The root cause of the US opioid epidemic was made visible on television two Sundays ago. Did you see it? I’m referring to the 60 Minutes/Washington Post expose called “The Whistleblower” that aired on Sunday, October 15. But if you watched that episode with the volume up, odds are you missed the root cause. Let me explain.
The whistleblower, as characterized by 60 Minutes correspondent Bill Whitaker and Producer Ira Rosen, is Joe Rannazzisi, “…one of the most important whistleblowers ever interviewed by 60 Minutes.” Mr. Rannazzisi formerly ran the US Drug Enforcement Agency’s (DEA’s) Office of Diversion Control, “…the division that regulates and investigates the pharmaceutical industry.” In a joint investigation between 60 Minutes and the Washington Post “…Rannazzisi tells the inside story of how, he says, the opioid crisis was allowed to spread, aided by Congress, lobbyists, and a drug distribution industry that shipped, almost unchecked, hundreds of millions of pills to rogue pharmacies and pain clinics, providing the rocket fuel for a crisis that, over the last two decades, has claimed 200,000 lives.”
According to Mr. Rannazzisi, “This is an industry that is out of control. What they want to do, is do what they want to do, and not worry about what the law is. And if they don’t follow the law, in drug supply, people die. That’s just it, people die.” Mr. Rannazzisi “…accuses the drug distributors of fueling the opioid epidemic by turning a blind eye to pain pills being diverted to illicit use.”
During the interview Mr. Rannazzisi said, “This is an industry that allowed millions and millions of drugs to go into bad pharmacies and doctors’ offices that distributed them out to people who had no legitimate need for those drugs.”
He’s talking about our old friends, the “Big-3” wholesale distributors. Normally, I stick close to topics of serialization and traceability technology, standards and regulatory compliance in RxTrace, but because I have some experience and some knowledge about how the pharma supply chain operates (I worked at Cardinal Health for about 8 years, departing in 2012), I was appalled at how poorly 60 Minutes and the Washington Post had investigated this issue. You can probably blame the wholesale distributors and their industry associations for not being willing to defend themselves, but 60 Minutes and the Washington Post failed to get the story right. By assuming Mr. Rannazzisi was properly characterizing the laws, regulation and the intention of the wholesale distributors, they missed the real story and propagated an inaccurate one.
Correspondent Whitaker: “Joe Rannazzisi told us, prosecuting crooked doctors and pharmacists wasn’t stemming the epidemic. So he decided to move up the food chain.”
Mr. Rannazzisi: “There had to be a chokepoint, and the chokepoint was the distributors.”
“…This was all new to us. We weren’t seeing just some security violations and a few bad orders. We were seeing hundreds of bad orders that involved millions and millions of tablets. That’s when we started going after the distributors.”
Correspondent Whitaker: “A distributor’s representative told us, the problem is not distributors, but doctors who overprescribe pain medication. But the distributors know exactly how many pills go to every drug store they supply, and they are required under the Controlled Substances Act to report and stop what the DEA calls ‘suspicious orders’, such as unusually large or frequent shipments of opioids. But DEA investigators say many distributors ignored that requirement.”
60 Minutes interviewed several investigators who worked under Mr. Rannazzisi who “…saw distributors shipping thousands of suspicious orders. One example, a pharmacy in Kermit, West Virginia, a town of just 392 people, ordered nine million hydrocodone pills over two years.”
Investigator: “All we were looking for is a good faith effort by these companies to do the right thing, and there was no good faith effort. Greed always trumped compliance, it did every time…”
Correspondent Whitaker: “These companies are a big reason for this epidemic.”
Investigator: “Yeah, absolutely they are. And I can tell you with 100 percent accuracy that we were in there on multiple occasions, trying to get them to change their behavior, and they just flat out ignored us.”
The segment points out that “[o]ver the last seven years distributors fines have totaled more than $341 Million” for filling hundreds of suspicious orders—millions of pills. “The companies cried ‘foul’ and complained to Congress that DEA regulations were vague, and agency was treating them like a foreign drug cartel.”
Long story short, Congress passed a law through unanimous consent that eliminates the ability of the DEA to shut down all controlled drug shipments from any distribution center that the DEA believes has not stopped shipping suspicious orders.
