US Attorney Geoffrey S. Berman said: "Our Office will do everything in its power to combat this epidemic, from street-level dealers to the executives who illegally distribute drugs from their boardrooms."

By Daniel Herborn


Posted on April 24, 2019

The criminal charges are a first in the ongoing opioid epidemic that has gripped the US. Authorities opened up a new legal avenue to address the crisis when they charged Rochester Drug Cooperative (RDC) on 23 April with conspiring to violate narcotics law, defrauding the US government and wilfully filing false reports.

The legal filings also charged Laurence F. Doud III, the long-time CEO of RDC, and William Pietruszewski (RDC’s former Chief of Compliance) with being behind a scheme to supply oxycodone, fentanyl and other powerfully addictive opioids to pharmacies in the knowledge that people who did not need the painkillers would have access to them. The executives were motivated by the opportunity to gain more sales and increase their salaries, prosecutors said.

The company entered into an agreement and admitted to having knowledge that the opioids it sold would be abused. The agreement is still subject to final approval by the court. Meanwhile, Pietruszewski also entered a guilty plea but Doud pleaded not guilty.

RDC admitted to putting profits ahead of people and worsening the opioid crisis

To avoid prosecution of the company, RDC agreed to a deal that will see it pay a US$20 million fine, consent to being supervised by an independent party for the next five years and comply with relevant laws around controlled substances.

In a statement, US Attorney Geoffrey S. Berman said the prosecution broke new ground in the opioid epidemic.

“Executives of a pharmaceutical distributor and the distributor itself have been charged with drug trafficking, trafficking the same drugs that are fuelling the opioid epidemic that is ravaging this country,” he said. “Our office will do everything in its power to combat this epidemic, from street-level dealers to the executives who illegally distribute drugs from their boardrooms.”

Scale of the US opioid crisis

Drug Enforcement Agency (DEA) Special Agent in Charge Ray Donovan said RDC had failed to heed its responsibility as “gatekeepers of prescription medication”.

“This historic investigation unveiled a criminal element of denial in RDC’s compliance practices, and holds them accountable for their egregious non-compliance according to the law,” Donovan said.

Executives have previously avoided culpability over America’s spiralling rates of opioid abuse and opioid-related deaths, but this prosecution is likely to send shockwaves through the pharmaceutical industry.

A statement from the US Attorney said RDC continued to supply opioids, including oxycodone and fentanyl, to pharmacies even after identifying ‘red flags’ around how they were distributing the drugs. Under Doud’s direction, the statement says, it supplied to pharmacies that had been banned by other pharmaceutical distributors and to customers its own employees deemed “very suspicious”. The complaint also says RDC concealed suspicions about the illegal activity of pharmacies it supplied from the DEA.

Doud was released on a US$500,000 bond. He denied all charges against him and is “being framed” according to his lawyer. He is facing life in jail.

RDC’s sales of oxycodone skyrocketed under Doud’s leadership, leaping from 4.7 million in 2012 to 42.2 million in 2016. Similarly, its fentanyl sales went from around 63,000 doses in 2012 to over 1.3 million in 2016, an increase of approximately 2000%. Doud’s compensation also climbed during this period, reaching more than US$1.5 million by 2016.

Per figures from the National Institute on Drug Abuse, more than 130 people die from opioids overdoses every day. The Centers for Disease Control and Prevention has calculated that the total “economic burden” of prescription opioid abuse, including healthcare, treatment, lost productivity and intervention from the criminal justice system, is a staggering US$78.5 billion a year.

Header image credit: U.S. Air Force photo illustration/Tech. Sgt. Mark R. W. Orders-Woempner