CHARLESTON – A key former Drug Enforcement Administration officials took the stand in the landmark federal opioid trial, opening his testimony by saying drug distribution centers were well-equipped to prevent diversion.
Joe Rannizzisi, who retired from the DEA as Deputy Assistant Administration Office of Diversion Control in 2015, testified for nearly two hours at the end of the court day June 7. He was called as a fact witness, not an expert witneess, and is limited in his testimony under a Touhy authorization given by the Department of Justice.
The City of Huntington and the Cabell County Commission sued three of the nation’s top pharmaceutical distribution companies – AmerisourceBergen, Cardinal Health and McKesson – in 2017 seeking compensation over claims the companies helped fuel the opioid epidemic by sending more than 81 million controlled substances to the county between 2006 and 2014.
O'Connell
Attorney Linda Singer, representing the City of Huntington, questioned Rannazzisi. After opening with questions about his background, highlighting that he worked as a pharmacist and obtained a law degree. He worked for the DEA for nearly 30 years.
He said he grew up in a neighborhood of police officers and fireman that influenced his journey that led to eventually working for the DEA.
“I wanted to be in narcotics law enforcement,” Rannazzisi said. “I grew up in the 70s. There was a lot of issues with drug abuse and drug addiction.”
Considered a whistleblower by some, Rannazzisi now consults with several plaintiff lawyers across the country in their cases against drug companies.
“I believe the facts should be presented in this case, as well as other opioid cases across the country because the public needs to be aware of what was going on. And this is my opportunity to do that.”
In the mid-1990s and early 2000s, Rannazzisi said officials saw an increase of drugs coming into pharmacies. He said doctors and pharmacies went from dispensing a few thousand to a few hundred thousand. By 2004, he said large volumes of hydrocodone and other controlled substances were being seen coming from internet pharmacies.
Singer questioned Rannazzisi on the closed system of distribution which he said is a “system of security and accountability.”
“Our resources are limited,” Rannazzisi said of the DEA's role in monitoring. “The Controlled Substance Act was set up so supply chain can police itself.
"We (the DEA) need to know exactly what’s in the system, and we need to prevent those drugs from being diverted to the illicit market. It (the closed system) makes sure there are tools in place to prevent that from happening.
"If there is diversion, people become addicted, people overdose and people die."
He said the closed system was setup to prevent diversion, and each member within the system is DEA registrant except for the patient. The DEA oversees the system.
"You don’t need a gun or a subpoena to police your customers," Rannazzisi testified. "If there is a breach, drugs are funneled out of that supply chain into the illicit market. It’s a breakdown. It’s as simple as that."
Rannazzisi testified that he believes the distribution companies have the resources to prevent diversion through the suspicious order monitor program.
“You can walk into your customer and ask the same questions (as the DEA),” Rannazzisi said. “(If) they don’t answer, you don’t supply them anymore.”
Rannazzisi said the DEA began initiatives to “ensure and reiterate registrants knew obligation under (the) Controlled Substance Act.” This included letters, final orders on investigations to show why action was taken, presentations, Q&As, DEA-sponsored conferences and face-to-face meetings. He said the initiative was started when an increased number of pharmaceuticals were being distributed via internet pharmacies.
He said these facilities were receiving millions of controlled substance tablets a year, causing the DEA to shift focus.
“(Internet pharmacies) were an immediate threat that we had to deal with,” Rannazzisi said. “Quantities that were not useable and should have immediately struck a chord (with distribution centers). ...
"The volume, the types of drugs, the classes of drugs, the ratio of controlled drugs, amount of drugs going into small areas, pharmacies had no doctor-patient relationship with patients. All of this really troubled us.
"They (internet pharmacies) were ordering huge volumes, hundreds of thousands of tablets. They had such a huge customer base because people were using the internet to veil their activities. They were ordering drugs, basically, in the darkness so they’d be hard to find. These pharmacies were in warehouses, in basements. If you had a room where you could store drugs, you could open an internet pharmacy."
Singer then presented several memos that showed summaries of DEA meetings with the three defendants overviewing the companies’ obligations.
Rannazzisi testified that the DEA cannot tell a distribution company if an order is legitimate or not and that reporting a suspicious order does not relieve the company of its responsibility to maintain diversion control.
“DEA is not in a position to determine whether an order should be shipped or not,” Rannazzisi said.
He said DEA does not have the knowledge to make those decisions. And even if they did, he said DEA workers would be held up by decisions, leaving little time for other work.
Overseeing the bench trial, U.S. District Judge David Faber, had questions regarding suspicious orders and the purpose of reporting to the DEA.
Rannazzisi said it was like a “pointer system for the DEA.” He said if the distribution company cannot resolve a suspicious order, it should be further blocked for DEA investigation. If the company ships the order, it is considered diversion. ...
"The DEA’s not in a position to determine whether an order should be shipped or not. It’s a business decision. We don’t know the customer, we don’t know where the customer sits, we don’t know how many times they’ve been questioned. We can't do that due diligence review and then make that determination. All of our agents would be tied up doing that instead of investigating."
“Did DEA follow-up on every suspicious order received?” Faber asked.
Rannazzisi said he was advised not to answer that question under his limitations.
This response led to a lengthy debate on the defendants' objection and motion to strike his testimony from the record if Rannazzisi was unable to answer those types of questions. The defendants said they felt it was “opinion without ability to challenge,” leaving defendants in a position unable to explore.
Faber ruled Rannazzisi would answer the general questions asked.
“We did follow up on suspicious orders, but you understand the volume of suspicious orders that come in,” Rannazzisi said. “If you do suspicious orders appropriately or correctly, you’re not going to get a thousand orders coming into the DEA in one day.”
He said orders should have a clear explanation on what triggered the order and deemed it suspicious.
An ingredient limit report was presented by Singer to Rannazzisi, who said it was just a general report and not a suspicious order. He said these orders, sometimes known as excessive limit reports, were not useful because suspicious orders should be reported upon discovery and the reports had no reasoning, trigger of suspicion or what was done in terms of resolving.
While not done himself, Rannazzisi said the DEA did provide guidance in several forms explaining these were not suspicious order reports.
“We’ve been seeing these since I was a diversion investigator,” Rannazzisi said. “Just volumes of transactions with no guidance to why.”
Rannazzisi's testimony will resume Tuesday.
Earlier in the day, attorney Timothy Hester, representing McKesson, led cross-examination of Lyn O’Connell, associate director of addiction sciences at Marshall Health.
Hester questioned O’Connell on several recovery programs in Cabell County and the City of Huntington, inquiring who ran the program, the cost and where funding came from, if not the county/city.
Defense questioned who used the recovery programs, including neighboring counties.
“Substance use is not isolated in any singular city or county,” O’Connell said. “Our goal is to help save lives whether they reside as our neighbor or across town.”
Different medications used for Medication Assistance Treatment were discussed thoroughly, as well as the various types of recovery treatment.
O’Connell said programs are created to sustain and treatment can be given to any individual suffering from any substance use disorder. She also testified on the likelihood of recovery on first try and long-term recovery often takes many tried. She said there is currently not a lot of long-term research.
O’Connell said the program has worked for many grants to continue funding the recovery programs, including rallying for change in legislature to help fund various program pieces.
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)