You need to watch this segment because I’m not going to quote the whole thing here. When you do, pay close attention to comments by former DEA investigator Jim Geldof who relates a story about his investigation “…into one mid-sized distributor that had shipped more than 28 Million pain pills to pharmacies in West Virginia over five years. About 11 million of those pills wound up in Mingo county, population 25,000.” Notice that the 60 Minutes segment started out talking about the “Big 3” wholesale distributors, but now that they’re getting specific, they’ve quietly slipped into talking about a “mid-sized distributor”. Because the “Big 3” distribute 85-90% of opioids in the country, a “mid-sized” wholesale distributor is going to be very small compared to them. You must not assume a “mid-sized” distributor is acting the same way any of the “Big 3” would act in any situation, especially this one.
60 Minutes has done this before in an area where I have some knowledge. In a June 2011 segment about “the fight against counterfeit drugs” (see “Illegitimate Drugs In The U.S. Supply Chain: Needle In A Haystack”), they shifted back and forth so quickly between the legitimate US pharma supply chain and illegitimate drug sales over the internet, without identifying when they were making the switch, you were left with the alarming sense that the drugs you get from your local pharmacy have a high likelihood of being counterfeit. That’s not true, but 60 Minutes did not explain that clearly. The way they constructed their story, only someone with intimate knowledge of the problem could tell which of the statements they made were about the legitimate supply chain and which were about illegal imports bought by individuals over the internet and shipped through the mail. These are two completely different supply chains, and two completely different stories mashed by 60 Minutes into one big misrepresentation.
A FEW FACTS ABOUT PHARMACEUTICAL DISTRIBUTION IN THE US
Mr. Rennazzisi says that this is an industry that is out of control. Let’s see about that. Drug distributors are licensed and regulated by each state board of pharmacy. There are federal regulations for lots of things too, including the Drug Supply Chain Security Act (DSCSA) and those from the US Drug Enforcement Agency (DEA) which regulates controlled substances. The DEA is part of the Justice Department, unlike the FDA which falls under Health and Human Services (HHS).
Under the Controlled Substances Act (CSA), legitimate drug wholesale distributors are only able to sell “Schedule II” drugs (which is the class that opioids fall under) to customers who are licensed by the DEA. State laws also require those customers to hold a state license issued by the Board of Pharmacy in that state. The DEA must be notified directly of every shipment of schedule II drugs to any location. Starting in 2005, the larger wholesale distributors switched from paper notifications to electronic notifications. These are typically sent on a daily basis to the DEA. The DEA knows about every shipment to and from every wholesale distributor in the United States every day. This disputes the comment in the 60 Minutes segment that this industry shipped opioids “almost unchecked” to anyone.
Counter to the comment in the 60 Minutes segment, no wholesale distributor knows exactly how many pills go to every drug store they supply. Yes, they know exactly how many pills they supply, but any pharmacy or clinic is free to buy a “normal” quantity from dozens of wholesale distributors, and the view each one of them would have is that they bought a “normal” amount. They would have no idea how many pills that customer bought from others. Only the DEA knows that the total amount purchased by that one pharmacy or clinic would exceed the “normal” amount by dozens of times, because they receive all of the notices. And the DEA does not share that knowledge with anyone.
WHO AUTHORIZES THESE CRIMINALS TO OPERATE ANYWAY?
And what about those “rogue pharmacies and pain clinics” referred to in the 60 Minutes piece? Who are these bad people who “…distributed [opioids] out to people who had no legitimate need for those drugs.” The ones that the wholesale distributors shipped hundreds of millions of pills to “almost unchecked”, and which provided “…the rocket fuel for a crisis that, over the last two decades, has claimed 200,000 lives”? Those “rogue pharmacies and pain clinics” are pharmacies and pain clinics that the DEA and the state Board of Pharmacy have each provided a license, which allows them to legitimately order reasonable quantities of controlled substances. If the DEA knows they are rogue or bad, based on the knowledge that only they have, why don’t they pull their licenses and then inform the Board of Pharmacy so they can pull their licenses too? If that were to happen, any wholesale distributor who continues shipping controlled substances to those locations would be committing a crime, and their DEA licenses could be pulled. That would stop the opioid crises overnight. Why doesn’t that happen?
