Articles:

>California Appeals Court Denies Insurance Coverage For Opioid Drug Makers Defense: Will other insurers say no to opioid coverage? Nov 15, 2017

>Targeting Big Pharma and Their Opiate Marketing Campaigns: Across The USA Nov 3, 2017

For more Mass Tort Nexus Opiod Crisis Information See: Mass Tort Nexus Newsletters and MDL Updates

IVC FILTERS:

Cook Medical IVC: See Mass Tort Nexus Briefcase Re: Cook Medical IVC Filter MDL 2570

>First Cook IVC Bellwether Trial Starts in USDC SD of Indiana

INDIANAPOLIS — The first bellwether trial in the Cook Medical Inc. inferior vena cava (IVC) filter multidistrict litigation got under way on Oct. 23 in Indianapolis federal court (In re:  Cook Medical, Inc., IVC Filters Litigation, MDL Docket No. 2570, No. 14-ml-2570, Elizabeth Jane Hill v. Cook Medical, Inc., No. 14-6016, S.D. Ind., Indianapolis Div.).

Cordis IVC Filters: See Cordis IVC Filter Litigation Alameda County, California Superior Court

>Cordis IVC Filter Plaintiffs Tell Supreme Court Trial Proposal Is No ‘Mass Action’

WASHINGTON, D.C. — Plaintiffs in an inferior vena cava (IVC) filter case on Oct. 18 told the U.S. Supreme Court that their suggestion of individual bellwether trials does not convert their actions into a mass action under the Class Action Fairness Act (CAFA), 119 Stat. 4 (Cordis Corporation v. Jerry Dunson, et al., No. 17-257, U.S. Sup., 2017 U.S. S. Ct. Briefs LEXIS 4013).

Taxotere: See Taxotere MDL 2740 (US District Court Eastern District of Louisiana)

>Taxotere MDL Judge Denies Statute of Limitations Motion by Sanofi

NEW ORLEANS — The Louisiana federal judge overseeing the Taxotere multidistrict litigation on Oct. 27 denied without prejudice a motion by defendant Sanofi-Aventis U.S. LLC to dismiss claims barred by applicable statutes of limitations (In Re:  Taxotere [Docetaxel] Products Liability Litigation, MDL Docket No. 2740, No. 16-md-2740, E.D. La.).

Pelvic Mesh: Boston Scientific TVM Litigation MDL 2362

>Exclusion of 510(k) Defense in Boston Scientific Pelvic Mesh Case:

ATLANTA — The 11th Circuit U.S. Court of Appeals on Oct. 19 said multidistrict litigation court judge did not err in consolidating four pelvic mesh cases for a bellwether trial and in excluding the so-called 510(k) defense raised by defendant Boston Scientific Corp. (BSC) (Amal Eghnayem, et al. v. Boston Scientific Corporation, No. 16-11818, 11th Cir., 2017 U.S. App. LEXIS 20432).

PLAVIX: See Mass Tort Nexus Briefcase Re: PLAVIX MDL 2418 USDC NEW JERSEY

>Plaintiff Loses Plavix Case on Summary Judgment Over Late “Learned Intermediary” Declaration

TRENTON, N.J. — The judge overseeing the Plavix multidistrict litigation on Oct. 26 granted summary judgment in a case after ruling that the plaintiff’s “eleventh hour” declaration by one treating physician did not overcome California’s learned intermediary defense for defendants Bristol-Myers Squibb Co. (BMS) and Sanofi-Aventis U.S. Inc. (In Re:  Plavix Products Liability Litigation, MDL Docket No. 2418, No. 13-4518, D. N.J., 2017 U.S. Dist. LEXIS 177588).

Abilify MDL 2734: Mass Tort Nexus Briefcase Re: Abilify MDL 2734

 >Abilify MDL Judge Orders Defendants To Name Settlement Counsel

PENSACOLA, Fla. — The Florida federal judge overseeing the Abilify multidistrict litigation on Oct. 25 ordered the defendants to engage settlement counsel for monthly settlement conferences (In Re:  Abilify [Aripiprazole] Products Liability Litigation, MDL Docket No. 2734, No. 16-md-2734, N.D. Fla., Pensacola Div.).

Mirena IUD: Related-Federal Court Reopens Mirena IUD Product Liability MDL Nov 3, 2016

>2nd Circuit Affirms Exclusion Of Mirena MDL Experts, Termination Of Litigation

NEW YORK — The Second Circuit U.S. Court of Appeals on Oct. 24 affirmed the exclusion of general causation experts in the Mirena multidistrict litigation and a court order terminating the MDL before any trials were held (In Re:  Mirena IUD Products Liability Litigation, Mirena MDL Plaintiffs v. Bayer HealthCare Pharmaceuticals, Inc., Nos. 16-2890 and 16-3012, 2nd Cir., 2017 U.S. App. LEXIS 20875).

