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#SubOversight Questions Drug Distributors About Practices During Height of Opioid Epidemic


Hearing Part of Year-Long Bipartisan Investigation into Alleged Pill Dumping in West Virginia

WASHINGTON, DC – The Subcommittee on Oversight and Investigations, chaired by Rep. Gregg Harper (R-MS), today held a hearing with the leadership of national and regional drug distributors in regard to the committee’s bipartisan investigation into opioid distribution practices, particularly alleged pill dumping in West Virginia.

“Today’s hearing marks one year to the day since we first asked the DEA and the nation’s largest opioid distributors for information about the overwhelming amount of prescription opiates that flooded countless communities,” said #FullCmte Chairman Greg Walden (R-OR). “After hearing from the DEA in March, it’s important that today we hear from the executives who lead the most influential pharmaceutical distributors in the country. We have tough questions for you today, but we ask you these questions in order for us all to find solutions.”

Dr. Joseph Mastandrea was the only executive to acknowledge that his company’s actions played a role in the opioid crisis

During his line of questioning, #SubOversight Chairman Harper posed a simple and straightforward question to all five executives – “Do you believe that the actions that you or your company took contributed to the opioid epidemic?”

Of the five executives, only one said he believed his company’s actions had played a role in the opioid crisis. That executive was Dr. Joseph Mastandrea, Chairman of the Board, Miami-Luken, Inc.

Following that question, #SubOversight Chairman Harper asked follow up questions about the company’s actions. During that exchange, Mr. John Hammergren, Chairman, President, and CEO, McKesson Corporation, stated that while they did ultimately terminate a relationship with one of the Sav-Rite pharmacies highlighted in the committee’s investigation, “we wish we had terminated that relationship sooner.”

The leadership of the five drug distributors issued varied testimony about their company’s efforts and distribution processes in West Virginia.

Mr. George Barrett, Executive Chairman of the Board, Cardinal Health Inc., testified, “…we share the judgment of policymakers that there have been too many prescriptions for too many pills across the country over the past decade. With regard to two of the pharmacies that have been a particular focus for the subcommittee, Family Discount of Mt. Gay and Hurley Drug Company, we reached decisions at the time based in part on the demographics of the surrounding area, the characteristics of the individual pharmacy, and the views of our internal staff. Those decisions allowed the two pharmacies to continue to receive certain volumes of hydrocodone and oxycodone from Cardinal Health for longer than I think they should have based on what I have since learned about the circumstances surrounding those pharmacies.”

Continuing, Mr. Barrett told #SubOversight, “With the benefit of hindsight, I wish we had moved faster and asked a different set of questions. I am deeply sorry we did not. Today, I am confident we would reach different conclusions about those two pharmacies. Although both pharmacies continue to maintain active and valid DEA registrations and West Virginia Board of Pharmacy licenses, Cardinal Health has not distributed oxycodone or hydrocodone to Family Discount of Mt. Gay since 2012, or to Hurley Drug Company since 2014.”

Rep. David McKinley (R-WV) questioned the witnesses about the committee’s findings, which have taken place in his backyard

Mr. Steven Collis, Chairman, President, and CEO, AmerisourceBergen Corporation, stated, “Our place in the supply chain provides AmerisourceBergen Drug Corporation with neither the information nor the expertise to override clinical decisions by trained doctors and pharmacists or to determine the appropriate supply of medications. While we believe it is important to recognize our limited but vital role in the supply chain, we are committed to working with the Committee and all stakeholders on ways that all distributors, and AmerisourceBergen in particular, can leverage our expertise and position in the supply chain to help address this crisis.”

During his opening statement, #FullCmte Chairman Walden countered this broad claim, stating, “You have a unique set of resources and tools at your disposal, and a shared responsibility in flagging suspicious activity and diversion. You are supposed to be one of the first lines of defense in this crisis.”

Mr. Hammergren also stated his company is not in a position to know this important information, putting the blame on the Drug Enforcement Administration (DEA). Mr. Hammergren stated, “No single distributor knows the total volume of any drug distributed in a particular state or region, let alone to a particular pharmacy. That information is known to DEA, however. McKesson for years has reported every controlled substance transaction in West Virginia and across the country to DEA, and DEA gathers similar information from other distributors, in a proprietary DEA database called Automation of Reports and Consolidated Orders System 3 (“ARCOS”). Neither McKesson nor the other distributors have access to ARCOS. Only DEA has visibility over the entire landscape and can track and analyze aggregate data on the distribution of controlled substances in particular jurisdictions.”

Mr. J. Christopher Smith, Former President and CEO, H.D. Smith Wholesale Drug Company, said, “We fully trust that H.D. Smith’s new owner, AmerisourceBergen, will handle its business responsibly. We also strongly believe that the DEA can help distributors be part of the solution to the opioid crisis by collaborating more and sharing information with the industry. Without help from the DEA, and particularly guidance about the reporting of suspicious orders, distributors cannot make complete assessments about pharmacies’ purchasing habits, and are, therefore, limited in their ability to detect suspicious orders.”

Rep. Brooks listens to Mr. Smith’s responses to her questions

But a line of questioning with Rep. Susan Brooks (R-IN) indicates that distributors know more than they’ve let on. Citing employee emails obtained as part of the committee’s investigation, Rep. Brooks posed a number of questions to Mr. Smith, including whether or not they reported to the DEA that one physician was responsible for 51 percent of the hydrocodone prescriptions filled by Family Discount, a pharmacy in West Virginia. Mr. Smith replied, “I’m not sure what the timing of what we would have reported to the DEA was.”

Rep. Brooks continued with her questioning, flagging an email from a H.D. Smith employee who noted this pharmacy’s satellite location had reached its hydrocodone threshold only 12 days into a month. When asked if Mr. Smith or H.D. Smith knew this information, he said he was unaware. When asked if his company reported the suspicious activity to the DEA, Mr. Smith responded saying, “I do not know.”

DEA Acting Administrator Robert Patterson testified before #SubOversight in March 2018. During that hearing, Acting Administrator Patterson said the ARCOS data was “an extremely manual process” before 2010. In his answers to #SubOversight Chairman Harper, Acting Administrator Patterson vowed that their “system has gotten more robust and certainly through the last handful of years we’ve used that in a much more proactive manner.”

Bipartisan committee leaders first requested information from the nation’s “top three” distributors – AmerisourceBergen, Cardinal Health, and McKesson – on May 8, 2017. In September 2017, the committee probed a fourth distributor, Miami-Luken. In January 2018, the committee sent a follow-up letter to Miami-Luken and probed a fifth distributor, H.D. Smith. In February 2018, the committee sent follow-up questions to AmerisourceBergen, Cardinal Health, and McKesson. For a full timeline of the committee’s bipartisan investigation, click here.

The Majority Memorandum, witness testimony, and an archived webcast are available online here.