Biden Opioid Plan Puts Pharmacies On Notice

Law360 (November 8, 2020, 5:16 PM EST) -- President-elect Joe Biden will enter office with a plan to curb the nation's opioid crisis by increasing federal investigations into distributors of the drug, signaling that smaller companies should be aware that it's not just big businesses that can become the focus of federal prosecutors.

Biden delivered a victory speech in Delaware on Saturday night after projected wins in Pennsylvania and Nevada handed him the electoral votes needed to take the presidency. Though President Donald Trump continues to fight in court, Biden is now poised to put into action an opioid plan he announced in March.

Biden's plan would hold pharmaceutical companies, executives and others accountable for contributing to the opioid crisis, which has killed about 450,000 people in the country since 1999 from overdoses, according to the Centers for Disease Control and Prevention.

While larger companies such as Purdue Pharma LP have so far been the subject of U.S. Department of Justice investigations and the target of civil suits, smaller companies should heed the message that no one in the opioid market is safe, said Jodi Avergun, the head of Cadwalader Wickersham & Taft LLP's white collar defense group and a former U.S. Drug Enforcement Administration chief of staff.

"This is a message that no one in the market is safe from these responsibilities ... [and] once opioid cases are settled in the current MDL, all of the scrutiny will not go away from the whole issue," she said. "This is a warning to middle-market companies who might not have been wrapped up in an all-consuming basis in the opioid litigation."

The federal multidistrict litigation consolidated in Ohio contains roughly 3,000 cases filed by cities and counties, as well as Native American tribes, that want money for health care and law enforcement costs related to the opioid epidemic. The suits accuse the opioid manufacturers, distributors and pharmacy chains of feeding the epidemic by downplaying the risks of addiction and failing to monitor suspicious orders.

Under the Trump administration, the DOJ's focus has only been on a relatively small number of participants in the DEA's registry. Conversely, Biden's policy tells government investigators to make sure companies are complying with regulations for monitoring and reporting suspicious orders of opioids, Avergun said.

"The next wave of enforcement actions is going to be who else is there beside the primary [manufacturers], distributors and pharmacy chains," she said.

Product liability attorney and Bradley Arant Boult Cummings LLP partner Jay Stroble pointed out that Biden has said he would instruct his attorney general to support municipalities that have sued oil companies over climate change, so it may be that the DOJ under Biden would become more "activist."

Attorneys also noted that investigations into pharmaceutical companies over their opioid marketing and distribution are popular on both sides of the political divide.

"There's this sense of going after the big pockets and getting these big press releases, sometimes with good reason, looking for a deterrent to try to change behaviors," said Larry Cote of Cote Law PLLC, a former DEA compliance attorney.

During the last months of the Obama administration, the DOJ made a $150 million deal with McKesson Corp. and a $44 million deal with Cardinal Health Inc. for failing to report suspicious opioid orders.

The Trump administration also moved aggressively against opioid companies, making it a top priority in 2017 when Trump declared the opioid crisis a national emergency. Since then, the DOJ has pursued investigations into opioid companies and reached settlements with multiple companies, most recently with Purdue. That October agreement includes the company's guilty plea to three felony counts, $8 billion in financial penalties, and the dissolution of the company and the Sackler family's ownership interests in it.

Still, attorneys questioned the wisdom of pursuing actions against pharmaceutical companies without meaningfully addressing other issues related to the opioid crisis, such as prevention and prescriber education.

"We're living through a time where the drug companies are still the villains," Harry Nelson of Nelson Hardiman LLP said.

The coronavirus pandemic has also caused a surge in opioid overdoses, according to the Overdose Mapping Application Program, which is run by the University of Baltimore. Reports of suspected opioid overdose submissions rose by 18% following lockdown orders in March, according to the program.

"If you look at the numbers, it becomes impossible to avoid the link between all the isolation and despair and trauma of the last six, seven months," Nelson said.

But those overdoses have been largely caused by illicit drugs, including nonprescription fentanyl, according to the American Medical Association. There was also a nearly 40% drop in opioid prescribing between 2017 and 2019.

"The whole problem on a supply-side level is fentanyl, not prescriptions," Nelson said.

Nelson, who authored a book on the opioid crisis and talked to Vice President-elect Kamala Harris' campaign during the primaries about opioids, said that while he saw nothing negative in Biden's plan, there's too narrow a focus on pharmaceutical companies and there should be more of a focus on early intervention and prescriber education.

"I think the pharmaceutical industry has learned its lesson," Nelson said. "And now the crisis has changed. You have patients who are genuinely in pain who aren't getting access to medication."

Biden's plan does call for more education, Cote said, but that's been proposed before and there's always a question of who will fund it: the DEA or the U.S. Food and Drug Administration.

Cote said that distributors could opt to drop out of the opioid market if they decide there's too much risk of investigation, and it's not worth the risk of the cost of running that part of their business.

One marked difference between Trump, whose brother Fred died of alcohol addiction, and Biden is that Biden has been open about his son Hunter's struggles with addiction, saying that he was proud of Hunter during one of the debates, Nelson said.

"His comments ... hold out the hope of somebody who really understands this in a lived way," he said. "So I think that he can help reduce the shame that people feel, that families feel."

--Editing by Adam LoBelia and Breda Lund.

Correction: A previous version of this article misstated the number of opioid deaths in the country. The article also incorrectly identified Jodi Avergun as a former DEA counsel and omitted a word from her quote. The errors have been corrected.

For a reprint of this article, please contact reprints@law360.com.

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