Hip ImplantsSee Mass Tort Nexus Briefcase Re: Wright Medical, Inc. MDL 2329 Conserve Hip Implant Litigation

>Wright Medical Settles Remaining Wright Hip Cases; Judge Closes MDL 2329

ATLANTA — Wright Medical Technology Inc. and plaintiffs in a multidistrict litigation have entered two additional agreements settling the remainder of the litigation, a Georgia federal judge said Oct. 18 (In Re:  Wright Medical Technology, Inc., Conserve Hip Implant Products Liability, MDL Docket No. 2329, No. 12-md-2329, N.D. Ga., Atlanta Div

Testosterone Replacement Therapy: See Mass Tort Nexus Briefcase Re: TESTOSTERONE MDL 2545 (AndroGel)

>Testosterone Bellwether Out and Pre-emption Denied

CHICAGO — An Illinois multidistrict litigation judge on Oct. 23 granted summary judgment in one of two testosterone replacement therapy bellwether cases but denied preemption in the second case (In Re:  Testosterone Replacement Therapy Litigation, MDL Docket No. 2545, No. 14-1748, N.D. Ill., Eastern Div., 2017 U.S. Dist. LEXIS 176522).

 

>AbbVie, AndroGel Plaintiff Spar Over Mixed Verdict In 1st Bellwether Trial Verdict

CHICAGO — AbbVie on Oct. 25 urged the judge overseeing the testosterone replacement therapy multidistrict litigation to not disturb a bellwether trial verdict where a jury awarded $0 compensatory damages (In Re:  Testosterone Replacement Therapy Products Liability Litigation, MDL Docket No. 2545, No. 14-1748, Jesse Mitchell v. AbbVie, No. 14-9178, N.D. Ill.).

Fosamax MDL 1789: See Mass Tort Nexus Briefcase Re: MDL 1789 Fosamax Products Liability Litigation USDC New Jersey

>Fosamax Femur Plaintiffs Urge Supreme Court To Deny Preemption Review

WASHINGTON, D.C. — Counsel for more than 500 Fosamax femur fracture plaintiffs on Oct. 25 urged the U.S. Supreme Court to deny certiorari to Merck Sharp & Dohme Corp., arguing that their claims are not preempted by “clear evidence” that the Food and Drug Administration would have rejected stronger warnings for the osteoporosis drug (Merck Sharpe & Dohme Corp. v. Doris Albrecht, et al., No. 17-290, U.S. Sup., 2017 U.S. S. Ct. Briefs LEXIS 4064

 

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Insys Therapeutics, Inc. Founder and Billionaire John Kapoor, Indicted For Bribing Doctors to Prescribe Fentanyl

Is this the start of indictments against senior executives at Big Pharma opioid manufacturers”

By Mark A. York (October 27, 2017)

(Mass Tort Nexus)

The founder of Insys Therapeutics, Inc., Johnathon N. Kapoor was arrested Thursday October 26, 2017 and charged with leading a massive conspiracy across the United States to pay bribes and use fraudulent sales methods in the illegal distribution of Subsys, a fentanyl spray intended for cancer patients. The Insys boardroom orchestrated an “off label” marketing campaign of “Subsys” which is a fast-acting sublingual fentanyl product, resulting in indictments against all members of the pre-2017 Insys executive board, as well as mid level managers and sales representatives across the country.

 

 

 

 

 

 

 

 

Dr. John N. Kapoor, 74, of Phoenix, Arizona, the former Chairman-CEO of Insys and still a member of its board, was indicted on federal charges of racketeering, conspiracy to commit fraud and conspiracy to violate the Anti-Kickback law. The racketeering and fraud charges carry prison sentences of up to 20 years, while the kickback charge can bring up to five years as well as millions of dollars in fines and asset forfeitures

Prosecutors allege the company paid hundreds of thousands of dollars to doctors in exchange for prescribing a sublingual spray called Subsys that contained the powerful and synthetic opioid fentanyl which is highly addictive. Three top prescribers have already been convicted of taking bribes from Insys, along with several sales and marketing representatives having entered plea deals in federal courts across the country.

In various media reports, former sales rep Patty Nixon, turned whistleblower, explained how the company lured doctors into prescribing the drug for patients who didn’t need it, known as “off-label” marketing. She stated “It was absolutely genius, it was wrong, but it was genius.”

“What I did, I was instructed to do, I was trained to do,” Nixon, who was fired by Insys after becoming adverse to the company sales activity, “she felt guilty about lying on the job” and decided to not return to work. “It was wrong, but it was genius.”

In a statement related to the Kapoor indictment, Nixon said, “I wasn’t sure this day would ever come. It is a great day for justice. A great day for the victims. Dr. Kapoor is an evil man. I give a lot of credit to all the prosecutors and all the people who worked on bringing him to justice. It’s what needs to be done.”

She said that if requested to testify against Kapoor, “I absolutely will.”

 

 

 

 

 

 

 

 

Subsys is 100 times stronger than morphine, and was approved by the FDA to treat patients with cancer who had “breakthrough” pain, that is pain which other narcotics are not addressing. This was soon seen as not the way Insys Therapeutics wanted to market Subsys and they developed a very direct and highly profitable marketing campaign that placed “profits over patients” and contributed to the current opioid crisis across the USA.  They Insys executive suite quickly ramped up a sales and marketing campaign that reached from Alabama to Alaska, two states where the Subsys sales skyrocketed, all based on the company sales efforts

The role of the sales staff was to make sure Subsys got into the hands of as many patients as possible, whether they had cancer or not, and this included using illegal and unethical methods of getting doctors to write massive numbers of Subsys prescriptions for questionable pain complaints.

