According to the Department of Health and Human Services, 78 people die each day from an opioid drug-related overdose. The rate of these overdose deaths has almost quadrupled since 1999, and no wonder: With at least 650,000 opioid prescriptions dispersed daily, the risks of citizens developing an addiction are high. Plenty of blame can go around: Doctors who struggled with the separation of pain relief from addictive behavior; lax enforcement as the crisis worsened in recent years; and a disengaged working class that feels ignored and on the margins.
The results are disturbing: The United States, which is home to about 5 percent of the world’s population, consumes about 80 percent of its opioid supply, according to reports in news outlets such as CNBC.
Pharmaceutical companies must also shoulder some of this responsibility, though their financial prowess has allowed them to evade legal responsibility.
Purdue Pharma, for example, aggressively marketed OxyContin since the 1990s – and when doctors complained that the recommended 12-hour dose of the drug was not working, the company’s sales reps simply urged them to prescribe stronger doses. Purdue agreed to pay $600 million in fines last year, and has since agreed to work closely with law enforcement and healthcare professionals to raise awareness about the risks of opioid addiction.
Pfizer also found itself in legal trouble last year when Chicago sued the company for contributing to the city’s surge in drug overdoses.
Now another company has skirted any punitive action from the federal government despite evidence suggesting it had a large role in exacerbating the opioid epidemic.
A recent Washington Post investigation suggested Mallinckrodt Pharmaceuticals was negligent about monitoring its opioid drug sales and shipments, which led to a $35 million settlement with federal regulators. Four investigations across five states found that the company may have committed as many as 44,000 federal violations that could have totaled $2.3 billion in fines.
The relatively measly settlement has been described by a government official as “chump change” for a company that generated almost $3.4 billion in revenues and $489 million in profits last year.
But murky legal precedent, combined with Mallinckrodt’s relentless band of attorneys, eventually convinced the federal government to drop its case and seek a settlement. The company will not have to admit to any wrongdoing, and Mallinckrodt insisted in a recent press release that federal investigators’ reports were full of inaccuracies.
Federal prosecutors described Mallinckrodt’s dodging of liability as "egregious." Drug Enforcement Agency (DEA) investigators, for example, concluded that 500 million of the company’s generic oxycodone pills ended up in Florida due to suspicious orders between 2008 and 2016. That amount was two-thirds of all the oxycodone pills sold in the Sunshine State during that time. At least 24,000 of those pills ended up at one Delray Beach medical practice during one year alone. That doctor was eventually convicted when crimes related to his “pill mill” were exposed after one of his patients accidentally overdosed, and he is now serving a 25-year prison sentence.
Nevertheless, while federal law requires drug companies to monitor their sales and report any suspicious activity, Mallinckrodt insisted that once a drug was sold to a distributor, the company was no longer responsible for tracking where those pills end up. And in any event, despite advances in information technology (all of these pills were issued with lot numbers), the company claimed it did not have the capacity to monitor the tens of thousands of retail outlets at which its drugs are sold.
As it disclosed in a recent Securities and Exchange Commission (SEC) filing, Mallinckrodt does not expect the settlement to have any “material adverse effect” on its financial performance. Investors, however, cannot be pleased with this recent news, as other investigations have contributed to the company’s stock trading at less than half of last summer's $85 share price.
The United Kingdom-based pharmaceutical giant has also been taken to task for the tactics it employed to market other drugs, including H.P. Acthar, a drug that is not often prescribed but is used to treat several conditions and diseases, from infantile spasms to multiple sclerosis. As Linette Lopez of Business Insider reported last month, the company came under scrutiny for a generously-paying speakers program that benefits doctors who are the top prescribers of H.P. Acthar.
Mallinckrodt says it will do its part to prevent the abuse of opioids, including an aggressive distribution of drug deactivation pouches in regions such as northern Kentucky that were hit hard by the epidemic. The company says it will also boost its support of prescription drug monitoring programs across the U.S. while including anti-theft tracking devices in more of its drug shipments.
But considering the surge in opioid-related deaths since the early 2000s, and the price paid by families and communities, Mallinckrodt has overall emerged unscathed from its role in this crisis, and its efforts can best be described as taking a slingshot into an AK-47 fight.
Image credit: Daniel Foster/Flickr
Leon Kaye has written for TriplePundit since 2010, and became its Executive Editor in 2018. He's based in Fresno, CA, from where he happily explores California’s stellar Central Coast and the national parks in the Sierra Nevadas. He's worked an lived in South Korea, the United Arab Emirates and Uruguay, and has traveled to over 70 countries. He's an alum of the University of Maryland, Baltimore County and the University of Southern California.