TN AG estimated damage caused by opioid distributor to be in ‘hundreds of millions’

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KNOXVILLE, Tenn. (WATE) – A seven-page memorandum, filed in Knox County Circuit Court, provides a closer look at the argument Tennessee Attorney General Herbert Slatery III has formed against AmerisourceBergen Drug Corporation in a civil lawsuit.

The full 230-page complaint, filed Monday, is still sealed in Knox County Circuit Court but could be publicly available as soon as next week.

The lawsuit alleges Amerisource violated the Tennessee Consumer Protection Act as well as the Tennessee Racketeer Influenced and Corrupt Organizations Act.

One of the most straightforward and damning allegations inside the memorandum, pulled from the summary of the state’s complaint, are the words, “Amerisource knowingly participated in the diversion of opioids in Tennessee by continuing to supply pharmacy customers with opioids even after it knew, often from firsthand accounts, that diversion was occurring from or in those pharmacies.”

According to the state’s investigation, Amerisource distributed 8,555,800 immediate-release oxycodone 30 mg pills to Food City No. 674, 5941 Kingston Pike, in Bearden from 2006 to 2012.

It also notes on Nov. 2, 2010, Amerisource shipped 168,000 oxycodone immediate-release 30 mg pills to Food City No. 674, an amount almost equal to Knoxville’s population on that one day.

“We believe the company actively subverted and exploited its unique position in the opioid supply chain and its market power to maximize profits,” General Slatery said.

Below are some of the assertions made by the state, against Amerisource, in the memorandum:

  • Oversupplying Tennessee pharmacies with opioids at astounding rates,
  • Ignoring multiple red flags for abuse and diversion from suspect pharmacies
  • Knowingly supplying two major and clearly defined hot spots for diversion of oxycodone and buprenorphrine, without naloxone, in the Knoxville-area and Tri-Cities-area
  • Seeking business from select independent pharmacies that it knew were more likely to be sources of opioid diversion and suspicious orders
  • Helping suspect pharmacies avoid detection by the DEA, and making this a selling point for customer growth and retention
  • Implementing anti-diversion compliance programs that were designed to minimize the impact on sales of opioids to high volume pharmacies and were also underfunded, fundamentally unsound, applied inconsistently, or completely ignored
  • Neglecting to provide cohesive and meaningful training for employees on basic topics related to compliance and anti-diversion measure
  • Making broad exceptions from due diligence investigations for its most lucrative customers
  • Failing to maintain accurate records and due diligence documents for problematic customer pharmacies, despite having reason to believe those pharmacies were involved in diversion
  • Establishing extremely high thresholds for what would trigger a suspicious order review so that it could avoid identifying suspicious orders placed by certain pharmacies
  • Breaking what few protocols were in place and informally assigning different thresholds for different distribution centers based on financial considerations, among many other things.

Our crews also met with General Slatery Tuesday to talk about the case against the drug distributor.

While he said it’s difficult to put a price on the lawsuit or its outcome, he estimated the company has contributed to hundreds of millions of dollars in damages.

“We don’t want them distributing drugs in Tennessee anymore,” he said. “Normal distribution patterns would be fine, but these are so large, they’re so frequent, they’re so beyond the population that needs the opioids that it constitutes a lot of red flags.”

As a distributor, Slatery said, they’re supposed to monitor quantities and orders. If they think anything is suspicious, he said, they’re required by law to report it.

“We’re quite confident that Amerisource, in this instance, knew of the problems. None of this is a surprise to Amerisource,” he said. “They were not just truck drivers. They knew the quantities they were supplying. They knew that there were problems at these specific pharmacies and they continued to supply them. They supplied them beyond amounts they were authorized, even under their own policies, to provide. But, these were revenue sources for them. They continued to do this over a long period of time, and as a result Tennessee has one of the worst opioid epidemics in the country.”

KVAT, the company that owns Food City, said in a statement, they’re “…committed to proactively working with experts in drug enforcement and pharmacy best practices to assess and redefine dispensing practices at its more than 100 pharmacies.” Their statement also read the company “has been and remains committed to the safety and health of the communities it proudly serves.”

John Parker, senior vice president of communications for Healthcare Distribution Alliance, sent this statement one day following the filed litigation: “The misuse and abuse of prescription opioids is a complex public health challenge that requires a collaborative and systemic response that engages all stakeholders. It’s also critical to understand the role of each stakeholder across the supply chain. Distributors do not conduct research, manufacture, market, or prescribe medications, nor do they influence prescribing patterns, the demand for specific products, or patient-benefit designs. The idea that distributors are responsible for the number of opioid prescriptions written defies common sense and lacks understanding of how the pharmaceutical supply chain actually works and is regulated. Those bringing lawsuits would be better served addressing the root causes, rather than trying to redirect blame through litigation.”


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