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AHLA: Recent Federal Law Enforcement Efforts to Combat Opioid Crisis

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at February 15, 2017

We are proud to be a member of the American Health Lawyers Association (AHLA) and to serve on the leadership committee of the AHLA’s Behavioral Health Task Force. AHLA continues to provide leadership and guidance to healthcare lawyers across the nation, as well as serve as a clearinghouse of timely information relevant to its membership and all healthcare providers.

Yesterday, AHLA issued an update on “Recent Federal Law Enforcement Efforts to Combat Opioid Crisis”:

The opioid crisis that has claimed so many lives in this country shows no sign of abating. Seventy-eight people die each day from an opioid-related overdose in America, and drug overdoses have overtaken automobile crashes as the leading cause of injury-related deaths in the U.S.1 The U.S. Department of Justice (DOJ) continues to investigate all facets of the opioid distribution chain, resulting in a number of prosecutions in the last few months against health care professionals, hospitals, and other entities, for a wide range of violations.

Since December, the DOJ has reported a number of opioid-related criminal prosecutions. For example:

  • A Philadelphia-based physician was convicted of drug distribution and health care fraud, among other crimes, for prescribing large amounts of oxycodone and methadone to drug addicts and dealers after providing cursory medical examinations and little medical care. The physician also fraudulently billed insurers for visits that occurred while he was out of the country;2
  • A New York-based physician was arrested and charged with illegal drug distribution for prescribing nearly 2.4 million oxycodone pills with a street value of at least $48 million. According to the complaint, the physician prescribed large quantities of oxycodone after seeing patients in group settings and performing perfunctory medical examinations with little or no conversation;3
  • A Massachusetts nurse pleaded guilty to tampering after stealing painkillers from the nursing home where she worked. The nurse used a syringe to extract morphine from emergency narcotic kits maintained by her employer, replacing the vials with saline;4
  • A Long Island physician’s assistant who operated two urgent care clinics was sentenced to five years’ imprisonment for writing phony oxycodone prescriptions in exchange for cash;5
  • Six individuals from Insys Therapeutics, Inc., were indicted for operating a “nationwide conspiracy to bribe medical practitioners to unnecessarily prescribe a fentanyl-based pain medication and defraud healthcare insurers.” According to the indictment, Insys paid “speaker” fees to physicians to induce prescriptions of the product, which was approved for patients experiencing breakthrough cancer pain. The indictment also alleges that Insys executives defrauded insurance companies by falsifying prior authorizations for off-label uses of the product;6
  • Finally, two brothers who owned a Los Angeles pharmacy were convicted of drug trafficking and other crimes in connection with a scheme to illegally sell oxycodone, hydromorphone, and hydrocodone in bulk to customers around the country.7

Prosecutors have also recently settled a number of high-profile civil cases related to opioid distribution. For instance:

  • The DOJ announced a $150 million settlement with McKesson Corporation, one of the nation’s largest pharmaceutical distributors. The DOJ alleged that, between 2008 and 2013, McKesson failed to detect and report “suspicious orders” for controlled substances, including oxycodone and hydrocodone pills, that were distributed to McKesson’s independent and small-chain pharmacies. McKesson had previously paid a civil penalty and designed a compliance program related to similar allegations, but, according to the DOJ, McKesson failed to adhere to that program. McKesson agreed to suspend sales of controlled substances from distribution centers in four states for multiple years, implement enhanced compliance terms, and engage an independent monitor to assess compliance;8
  • The DOJ announced an $11.75 million settlement with Costco Wholesale related to the practices of certain pharmacies. The DOJ alleged that Costco’s practices violated the Controlled Substances Act by filling prescriptions for practitioners who (1) did not have valid Drug Enforcement Administration (DEA) numbers and (2) prescribed outside the scope of their DEA registration. The DOJ also alleged that Costco failed to maintain accurate prescription dispensing records. Costco agreed to implement a number of new compliance measures, including purchasing a new $127 million pharmacy management system and initiating an enhanced audit program;9
  • Finally, a Pennsylvania hospital agreed to pay $510,000 for practices that allowed an in-house pharmacist to steal more than 35,000 pills, including oxycodone. In 2015, the pharmacist pleaded guilty to drug charges and was sentenced to six years’ incarceration. A government audit disclosed that the hospital had substantial discrepancies in its pill count, missing or incomplete medication inventories, and altered or missing drug records. The hospital agreed to implement enhanced compliance measures.10

In September 2016, the DOJ devoted its entire United States Attorney’s Bulletin to combatting opioid abuse.11 Thus, the DOJ’s efforts to aggressively target practitioners and entities contributing to opioid abuse will likely accelerate in 2017. AHLA is recommending that health care professionals, hospitals, and other health care entities make it a priority to audit pharmacy related policies and procedures to ensure adequate checks and balances are in place to quickly detect fraud and abuse related to opioids and other medications. AHLA further recommended that health care entities implement opioid prescribing guidelines to promote responsible prescribing and train providers accordingly. Finally, health care entities should adopt opioid abuse prevention practices such as providing community education and offering more access to treatment.


1 “Addressing the Opioid and Heroin Crisis,” United States Attorney’s Bulletin, Vol. 16, No. 5 (Sept. 2016), https://www.hhs.gov/sites/default/files/Factsheet-opioids-061516.pdf.
2 https://www.justice.gov/usao-edpa/pr/doctor-found-guilty-drug-distribution-and-causing-death-patient
3 https://www.justice.gov/usao-sdny/pr/doctor-charged-manhattan-federal-court-illegal-distribution-millions-oxycodone-pills
4 https://www.justice.gov/usao-ma/pr/worcester-nurse-pleads-guilty-drug-tampering
5 https://www.justice.gov/usao-edny/pr/riverhead-physician-assistant-sentenced-five-years-prison-conspiring-illegally
6 https://www.justice.gov/usao-ma/pr/pharmaceutical-executives-charged-racketeering-scheme
7 https://www.justice.gov/usao-cdca/pr/owners-west-la-pharmacy-found-guilty-sweeping-scheme-illegally-distribute-prescription
8 https://www.justice.gov/opa/pr/mckesson-agrees-pay-record-150-million-settlement-failure-report-suspicious-orders
9 https://www.justice.gov/opa/pr/costco-wholesale-pay-1175-million-settle-allegations-lax-pharmacy-controls
10 http://www.pharmacytimes.com/news/hospital-fined-510000-after-pharmacists-illicit-prescription-drug-diversion
11 “Addressing the Opioid and Heroin Crisis,” United States Attorney’s Bulletin, Vol. 16, No. 5 (September 2016), https://www.justice.gov/usao/file/895091/download.

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