Press Release

Attorney General Alleges Fraudulent Distribution by Opioid Distributors

October 25, 2018

(Anchorage, AK) – As part of the State’s ongoing efforts in battling Alaska’s opioid crisis, Attorney General Jahna Lindemuth today filed a lawsuit against opioid distributors McKesson Corporation, Cardinal Health Inc., and AmerisourceBergen Drug Company. The lawsuit alleges that the three companies disregarded their obligations under Alaska law to report suspicious orders and prevent diversion of prescription drugs. If distributors had honored their legal duties to monitor, report, and reject orders of opioids that were excessive and clearly suspicious, the state claims these pills would have never reached the patients who became addicted to them and some that ultimately died from an overdose. Instead, they grossly over-supplied opioids into the state and consistently failed to report or suspend illicit orders, deepening the toll of opioid misuse, addiction, and overdose in Alaska.

“Alaska’s opioid crisis directly impacts people’s lives. We are determined to address the opioid epidemic in Alaska, and to hold accountable those who created it,” said Attorney General Jahna Lindemuth. “There’s no denying that the oversupply of highly addictive opioids led to the public health emergency in our State. Those responsible for this must answer for their actions in order to make the necessary changes for us to move forward. By failing to monitor and prevent the excessive amounts of opioids shipped into the state of Alaska, we believe these distributors played a central role in creating the opioid epidemic in our State.”

On October 30, 2017, the Attorney General’s Office filed a lawsuit against Purdue Pharma, LLC, the maker of OxyContin. The suit alleges that Purdue used deceptive practices in violation of state consumer protection laws, by, among other things, deceptively misrepresenting the risk that patients would become addicted to its opioids and overstating the benefits of the drugs. While Purdue moved to dismiss all of the State’s claims against it, the Alaska Superior Court denied Purdue’s request on July 12, 2018. A trial date in this action has been set for February 2020.

The lawsuit filed by the State today describes the role of distributors in purchasing prescription drugs, including narcotics, from manufacturers at enormous volumes and selling them to pharmacies. Like other brokers, distributors make their money on the spread between their buy and sell prices, as well as a fee as a percentage of sales.

While prescriptions would not have been written or dispensed without the deceptive marketing that prompted doctors to prescribe opioids long-term for a host of chronic conditions, the State’s complaint alleges that the overwhelming increase of opioids ordered by Alaska pharmacies, collectively and individually, put these companies on notice that they were meeting more than a legitimate market demand. Distributors have an obligation under both Alaska and federal law to prevent diversion and to ensure that the controlled substances that they buy and sell, including opioids, are not diverted for illicit use. Under the Alaska Controlled Substances Act, §17.30 et seq., (“ACSA”), which incorporates the requirements of the federal Controlled Substances Act (“CSA”), 21 U.S.C. § 811 - 830, and implementing regulations, distributors must monitor, detect, report, investigate, and refuse to fill suspicious orders.

Rather than continuing to sell, ship, and profit from these highly dangerous drugs, these companies had a duty to report and stop some of their supply. Had they done so, the opioid epidemic in Alaska—and its enormous human and financial toll—would not have been as grave.

The State’s complaint further asserts that Cardinal, McKesson and AmerisourceBergen acted deliberately to increase sales of, and profits from, opioid drugs, and did so willfully in the face of numerous enforcement actions, fines, and other warning signs. Defendants paid their fines, made promises to do better, and carried on as before.

The State claims the defendants deliberately disregarded their duties to maintain effective controls and to identify, report and take steps to halt suspicious orders. As a result, the State claims the defendants created a public nuisance, were negligent, engaged in unfair trade practices, and were unjustly enriched.

A copy of the complaint can be found here. - PDF(929KB)

CONTACT: Assistant Attorney General Cynthia Franklin at cynthia.franklin@alaska.gov or 269-5100.

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Department Media Contacts: Communications Director Patty Sullivan at patty.sullivan@alaska.gov or (907) 269-6368. Information Officer Sam Curtis at sam.curtis@alaska.gov or (907) 269-6269.