CHARLESTON – Attorneys representing Cabell County and the City of Huntington probed a McKesson sales representative on warning customers of nearing threshold limits, pushing increases and pushing sales – including controlled substances.
Huntington and Cabell County sued the nation's three largest pharmaceutical distribution companies – AmerisourceBergen, Cardinal Health and McKesson – in 2017 seeking to hold the companies accountable for their alleged part in the opioid epidemic by sending more than 540,000 opioids each month to independent and chain pharmacies – excluding hospitals and/or hospital pharmacies – located in Cabell County.
On May 25, defense attorney Eric Kennedy called Timothy Ashworth, regional sales representative with McKesson to the stand.
Kennedy testified he has worked with McKesson since 2005 selling to independent retail pharmacies. His territory covers West Virginia toward Clarksburg and Parkersburg to the Virginia state line except for some state bordering counties, he said. Cabell County has been included in his territory since he began.
Kennedy asked Ashworth if he ever warned a customer it was reaching threshold limits between 2008 and 2013.
“When the program started, there was a period where we were given the information where we could warn a customer they were reaching their threshold. It was all new,” Ashworth said.
The plaintiffs argued that this period was five years and that sales representatives were to ask if a threshold increase was needed.
“I would ask if they needed a threshold change and if they did, that would start the whole threshold request procedure,” Ashworth said.
The plaintiffs claimed McKesson systemically sent reports of who to call between 2008 and 2013, the customer received a warning on statements and that a call was made from a call center in Texas.
“All I know was my role at the time and if that was the time period you’re talking about, I would only have known what I had gotten,” Ashworth said.
Ashworth said McKesson does not market opioids but testified the company does offer generic drug rebate and price reduction programs.
“I think all the generic items we have is a part of our competitive price mix,” Ashworth said. “There’s always adjustments to generic pricing.”
These generics include drug relations of hydrocodone and fentanyl. Ashworth agreed that the purpose of price reduction programs was to encourage customers to purchase more.
Ashworth said he was not aware McKesson sold more opioids than any other company in the country.
Between 2006 and 2014, McKesson held 18.9 percent of the market with 19 billion pills – oxycodone and hydrocodone – distributed.
Kennedy asked Ashworth about his knowledge of having a key role in diversion prevention.
“We play a role in getting information and collecting information and giving it to regulatory,” Ashworth said. “They’re the ones that run the regulatory program and monitor.”
A deposition presented with earlier testimony from Ashworth showed that he said “yes” when asked if he ever played a key role in preventing diversion
Ashworth testified that he did not remember a site visit from regulatory between 2008 to 2013 to his Cabell County customers.
Plaintiffs claimed McKesson did not give resources to be the “eyes and ears” of the company.
An email string was presented from David Gustin, director of regulatory affairs to a large group of people with the subject line: “Pill Mills.”
Gustin wrote that it would be easy for one of the company’s customers to be involved in a pill mill, “knowingly or unknowingly” and that the “it’s up to the rep who knows the customer best” and the area around the customer. He also wrote “we count on you to be the eyes and ears of our company” and that everyone has a part in the team.
Ashworth said he believed Gustin meant they were all a team, and it took all of them to ensure proper regulatory service was provided.
During the defendant’s redirect, a series of questions involving Custom Script, formally Medicine Cabinet, and the pharmacy’s work as a compounding pharmacy.
Drug compounding is the “process of combining, mixing, or altering ingredients to create a medication tailored to the needs of an individual patient,” according to the Federal Drug Administration.
A threshold increase of 7,000 oxycodone was made by Custom Scripts in 2010 as it was “a new pharmacy” that had been “aggressively marketing their compounding business to Cabell-Huntington Hospital’s Oncology clinic and Dr. Fisher’s Huntington Spine and Rehab Clinic.”
Ashworth denied knowledge of Custom Script having a controlled to noncontrolled substance ratio above 90% and that the pharmacy’s threshold was met dozens of times in less than three-month period.
Documentation from Ashworth’s deposition testimony showed that when asked about a ratio being 50/50 Ashworth believed that would be high.
Earlier in the day, attorney Paul Schmidt representing McKesson Corp, led cross-examination of Michael Oriente, director of regulatory affairs of McKesson. Schmidt started with a pattern of questions involving McKesson’s range of products and distribution center’s security.
Oriente said distribution centers are “size of about four football fields.” Oriente testified that cameras were set up throughout the facility, including inside the controlled substance storage.
“Schedule two opioids would be stored in a cement vault re-enforced with rebar and would have a safe door, like a bank,” Oriente said. “Schedule three to five would be stored in a cage, a locked cage.”
Oriente said the cages had limited access and required permitted badge swipes.
“Those measures are in place because of the closed-loop distribution,” Oreinte said.
The closed-loop distribution system is set in place to prevent diversion by keeping record of controlled substances from being manufactured to being dispensed to patient.
Oriente said each distribution center must be registered by the DEA and go under a renewal each year. He also stated that the DEA can “visit as they see fit” and usually comes to audit facilities about every two years.