Related: By Mass Tort Nexus- “THE OPIOID CRISIS IN AMERICA” – How Insys Theraputics, Inc. Sold Stock And Killed Americans At The Same Time With The Help Of Doctors

THE REIMBURSEMENT UNIT FRAUD

“My job responsibilities were to contact insurance companies on behalf of the patients and the doctors to get the medication approved and paid for by their insurance company,” along with several others.

Subsys is not cheap prescription, a 30-day supply costs anywhere from $3,000 to $30,000 and the fraudulent scheme depended upon insurance approval.That was Nixon’s job, along with the other employees in the Reimbursement Unit, who were tasked with the role of misleading insurers into believing the drug was “medically necessary.”

“I would say, ‘Hi, this is Patty. I’m calling from Dr. Smith’s office. I’m calling to request prior authorization for a medication called Subsys,” taken form the Unit’s management created insurance approval script.

The Unit staff would often pretend they were calling from the office of a cancer doctor to increase the chances of approval, as well as using specific diagnosis codes, likely to be approved, whether the patient had the condition or not.

The Reimbursement Unit role at Insys, was making sure that patients got approval for Subsys, which includes fentanyl, from insurance companies. “The unit job responsibilities were to contact insurance companies on behalf of the patients and the doctors to get the medication approved and paid for by their insurance company,” said Patty Nixon.

“We told complete bold-faced lies” as part of the part of the ongoing fraudulent Insys business model.

CHRONIC PAIN LEADS TO DEATH

One of the patient who was prescribed Subsys was Sarah Fuller, who was prescribed the drug even though she didn’t have cancer. In her case, it was chronic neck and back pain from two car accidents. And when her doctor prescribed Subsys, an Insys sales rep was sitting in the room with them.  Within a month, Fuller’s prescription was tripled. And 14 months after she started using the drug, she was found dead on a bedroom floor.

What killed her? “Well, technically fentanyl,” Fuller’s mother said. “But a drug company who couldn’t care less about a human life. And, apparently, a doctor who didn’t either.” Sarah’s Cherry Hill, New Jersey physician, Dr. Vivienne Matalon, had her medical license suspended over the “off-label” prescribing that resulted in the death of Sarah Fuller, but denies responsibility for her death.

Sadly, Fuller is not alone, FDA reports of adverse events and possible related complications include hundreds of deaths.

Attorney Richard Hollawell who represents the Fuller’s family, is suing everyone involved in marketing and prescribing Subsys to Sarah, and said, “This is serious stuff that we’re dealing with … People need to finally be held accountable.”

Insys has denied any responsibility and insists it shouldn’t be blamed for how doctors prescribe their products. The corporation is not currently facing criminal charges and is still selling Subsys — some $240 million worth of Subsys just last year. But the company is under investigation by various states across the country regarding how the “off-label” marketing campaign came to be the company business model..

KAPOOR ADDED TO PRIOR INSYS INDICTMENTS

Dr. Kapoor will appear in federal court in Phoenix Thursday, and will have to appear in federal court in Boston, where the indictments originated, at a later date. The indictment, unsealed today in Boston, also includes additional allegations against several former Insys executives and managers who were initially indicted in December 2016.

“In the midst of a nationwide opioid epidemic that has reached crisis proportions, Mr. Kapoor and his company stand accused of bribing doctors to overprescribe a potent opioid and committing fraud on insurance companies solely for profit,” said Acting United States Attorney William D. Weinreb of Massachusetts. “Today’s arrest and charges reflect our ongoing efforts to attack the opioid crisis from all angles. We must hold the industry and its leadership accountable.”

Subsys, a fentanyl sublingual spray from Insys Therapeutics

“As alleged, these executives created a corporate culture at Insys that utilized deception and bribery as an acceptable business practice, deceiving patients, and conspiring with doctors and insurers,” said Harold H. Shaw, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division. “The allegations of selling a highly addictive opioid cancer pain drug to patients who did not have cancer, make them no better than street-level drug dealers.”

Brian Kelly, a lawyer for Kapoor, said, “My client is innocent and he intends to fight these charges vigorously.”

In response to an early 2017 investigation, Insys stated that charges against individuals discussed in the media related to “previously disclosed investigations and litigation and  Insys continues to cooperate with all relevant authorities in its ongoing investigations, including our federal investigation which began in and around December 2013.”

“We are committed to complying with laws and regulations that govern the promotion of our products and all other business practices. We continue to emphasize ethical behavior within our organization and pursue opportunities to illustrate that our company’s mission is to put patients first.”

The October 26, 2017 indictments were the first naming John Kapoor, but also include enhanced charges against the entire executive board of Insys Therapeutics, Inc. who were already facing long prison sentences and financial penalties in one of the most far reaching and aggressive US Department of Justice investigations into the root cause of the “Opioid Crisis” that is gripping all areas of the United States.

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