CHARLESTON – An economist expert claims Cardinal Health had a due diligence system in place that was followed as designed, arguing earlier experts failed to note the system in place.
Also, defense attorneys told U.S. District Judge David Faber they will wrap up their side of the case in the federal bellwether opioid trial about two weeks earlier than originally proposed.
The City of Huntington and Cabell County sued three of the nation’s largest pharmaceutical distribution companies – AmerisourceBergen, Cardinal Health and McKesson Corp. – in 2017 claiming the companies are largely responsible for fueling the current opioid epidemic that led the area to lead the nation in prescription opioid related deaths and at one-time being named the “epicenter of the opioid crisis.”
Wicht
On July 9, Jennifer Wicht, representing Cardinal Health, called John “Tri” MacDonald to the stand as an expert in data analytics related to the pharmaceutical supply chain to look at the flagging methodologies shown by plaintiff experts and to look for underlying data on prescribing histories viewed by Cardinal Health.
MacDonald looked at reports and sworn testimonies from Craig McCann and James Ralfalski. He also presented numbers he collected from Kaiser Family Foundation and government data on prescriptions to West Virginia.
“[The methodology] is indiscriminate in its flagging behavior,” MacDonald said.
MacDonald looked at both methodologies McCann and Ralfalski presented to the court earlier in the trial and did simulated the systems with dice rolls and temperatures.
He said method A is not reliable due to flagging specific numbers and that method B does not flag any order with declining trends in the data due to a threshold setting.
“I believe it is indiscriminate and it is incapable of identifying outliers,” MacDonald said.
MacDonald said McCann used data between 1996 and 2018, where he used the data between 2006 and 2018.
“The longer the time period, the more likely the order to be flagged,” MacDonald said. “A long-term customer [is] more likely than a short-term customer [to be flagged].”
The numbers show that in 2010, the “West Virginia vs. National Prescription Drug Volume Per Capita” was 54 percent above national average at 18.5 per capita. In 2015, it was 72 percent above national average at 21.8 per capita.
West Virginia was 45.3 percent above national average in distribution of all prescription opioids.
MacDonald said between 2006 to 2018, Cardinal Health distributed a small percentage of opioids to the Cabell/Huntington area at just 7.05 percent overall. 85 percent were noncontrolled substances and 7.9 percent being nonopioid related.
“At the aggregate level, there’s’ no indication that the distributions by Cardinal health were outside the norm,” MacDonald said.
Representing the plaintiffs, Mike Fuller led the cross-examination, heavily questioning MacDonald’s review and knowledge of due diligence files and process done by Cardinal Health.
“[I am] not here to testify to the adequate effectiveness of any piece of due diligence,” MacDonald said. “My opinion is the plaintiffs don’t acknowledge contextual analysis.”
MacDonald testified that he did not cross-reference reports as he was not trying to audit the due diligence. He reviewed the material as it was produced.
Fuller argued the due diligence file in MacDonald’s reliance materials excluded several pages, only including three.
Fuller presented several documents that he argued could potentially be used to analyze and note outliers, including one showing Cardinal Health distributed 131 million oxycodone pills to West Virginia (population 1.8 million) between 2006 and 2014, where it only distributed 77.9 million pills to Illinois (population 12.8 million) and 79.2 million pills to Texas (population 25.2) during the same time period.
MacDonald continuously argued that McCann and Ralfalski ignored most of the due diligence process, carrying forward the flagging on a case-by-case basis but ignoring the things Cardinal did do.
“I am providing an opinion that they did have a system,” MacDonald said. “The threshold they did set, they operated in those thresholds. I am offering an opinion that they did execute as designed. That is what I am testifying to, what is in my report.”
MacDonald acknowledged issues with the misuse and abuse of opioids but did not directly acknowledge awareness that the Cabell/Huntington area is/was in an opioid epidemic.
“I understand that there has been negative opioid impacts in the US. I am also aware there is a pain crisis,” MacDonald said.
Prior to MacDonald’s testimony, defendants presented four witnesses in one day, July 8.
Witnesses included Kevin Murphy, a health economist; Ted Martens, a forensic accountant; and Peter Borberg, an economist; and completing the questioning of James Hughes, an economist.
All four witnesses attempted to counterargue the plaintiff’s expert witness testimonies, the plaintiffs argued the defendant’s provided the policies analyzed and there was a failure to do their own their own analysis of the data.
Enu Mainigi, representing the defense, proposed – with the judge’s permission – that closing arguments for the case be set for July 27 and 28 with each side allowed six hours of argument. Faber had no objection and noted the closing argument dates.
This will be a little over two weeks earlier than originally scheduled.
The defense stated six witnesses are left to be called. Testimony will continue July 12.
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)