The legal battle over liability for America’s opioid crisis has grown into the most complex litigation since the Big Tobacco cases of the 1990s. Scores of plaintiffs (including state attorneys general, Native American tribes, and hundreds of counties and municipalities) seeking to recoup the overwhelming costs of drug treatment and policing have filed more than 2,500 state and federal lawsuits against opioid manufacturers, drug distributors, and pharmacies.
The National Prescription Opiate Litigation has exposed the devastating human toll of an epidemic responsible for more than 450,000 deaths over the last 20 years. While the plaintiffs weigh a multi-billion-dollar settlement proposal to resolve a majority of the opioid cases, the alarming spike in addiction and fatal overdoses involving benzodiazepines (psychoactive drugs commonly used to treat anxiety) could serve as the basis for future lawsuits and criminal prosecutions against drug companies.
Abuse Rate of 17%
A recent study revealed that more than 17% of the 30.6 million American adults who reported using a benzodiazepine, such as alprazolam (the generic form of Xanax), admitted to misusing the medication. Researchers have also found that long-term benzodiazepine use posed serious health risks, such as cognitive impairment and neurodegenerative disease.
Furthermore, according to the National Institute on Drug Abuse, benzodiazepines are involved in more than 10,000 overdose deaths annually (most often when combined with an opioid)—a five-fold increase since 2002. These statistics are particularly ominous considering the soaring number of prescriptions written for children—more than 300,000 children under the age of five (including 80,000 one-year-olds) were prescribed a benzodiazepine in 2019.
Although, the manufacturers of benzodiazepines have, so far, escaped the same public resentment currently directed at opioid makers, they should expect to be subject to the same level of scrutiny from prosecutors and plaintiffs’ attorneys as the dangers of benzodiazepine addiction come to light.
Federal regulators have intensified their efforts to criminally charge companies that have profited from the illicit opioid market. The most notable prosecutions to date have resulted in convictions of drug manufacturers and executives for fraudulently marketing opioid products and bribing medical practitioners. Additionally, two recent indictments suggest an aggressive new strategy of charging drug distributors and executives with operating as illegal narcotics traffickers.
Two Notable Prosecutions
In April 2019, the U.S. Attorney’s Office for the Southern District of New York charged Rochester Drug Cooperative, one of the nation’s largest drug distributors, and two of its former executives with unlawfully distributing narcotics and conspiring to defraud the DEA by failing to report suspicious orders of its customer pharmacies. Specifically, prosecutors allege the company’s senior management directed its compliance personnel to ignore clear red flags of criminal diversion in more than 8,000 orders over a five-year period.
Pursuant to a deferred prosecution agreement, an independent compliance monitor will oversee the company’s controlled substance monitoring program and due diligence practices for three years. Consequently, the distributor will incur a substantial financial and administrative burden (in addition to a $20 million fine), which includes enhancing its electronic monitoring systems, opening its facility to onsite inspections, overhauling inadequate hiring and training practices, and regularly reporting to federal authorities.
Likewise, last July, prosecutors filed an indictment charging Miami-Luken, a midsize drug distributor based in Cincinnati, and two of its former executives with illegally shipping millions of opioid pills to pharmacies despite repeated warnings from the DEA. The company has since ceased all operations, although the criminal case proceeds in federal court.
Burgeoning Public Health Crisis
As the founding chief of the Prescription Drug Investigation Unit for New York City’s Special Narcotics Prosecutor, I personally witnessed families and communities shattered by the illicit narcotics trade. During my 12-year career as a prosecutor, I worked with state and federal law enforcement agents on many of New York’s landmark prescription drug cases, including the first manslaughter convictions of doctors charged with prescribing fatal quantities of opioids and benzodiazepines to their addicted patients. Our efforts helped bring attention to a burgeoning public health crisis that has finally reached America’s courtrooms.
Prosecutors and plaintiffs’ attorneys have developed a successful blueprint for civil lawsuits and criminal actions against companies operating in the opioid supply chain. In response, benzodiazepine manufacturers should employ third-party consultants to: evaluate the effectiveness of current compliance policies and practices, identify deficiencies, and recommend remedial measures to ensure compliance with the federal Controlled Substances Act.
Companies should also consult with legal counsel if past violations are discovered, or risk facing potential criminal penalties and the crippling financial costs associated with a mandated compliance monitor.
This column does not necessarily reflect the opinion of The Bureau of National Affairs, Inc. or its owners.
Ryan Sakacs is the former chief of the Prescription Drug Investigation Unit with New York City’s Special Narcotics Prosecutor. During his 12-year career as an assistant district attorney, he founded the country’s most prolific prosecutorial unit dedicated to combating the surge in prescription drug diversion, addiction, and fatal overdoses. Sakacs has also served as counsel to the New York State Athletic Commission, where he regulated professional boxing and mixed martial arts events, and as special counsel in the commercial litigation practice with Kasowitz Benson Torres LLP.