Life Science Compliance Update

October 18, 2017

Class Action Suits Over Opioid Epidemic Ramping Up

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A coalition of 41 states' attorneys general have served five major opioid manufacturers with subpoenas seeking information about how these companies marketed and sold prescription opioids. The coalition is also demanding documents and information related to distribution practices from three drug distributors.

The investigative subpoenas and document requests were sent to pharmaceutical manufacturers Endo International, Janssen Pharmaceuticals, Teva Pharmaceutical Industries Ltd./Cephalon Inc. and Allergan. The group also served a supplemental investigative subpoena to Purdue Pharma. Documents were also requested of three major pharmaceutical distributors: AmerisourceBergen, Cardinal Health and McKesson.

Philadelphia-area union workers are joining a wave of litigation against opioid manufacturers after losing eight members to addiction in 11 months. In addition to the Philadelphia Federation of Teachers Health and Welfare Fund, the International Brotherhood of Electrical Workers Local Union 98 (IBEW) said it is preparing to file a lawsuit against pharmaceutical companies that have contributed to the growing opioid crisis. They plan to file in civil court later this week after consulting with other local and national unions interested in joining a class action suit.

"IBEW Local 98 will no longer allow the manufacturers and marketers of these deadly drugs to peddle their poison to our members without facing severe consequences," Local 98 business manager John Dougherty said. "I have seen far too many of our members lose their lives to opioids," Dougherty said. "It's a national epidemic and I believe the only way to get the attention of Big Pharma is to hit them in the wallet."

The fight against opioid manufacturers is also extending to local municipalities, who are waging their own wars against the deadly epidemic. Bensalem Township is bringing claims against several drug companies and their subsidiaries, including Purdue Pharma, Teva Pharmaceuticals, Cephalon, Johnson & Johnson and Endo Pharmaceuticals. Similar litigation is already underway in Oklahoma, Ohio and Mississippi. However, in Philadelphia, construction workers are especially susceptible to injury and, as a result, often turn to opioids for rehabilitation, Dougherty said. But addiction is never far behind.


“They don't want to miss any work time, so they work through injuries, which compounds the pain and leads to the use and abuse of opioids. I'm sick of seeing our members working themselves into an early grave,” he said.

Earlier this year, Local 98 changed its opioid prescription policy to prevent addiction. Members using the union’s health care provider are now limited to five days on any opioid prescription for injury or pain management. Previously, their plan allowed for unlimited prescriptions.

It took the union, which has more than 7,000 members, nearly two years of fighting with insurance providers before a change was made, spokesman Frank Keel said. 

In 2016, 907 people died from overdoses in Philadelphia, more than three times the number of homicides in the city. But officials project as many as 1,200 people could die from opioid-related overdoses this year, with thousands more suffering from non-deadly overdoses, according to Mayor Jim Kenney’s Task Force to Combat the Opioid Epidemic.

In addition, Washington state Attorney General Bob Ferguson and the city of Seattle have filed separate lawsuits against OxyContin maker Purdue Pharma, alleging that the drug maker of contributing to the state’s “opioid epidemic.” The suit accuses Purdue Pharma of “embarking on a massive deceptive marketing campaign and convincing doctors and the public that their drugs are effective for treating chronic pain and have a low risk of addiction, contrary to overwhelming evidence.” The city of Seattle’s suit also names Teva Pharmaceuticals, Janssen Pharmaceuticals, Endo Pharmaceuticals and Allergan.

October 17, 2017

AmerisourceBergen Specialty Group Pleads Guilty to Distributing Misbranded Drugs

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On September 27, 2017, AmerisourceBergen Specialty Group (ABSG), a wholly-owned subsidiary of AmerisourceBergen Corporation, one of the nation’s largest wholesale drug companies, pled guilty to illegally distributing misbranded drugs. ABSG agreed to pay a total of $260 million to resolve criminal liability for its distribution of oncology supportive-care drugs from a facility that was not registered with the Food and Drug Administration (FDA). The guilty plea and sentencing took place before United States District Judge Nina Gershon. 

As set forth in court records, between 2001 and 2014, two of ABSG’s Alabama-based subsidiaries, Medical Initiatives Inc. (MII) and Oncology Supply Company (OSC), prepared millions of syringes that had been pre-filled with oncology supportive care drugs: Aloxi®, Anzemet®, generic versions of granisetron injection, Kytril®, Neupogen® and Procrit®. The syringes were shipped to oncology centers, medical practices, and physicians for administration to immunocompromised cancer patients undergoing chemotherapy treatment in all 50 states.

To prepare pre-filled syringes (PFS), MII removed FDA-approved drug products from their original glass vials and repackaged them into plastic syringes through a process that allowed MII to access and sell excess drug product in the vials, known as “overfill.” As alleged in the Information, however, MII prepared PFS in an unclean, unsterile environment. Accordingly, MII’s process for creating PFS resulted in some PFS that contained particles or foreign matter, which MII employees identified and termed “floaters.” PFS were also at times not of the quality or purity that MII and OSC represented them to be to their customers. 

