CHARLESTON – A key former Drug Enforcement Administration official spent the day on the witness stand giving testimony between objections, legal limitations and frustrations.
Joe Rannazzisi was back on the stand June 8, first being questioned by attorney Linda Singer, who is representing the City of Huntington. Rannazzisi retired from the DEA as Deputy Assistant Administration Office of Diversion Control in 2015. Singer questioned him in about several orders to show cause and immediate suspension orders given to the three defendants – McKesson, AmerisourceBergen and Cardinal Health – over the years.
Rannazzisi is under a Touhy authorization that limits his testimony to protect the inner workings of a federal program. The defendants objected several times on various grounds –including hearsay, relevance and saying Rannazzisi’s testimony should not sound as if he is speaking on behalf of the DEA.
Throughout the day, defendants repeatedly voiced motions to strike Rannazzisi’s testimony from the record due to his limitations, claiming he was not able to answer several “general” questions and it was leaving little room for cross-examination, making the testimony one-sided.
Rannazzisi said presenting an order of cause is a significant step against a distribution company and were issued to seek explanation of continued violations of warnings; an immediate suspension order was issued after a number of violations and there was an imminent threat to the public’s health and safety.
“To stop hemorrhaging,” Rannazzisi said. “When we’re doing an order to show cause, we don’t take those lightly.”
Huntington and Cabell County sued the nation's three largest pharmaceutical distribution companies 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.
A document was presented with notes from a meeting with McKesson’s senior leadership in 2005. Concerning ARCOS data was presented showing McKesson continued to ship large volumes of hydrocodone to pharmacies the DEA had informed the company were suspicious.
“This is a suspicious order," Rannazzisi said of a prior meeting with McKesson. "This is what you’re supposed to be looking for. This is red flags, black flags, whatever you want to call them."
Numbers in the document showed 1.8 million total dosages were shipped to five pharmacies by McKesson between Oct. 21 and Oct. 31, 2005.
“There’s no legitimate reason to have that much,” Rannazzisi said before recalling a meeting he had with McKesson officials.
"Could you give me any type of explanation?" Rannazzisi said he asked. "I stared at them. They shuffled papers and looked around, then one of the gentlemen gave me a little smile and said, 'Well, I guess you got us.'
"I was floored by that statement. They said, 'We can’t tell you why. We don’t know." That upset me. It really upset me."
He said later the company called and said the suspicious order monitoring system was not picking up on generic hydrocodone products, which Rannazzisi said is “a systematic failure.”
“Suspicious order monitoring program is supposed to pick up all controlled substances, whether generic or brand name,” Rannazzisi said. “If one facility was not picking that up, chances are all the systems weren’t picking that up. It’s a nationwide system.
"Just because you give someone a driver’s license doesn’t mean they aren’t going to speed. The suspicious order monitoring system … that gives us an idea of what they’re doing it and how they’re doing it."
Rannazzisi said “it is a very large commitment of resources” to take action to order a show cause. He said evidence of large ordering activity would require additional staff to be sent to the area. He said those types of things were seen during the height of internet pharmacies, where a facilitation center would have an online questionnaire for customers, a doctor would take the questionnaire, write and send a prescription with little to no patient interaction.
In a transcript of a testimony given by Rannazzisi during a Congress hearing that was presented, showed Rannazzisi said investigators found one internet pharmacy distributing 15 million hydrocodone tablets in a single year.
Rannazzisi said with the closing of internet pharmacies, an increase in pain clinics or what he called “rogue pain clinics” also known as pill mills. According to Rannazzisi, these clinics were a group of doctors working without real medical intentions. Doctors would meet with a patient, prescribe medication, be paid in cash and move onto the next patient.
Rannazzisi said with the transition of internet pharmacies to rogue pain clinics came a shift from hydrocodone to oxycodone.
There was also an increase in visitors as the clinics grew in popularity. “Oxy Express” is when a group of people would go to Florida to visit pain clinics to take the pills back to their home areas. Rannazzisi said those people might go to three or five such facilities in one trip, fill the prescriptions and then head back north/Midwest to distribute. This was the same idea behind the “Blue Highway” which he said referenced oxycodone 30 mg tablets.
“That was the whole idea behind it,” Rannazzisi said. “You visit multiple prescription mills. You get your pills from pharmacy in area and go back to where you came from.”
Rannazzisi said distribution companies were informed about the pain clinics operation through presentations.
Written in a settlement agreement between McKesson and the DEA in May 2008, McKesson agreed that “any expressed to implied approval by DEA of any previously implemented system to detect and support suspicious orders is rescinded” and that “a finding a ‘satisfactory does not otherwise express DEA’s approval of the compliance program implemented by any particular distribution center.”
“There was information out there that the DEA was approving suspicious order monitoring programs, and that was not correct and not true,” Rannazzisi said.
The DEA implemented distribution initiative meetings in 2006 that included what is now known as the “Rannazzisi letters.” These letters were to reiterate the responsibilities of the registrants to maintain effective controls in diversion and what to look for in terms of suspicious ordering.