Oriente was asked about his previous statement stating, “there’s a difference between a diverted order than a suspicious order,” and what does that mean in terms of blocking and reporting orders.
“Some of the medications we deliver to both hospitals and pharmacies are maintaining drugs for people to live their daily lives,” Oriente said. He stated some medications are for surgeries or other critical needs.
Oriente testified that pharmacies are not a one size fits all type and that in his experience the number of opioids orders does not deem a high risk for diversion. He also said prescriptions and other medical products have expiration dates.
“They would not order product just to sit on the shelf. It’s space that they have. It’s expirable,” Oriente said.
Oriente said prior to 2012 more prescriptions were being written, therefore the DEA was increasing manufacturing quotas.
“Pharmacies would need to order more in order to meet the increase in prescriptions they were seeing,” Oriente said.
Prior to 2008, distribution centers were not permitted access to the DEA Automation of Reports and Consolidated Orders System (ARCOS). This data included all shipments of controlled substance two through five to specific registrants in specific amounts. The DEA had pharmacies, dates, volumes and all controlled substances orders shipped.
Prior to 2019, McKesson could “only see what McKesson saw from that customer” unless request made to DEA. McKesson was granted access to ARCOS by “an act of Congress” Oriente said.
“One more tool in the toolbox to review customers,” Oriente said. “It’s one of the things we use today on a daily basis.”
McKesson’s Drug Operations Manual for storage and shipments of controlled substances, January 15, 1997, was presented by the defendants. Oriente said this was used prior to the CSMP and was updated as needed.
The manual listed a DEA definition of suspicious orders, “suspicious orders include orders unusual size, orders deviating substantially from a normal pattern and orders of unusual frequency.”
Oriente understood this to be what constitutes as a suspicious order but was not clear based on the variabilities pharmacies have and made following the definition challenging.
“At times the PIC (pharmacy in charge) perhaps does order in pharmacy, and he may be going on vacation next week. He could be ordering a two-week supply to cover week [he was gone],” Oriente said.
Oriente said to his understanding, the DEA was changing guidance after not having “approved or endorsed any specific system for reporting suspicious orders.” McKesson changed the company’s response in return by blocking threshold exceeded orders.
In 2008, Oriente reported feedback from DEA to “report less” because they “didn’t wasn’t all the paperwork.”
An email from Oriente to Bruce Russell and Don Walker, Senior vice-president over regulations about the update.
“Buffalo has received a verbal request from the local DEA office not to receive the monthly reports, just their copy of the 222 forms,” Oriente wrote in the email.
Form 222 is used by pharmacies to order schedule one and two controlled substances and is required for every distribution, purchase or transfer of a schedule two substance according to the National Library of Medicine.
Oriente said emails previously presented by plaintiffs between his DRA colleagues, including Gustin, were because they “vented from time to time” but they “took our jobs very seriously.”
He said there were times he wished there was more help, but it kept him busy. Oriente said it meant more hours and longer days and threshold requests he was unable to get through at the end of the month would be pushed to the next month to be reviewed.
Gustin pleaded guilty in federal court to a misdemeanor charge for failure to report suspicious orders of extreme prescription pain pills to a Kentucky pharmacy.
In 2013, DEA executed an Administrative Inspection Warrant at McKesson’s Aurora center. This ultimately led to a 2017 settlement with McKesson. Under the settlement agreement, McKesson and the DEA agreed reviews would be conducted within 150 days by DEA of the functionality of the company’s diversion compliance program – including Lakeland, Landover and Conroe facilities in addition to five other hubs.
The reviews would “be deemed satisfactory unless DEA determines on or more facilities inspected” failed to maintain effective control against diversion, failed to detect and report suspicious orders or failed to meaningfully investigate new or existing customers purchases of controlled substances.
Oriente testified that to his knowledge know of the facilities investigated failed the inspections and he had no knowledge of the Washington Court House facility, serving West Virginia, was included in the additional five.
Defendants argued that the language in the agreement did not say anything about the failure to block orders, which is what would have been occurring with the distribution centers serving West Virginia Oriente said.
It was added to the recorded by Cardinal Health representation, that plaintiffs were no longer calling Todd Cameron, senior vice president of Cardinal Health as a witness.
Huntington is represented by Anne Kearse, Joseph Rice, Linda Singer and David Ackerman of Motley Rice and Rusty Webb of Webb Law Centre. Cabell County is represented by Paul Farrell Jr. of Farrell Law, Anthony Majestro of Powell & Majestro and Michael Woelfel of Woelfel & Woelfel.
AmerisourceBergen is represented by Gretchen Callas of Jackson Kelly and Robert Nicholas and Shannon McClure of Reed Smith. Cardinal Health is represented by Enu Mainigi, F. Lane Heard III and Ashley Hardin of Williams & Connolly. McKesson is represented by Mark Lynch, Christian Pistilli, Laura Wu and Megan Crowley of Covington & Burling.
U.S. District Court for the Southern District of West Virginia case numbers 3:17-cv-01362 (Huntington) and 3:17-cv-01665 (Cabell)