MII’s business model was to combine the contents of multiple vials in a process known as “pooling.” However, as set forth in the Information, many of the vials used by MII to prepare PFS were designated by the drug manufacturer as “single use” vials, meaning that the manufacturer could not guarantee the sterility of the drug product if the vials were breached. However, in the pooling process, MII’s technicians frequently breached drug vials multiple times, thereby increasing the risk of contamination.

To avoid the FDA’s regulatory oversight, ABSG did not register MII as a re-packager or manufacturer with the FDA as required by the Federal Food, Drug and Cosmetic Act.  Instead, ABSG inaccurately portrayed MII to its customers and to state agencies as a state-regulated pharmacy in the business of dispensing drugs pursuant valid prescriptions. By holding MII out as a pharmacy, ABSG unlawfully exploited an exemption to the FDA registration requirement that is reserved for legitimate pharmacies, not for manufacturers or re-packagers. 

As part of its guilty plea, ABSG has agreed to pay a $208 million criminal fine, plus $52 million in criminal forfeiture, for a total financial penalty of $260 million. In addition, ABSG has entered into an agreement with the Office and the Department of Justice’s Consumer Protection Branch to maintain a compliance and ethics program designed to increase accountability of individuals and corporate board members, to increase transparency, and to strengthen ABSG’s compliance with the FDCA. The compliance and ethics program requires corporate board members to review annually the effectiveness of the company’s compliance program and for ABSG to maintain a hotline that will receive and process complaints about any improper practices.

October 16, 2017

Florida Governor Proposes Limit on Prescribed Opioids

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At the end of September, Florida Governor Rick Scott announced that during the upcoming legislative session, he will propose new legislation – including more than $50 million to next year’s budget – to combat opioid abuse in Florida.

The proposed legislation will include:

  • Placing a three-day limit on prescribed opioids, unless strict conditions are met for a seven-day supply;
  • Requiring all healthcare professionals that prescribe or dispense medication to participate in the Florida Prescription Drug Monitoring Program, a statewide database that monitors controlled substance prescriptions; and 
  • Additional reforms to fight unlicensed pain management clinics, require continuing education courses on responsibly prescribing opioids, and create new opportunities for federal grant funding.

The proposed investment of more than $50 million will include funding for:

  • Substance abuse treatment
  • Counseling and recovery services
  • The Florida Violent Crime and Drug Control Council

In announcing the proposal, Governor Scott released the following statement,

We made a commitment here in Florida to do everything possible to support our communities and fight the national opioid epidemic, and while we have taken major steps to fight this crisis, more must be done. Today, I am proud to announce that I will propose major legislation during the upcoming legislative session and more than $50 million in my recommended budget to combat opioid abuse in our state.

As I travel the state, I have met many families who are dealing with the heartache of drug addiction. Growing up, my own family dealt with the struggle of substance abuse and I know firsthand how this painful issue causes families to worry and pray for help and healing. As states across the country continue to fight this national epidemic, we must make sure Florida is doing our part to help vulnerable individuals and keep our families safe. 

These proposals will make a major impact on limiting the chance of drug addiction, reducing the ability for dangerous drugs to spread in our communities, giving vulnerable Floridians the support they need, and ensuring our hardworking law enforcement officers have the resources to protect Floridians. I look forward to working with President Negron, Speaker Corcoran and the entire Legislature to pass this impactful legislation and major investment. I would also like to thank Attorney General Pam Bondi for her focus on this issue and her commitment to keeping our families safe. We will continue to work closely with our federal, state and local partners throughout this fight.

Attorney General of Florida Pam Bondi stated, “We are in the midst of a national opioid crisis claiming lives in Florida, and we must do everything we can to stop drug abuse and save lives. I want to thank Governor Scott for proposing these legislative initiatives that will help stop addiction before it begins. It will take an all-hands-on-deck strategy, not only in Florida, but nationwide to address this crisis destroying American families.”

Florida Senate President Joe Negron said, “The Senate is committed to working with our partners across the state to combat opioid abuse, and I appreciate Governor Scott’s leadership on this serious issue. The Senate looks forward to working with Governor Scott and our colleagues in the Florida House as we continue to do all we can to protect Florida communities from this national epidemic.”

Florida House of Representatives Speaker Richard Corcoran said, “The State of Florida is fully dedicated to protecting our families and communities from the national opioid epidemic. I look forward to continuing to work together with Governor Scott and my fellow Legislators to ensure our families, healthcare professionals and law enforcement officers have all the resources they need in this fight.”

Florida is the most recent state to discuss the possibility of entering the arena of regulating opioids in response to the opioid epidemic. It is likely that this proposed legislation will become a hot topic during the next legislative session, and we will continue to keep an eye out for state and local legislation that will have an impact on industry

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