“We weren’t getting suspicious orders,” Rannazzisi said. “What we were getting was excessive purchase reports … which was not suspicious orders.”
Singer resumed questioning Rannazzisi about information given to distribution companies with guidance from the DEA to prevent diversion. Rannazzisi said to his knowledge, nothing from these letters he sent were different from what the DEA had said before, it was reiteration. He also said there was no reply from registrants.
“If there was a problem with the letters, I would have been notified because they are my letters,” Rannazzisi said.
Singer questioned about ARCOS data and how it was used. Rannazzisi said ARCOS data is raw data and has to be validated – takes three to five months – at one point.
Rannazzisi said distributors have access to more ARCOS data than the DEA. All controlled substance information is immediately accessible by the distribution companies, as they sold the substances. The DEA gets reports of scheduled two and three narcotics monthly to quarterly, Rannazzisi said. Distributors also have access to non-controlled substance numbers, where the DEA does not get those numbers, numbers Rannazzisi said is used to compare purchase numbers and help control diversion.
Rannazzisi said during his tenure it was hard to complete every investigation on suspicions.
“It was very difficult based on the resources we had at the time,” Rannazzisi said. “These investigations take a lot of time. There’s about 65,000 retail pharmacies in the United states ...1.3-1.4 million prescribers. We were definitely outmanned, so we needed help. That’s why the Controlled Substance Act (was needed).”
Rannazzisi said distribution centers were not notified of another registrant, such as a pharmacy, being investigated due to Department of Justice policy.
Rannazzisi said there are two parts to setting a quota, the first part is the amount going to the patient. The second part involves the amount for research, development, validation and scientific needs.
The yearly quota had to be adjusted yearly to the amount being prescribed out, Rannazzisi said.
“As the number kept going up, we had to adjust the number every year,” Rannazzisi said. “We have to meet the needs of the patient population.”
Rannazzisi said quota is a scientific and mathematical exercise and cannot just be lowered, like many think. He said if 20 percent of the quota was cut then those legitimate-in-need patients are now competing with those out seeking drugs. He said quota is based on need and in order to reduce the number, the number of patients has to be reduced.
At one point, Rannazzisi said “you cannot just cut the quota by 25 percent. You can’t do it.”
But a DEA press release from 2016, which is shortly after Rannazzisi retired, says just that.
The DEA "has reduced the amount of almost every Schedule II opiate and opioid medication that may be manufactured in the United States in 2017 by 25 percent or more," the release states. "A handful of medicines were reduced by more, such as hydrocodone, which will be 66 percent of last year’s level."
Compliance and the Controlled Substance Act at every level is “what stops drug-seeking behavior” Rannazzisi said. He said the best way to prevent diversion is to cut off the source.
“Seeing what drugs did to people in my neighborhood,” Rannazzisi said. “The way I thought I could serve is to do this job. I stayed with it for 29-plus years.”
Since retiring from the DEA, Rannazzisi has done consultant work for states taking action against opioid manufactures and distributors, as well as speaking for different groups. While Rannazzisi testified that he spoke for free to any law enforcement and anti-addiction groups, regulators continuing education and support groups – other than transportation. Rannazzisi said he has made roughly $860,000 since 2016 and was making $180,000 per year during the last two to three years with the DEA.
Then, shortly before testimony ended for the day, defense attorneys began their cross-exaimination of Rannazzisi.
Attorney Paul Schmidt, representing McKesson, started with quick and rapid questions, providing a deposition transcript that contradicted some of Rannazzisi's testimony from earlier in the day. Schmidt’s line of questions ranged from internet pharmacies to McKesson’s work toward resolving issues raised by the DEA, that Rannazzisi had not been aware.
Schmidt referenced pharmacies earlier presented with names blocked, asking if Rannazzisi was aware that McKesson had cut off a specific pharmacy nine months before the DEA removed the pharmacy’s license. In that nine months, the pharmacy received 1.2 million tablets. Another pharmacy received 10 million pills in the nine months between when McKesson cut the company off and the DEA removed the license.
Rannazzisi said the DEA could not cut off the pharmacies immediately because of due process to ensure appropriate and enough evidence was found to shut the pharmacy down.
Schmidt directed the line of questioning to ones requiring straightforward – yes or no – answers, causing Rannazzisi to become viewably frustrated as he tried to explain answers further than asked. Schmidt used prior testimony from witnesses to challenge Rannazzisi’s current testimony.
The rapid questioning from Schmidt and argued explanations Rannazzisi tried to make caused palpable tension between the defense attorney and witness through the remainder of questions.
Schmidt provided documents and testimony transcript on McKesson’s policies and procedures, verification of customers, reports made and how McKesson was making to accommodate changes and guidelines by the DEA, none of which Rannazzisi had any personally knowledge.
Cross-examination will continue Wednesday.
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)