The 60 Minutes piece only hints at the reason very briefly. Did you catch it? The hint was when Correspondent Whitaker said, “Joe Rannazzisi told us, prosecuting crooked doctors and pharmacists wasn’t stemming the epidemic. So he decided to move up the food chain.” This is the classic move that every cop show from the 1980’s made. When you can’t stop cocaine from flooding the streets by prosecuting the mules who deliver it, they always “moved up the food chain” to get to the “kingpin”. The difference is, when it’s cocaine, everyone in the supply chain is a criminal by definition. In the legitimate supply chain, only those “crooked” or “bad” doctors and pharmacists are criminals. The companies they buy from are no more criminal than the DEA is for no longer going after those “crooked doctors and pharmacists”.
The truth is, it’s hard to prosecute a doctor or clinic for supplying excessive quantities of painkillers. And it takes a long time. One prosecution can take years, but by the count of pills flooding the streets documented in the 60 Minutes piece, there are lots of bad doctors and clinics out there—too many to stop through the courts. So why not pull the licenses of doctors and clinics suspected of being “bad”, and let them sue the Agency to get them back if they can prove legitimacy? After all, these are the criminals.
If the DEA finds a wholesale distributor who is not following the law, they should charge and prosecute them. Instead, the law used to allow the DEA to shut down a company’s ability to ship all controlled substances based on their finding of a single instance of excessive supply. What’s excessive? They can’t tell you. You’re supposed to know what’s excessive, and it differs from pharmacy to pharmacy and doctor to doctor.
Who could operate under such arbitrary criteria? So in the late 2000’s, the Big 3 wholesale distributors invested in third-party “Suspicious Order Monitoring” (SOM) software to help them watch for any order that might be “excessive”. This is not what a company does if they are “turning a blind eye to pain pills being diverted to illicit use”, and it demonstrates a desire to follow the law.
The problem is, SOM software must be constantly fed updated information about every pharmacy and clinic, so it can properly adjust the quantity of controlled substances that should be appropriate for that specific customer. If that data is not kept fresh every day, for every customer, an “excessive” shipment might be approved, which can result in a DEA violation.
As you can imagine, this method of enforcement long-ago led to an adversarial relationship between the DEA and the legitimate wholesale distributors. In the 60 Minutes segment, Mr. Rannazzisi and his investigators clearly expressed nothing but contempt for these companies. “All we were looking for is a good faith effort by these companies to do the right thing, and there was no good faith effort. Greed always trumped compliance, it did every time…” Statements like that are counter to my experience. The Big 3 wholesale distributors are publicly held companies and the people who work there are interested in working closely with the DEA to help stop the flow of harmful drugs to criminals. There is an overwhelming amount of good will at these companies, but good will is a two way street.
The new law that the 60 Minutes segment alluded to passed last year. My understanding is it removes or limits the ability of the DEA to pull a wholesale distributor’s license—which shuts down their ability to ship all controlled substances—when a single excessive shipment is uncovered. My hope is that this new approach—forced on the DEA, and which, apparently resulted in the departure of Mr. Rannazzisi and his investigators—will lead to better cooperation between the DEA and the legitimate wholesale distributors to stem the flow of painkillers to actual rogue doctors and clinics, while maintaining the flow to legitimate doctors and pain clinics (something that always gets forgotten in these debates). And that’s what I think it is designed to do.
60 Minutes and the Washington Post allowed Mr. Rannazzisi to mis-characterize the opioid problem our country is facing by showing us the way he saw it when he led the DEA’s Department of Diversion Control. The real story is Mr. Rannazzisi’s mishandling of his enforcement duties while in office, by focusing so much of his attention on non-criminal wholesale distributors rather than the real criminals, those bad doctors and rogue clinics who were doing all the illegitimate prescribing. Focusing his limited enforcement resources in the wrong place left the real problem unchecked. And that is what has led to the exponential rise in the opioid problem over the last ten years.
When I watched this 60 Minutes segment, I saw the real cause of our opioid crisis. Did you?