Tuesday, April 23, 2019

Drug Dealing

Laurence Doud III, the retired CEO of the Rochester Drug Co-Operative, operated in the fringes of the drug business turned his small New York firm into a supplier of last resort for independent pharmacies whose dubious practices got them cut off by other distributors.

In pursuit of bigger profits for the company and fatter bonuses for himself, Doud encouraged his sales force to sign up new customers with no questions asked, picking up competitors’ rejects. Doud’s compensation — fueled by performance-related bonuses — increased by over 125%, to more than $1.5 million in 2016

According to the indictment, Doud and other top Rochester executives “made the deliberate decision” not to investigate, monitor or alert federal regulators about pharmacy customers they knew were providing opioids to people who wanted them for non-medical uses.

When Rochester’s largest customer went from buying 70,000 units of oxycodone per month in October 2012 to more than 200,000 units per month a year later, Doud had its back — overruling his own compliance officers and ordering that the pills keep flowing because it was a “big account,”.

U.S. Attorney Geoffrey Berman said, "Executives of a pharmaceutical distributor and the distributor itself have been charged with drug trafficking — trafficking the same drugs that are fueling the opioid epidemic that is ravaging this country.”

From 2012 to 2016, Rochester’s sales of oxycodone tablets skyrocketed from 4.7 million to 42.2 million — an increase of about 800% — and its fentanyl sales soared from approximately 63,000 dosages in 2012 to more than 1.3 million in 2016 — an increase of about 2,000%. During the same period, the company’s internal compliance office flagged 8,300 orders but reported just four to the U.S. Drug Enforcement Administration. An internal alert system flagged about 7,800 orders that exceeded a monthly purchase threshold, but the company still filled most of them without contacting the pharmacy or reporting the activity to the DEA. Instead, the company raised purchase limits for certain high-volume customers so they could continue purchasing without triggering another alert.

Other companies and executives have faced lawsuits from a growing list of state and local governments looking to hold them accountable for an epidemic that led to more than 70,000 deaths in 2017.


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