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Opioid Trial

A prop being used in the opioid trial gets wheeled into federal court in Charleston on Monday, May 3, 2021.

Emails between McKesson employees showed the drug firm’s directors would sometimes approve 80 pharmacy requests to increase opioid shipment limits per day, all while the U.S. Drug Enforcement Administration in 2008 reported finding 4,600 suspicious order violations within the corporation.

Testimony over the communication was heard Monday at a federal trial born out of Cabell County and Huntington’s accusations that the “Big Three” drug wholesalers — AmerisourceBergen, Cardinal Health and McKesson — fueled the region’s opioid crisis by sending an excessive 127.9 million opiate doses into the region from 2006 to 2014, before a reduction in the pills shipped made users turn to illicit drugs.

The defendants point to the DEA, doctors and West Virginians’ poor health as the culprits.

Monday’s testimony turned the spotlight on McKesson for the first time in the trial’s four weeks and was highlighted by emails that showed its regulatory affairs employees felt they did not have the resources to comply with federal regulations.

Michael Oriente, director of regulatory affairs for McKesson, said he helped implement the controlled substance monitoring program and oversaw suspicious orders. The company has had three types of pill monitoring systems recently.

The first system, Section 55, which was in place as early as 2004, only monitored excessive ordering, he said.

A 2006 letter from the DEA put McKesson on alert that the system did not do enough. It said reporting a suspicious order did not relieve a distributor from investigating suspicious circumstances. A second letter followed in December 2007, and said distributors had the responsibility to report suspicious orders and conduct their own independent analysis of pharmacies.

Plaintiffs said McKesson employees ignored those letters, which led to a 2008 settlement with the DEA in which McKesson agreed to pay $13.25 million in civil penalties to settle allegations that it violated the Controlled Substance Act by failing to report suspicious orders of prescription medications, a duty the DEA had outlined less than a year before.

In meetings during the settlement talks, McKesson leadership was told that more than 4,600 suspicious order violations were found at “multiple” of its 39 distribution centers.

From the 2008 settlement came its second pill monitoring system, which ran on pill order threshold limitations. Each pharmacy had an order limit of 8,000 hydrocodone and oxycodone pills a month. If a customer attempted to exceed the threshold, a “three-level” review would be conducted to see if that threshold needed to be raised.

The first level involved a questionnaire being filled out to justify the large orders. If an order could not be justified in any of the review’s three levels, it would be reported to the DEA.

After the settlement, directors of regulatory affairs, like Oriente, were told the key to avoiding future violations was getting thresholds right from the start so they would not have to be reset or reported to the DEA, Cabell County attorney Troy Rafferty said.

Oriente said that, if a pharmacy wanted a threshold increase, there should be due diligence and documentation to show why a decision was made.

In 2008, there was a “buffer” ceiling of about 10% added for thresholds, which were then set based on an average of the last 12 months of a pharmacy’s ordering. In August 2008, hundreds of Rite Aids, including three of the four in Cabell County, were automatically approved for 50% threshold increases without a request being made.

The four Cabell County stores received 8.8 million dosage units from 2006 to 2014. While Rite Aid distribution center sent 63% of those dosages, McKesson sent larger, stronger amounts of the drug, attorney Paul Farrell Jr. said during opening arguments.

Approving threshold increase requests became the rule, rather than the exception, Rafferty argued.

Another 2008 email said McKesson was giving multiple increases to pharmacies a week. A director of regulatory affairs said a lot of the increases had been automatic. They did not question the increases, but asked for them to be more substantial so they would not have to make multiple reviews a week.

One director of regulatory affairs had warned his co-workers via email in 2008 that thresholds were being set too high and there were large gaps between the amount being shipped and what pharmacies needed.

In June 2009, another director of regulatory affairs had said he went through nearly 200 emails and did 80 threshold increases in one day toward the end of one month. He wrote that it was not possible to be truly diligent in vetting the threshold increase requests. More emails showed the directors complained of their workloads. They wanted to be more engaged with their customers, but had only five of them to oversee the entire country.

Oriente testified that he would approve threshold increases only for as much as a customer had requested, but Rafferty pointed to a 2010 email in which another director of regulatory affairs said to add 10% to whatever the customer had requested and round it up to create a buffer.

In June 2020, David Gustin, a director of regulatory affairs at McKesson, pleaded guilty in a Kentucky federal court to knowingly failing to tell the DEA about suspicious orders at a Manchester, Kentucky, pharmacy — a misdemeanor. The charge stemmed from approvals he granted between July 2011 to April 2012 to ship more than 300,000 oxycodone pills to the small pharmacy.

Around 2012, PowerPoints showed McKesson had trained its salespeople to pay attention to increases in controlled substance sales, cash sales, new sources of prescriptions and out-of-state areas being filled. They also wanted them to compare the volume of controlled substances to area demographics and look at changes to customer profiles.

In 2013, the monitoring system was enhanced so any order over the threshold was to be reported. The enhancements were to make it harder for thresholds to be increased, but the DEA said it did not work.

McKesson was on alert as early as Nov. 14, 2014, that it was failing to maintain effective controls against diversion on a national level, according to documentation that showed a letter from the DEA was sent to the company at that time.

Several of Oriente’s employee performance reviews from 2016 said he needed to better document his due diligence in reviewing threshold increases.

“If it’s not documented, it didn’t happen,” his reviewer wrote.

Rafferty said that was McKesson’s mantra for all it did.

In 2017, McKesson agreed to pay a $150 million settlement for similar Controlled Substance Act allegations as its 2008 settlement. Its Colorado, Ohio, Michigan and Florida distribution centers were suspended as a result.

Reach Courtney Hessler at or follow @HesslerHD on Twitter.

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