In February 2011, a pharmacy in Dundalk asked the drug distributor McKesson to increase its monthly order limit on oxycodone pills by 40,000.
McKesson approved the request within five minutes.
The pharmacy, Drug City, was at that point receiving more than 200,000 oxycodone pills per month — more than twice what the average pharmacy nationwide ordered in an entire year, a former Drug Enforcement Administration manager testified Tuesday.
In all, McKesson sold 11.6 million prescription painkillers to Drug City in less than six years. The business was McKesson’s top oxycodone customer nationwide among independent pharmacies.
“There’s no reasonable explanation that I can imagine that would explain this amount in a city the size of Baltimore,” said the ex-DEA manager, Ruth Carter, who is a key expert witness for the city in its landmark trial against drug companies accused of fueling the opioid epidemic.
“It’s shocking, really,” she said.
The distributors on trial, McKesson and AmerisourceBergen (now known as Cencora) are accused of failing to halt suspiciously large orders of opioids before they reached Baltimore-area pharmacies. The city claims that the huge influx of prescription opioids the companies shipped into Baltimore — 240 million sent to Baltimore and Baltimore County between 2006 and 2019 — contributed to the ongoing addiction and overdose crisis plaguing the city.
The companies say they followed the law when they shipped legal painkillers to registered pharmacies to fill prescriptions written by licensed doctors, and that any diversion of the drugs happened after the pills left their control.
But through Carter’s testimony, the city is working to show jurors that the companies did not live up to even their most basic regulatory obligations. Drug distributors, which buy medications from manufacturers and sell them to pharmacies and hospitals, are required to monitor for suspicious orders of controlled substances, report problem orders to the DEA, and block those medications from shipping.
Carter concluded that neither company did an adequate job stopping opioids from being diverted from legal channels. Her testimony will continue Wednesday.
“These are very dangerous drugs and they kill people,” Carter said. “The responsibilities have to be taken seriously.”
In the case of Drug City, McKesson repeatedly approved increases to its oxycodone limits until the pharmacy was receiving as many as 273,000 pills per month, the highest threshold in the nation among independent pharmacies, according to internal emails shown in court.
McKesson’s Baltimore sales rep, who was responsible for submitting the threshold change requests, listed the same reason each time: increased business. The sales rep also received financial incentives for selling more products, Carter said.
Drug City was filling prescriptions from across Baltimore and Baltimore County, including from the Rosen-Hoffberg Rehabilitation and Pain Management Practice in Owings Mills and Towson. The clinic’s leaders, Norman Rosen and Howard Hoffberg, would later be criminally charged. Rosen-Hoffberg’s pain clinic was a top source of prescriptions filled at what the city argues were problem pharmacies.
There were other red flags at Drug City, Carter said. The pharmacy’s ratio of controlled substances compared to all medications was unusually high, and the pharmacy’s then-owner reported that he sometimes hired off-duty police officers to stop people from selling prescriptions in the parking lot.
McKesson went about five years without reporting any suspicious orders from Drug City, Carter testified. McKesson terminated Drug City as a customer in 2012, five months after the DEA asked for the pharmacy’s sales records.
“They were just giving them as much oxycodone as they wanted,” Carter said.
Drug City and its former owner reached a $900,000 settlement with the DEA in 2016 for dispensing controlled substances to people that the company “should have known were diverting the drugs.” An email to a lawyer for the pharmacy was not immediately returned late Tuesday afternoon.
McKesson also shipped about two million hydrocodone pills to a business that operated out of a windowless brick building in East Baltimore, NewCare Pharmacy, Carter told jurors.
The business was actually an illegal internet pharmacy that sold millions of pills without legitimate prescriptions, federal prosecutors would later allege.
“That’s an egregious amount of hydrocodone to send to a pharmacy,” Carter said. “And this wasn’t even a pharmacy.”
NewCare’s owners each received five years in prison for their roles in the scheme. McKesson agreed to pay a $13.25 million fine as part of a settlement agreement with the U.S. Department of Justice over sales of controlled substances, including to NewCare.
McKesson had received a subpoena from the DEA for its sales to NewCare in November 2005, Carter testified, and continued sending pills to the pharmacy for another 11 months before terminating the business as a customer.
The company’s monitoring programs were supposed to identify orders of unusual size, frequency or pattern. A pharmacy that usually ordered 5,000 oxycodone pills a month suddenly asking for 20,000, for example, should have set off alarm bells, Carter said.
The DEA also warned drug distributors to be on the lookout for other red flags, such as controlled substances making up a disproportionately large percentage of a pharmacy’s medication orders.
As part of the 2008 NewCare settlement, McKesson agreed to implement a compliance program that would prevent the diversion of controlled substances, something that was already required under federal rules.
Even so, McKesson did not perform due diligence on pharmacy sales in the years that followed, Carter said, including at Drug City and other Baltimore-area pharmacies. Bayview Pharmacy, also in East Baltimore, received 3.3 million oxycodone pills from McKesson between 2006 and 2013, peaking at 600,000 pills per year, Carter testified.
In 2012, McKesson’s internal data showed that controlled substances made up nearly 65% of all the prescriptions filled at Bayview. Oxycodone was about 39% of all prescriptions filled there. The rates were slightly lower, but still above average, at a pharmacy in Baltimore County owned by the same person.
“That’s past being a red flag,” Carter said.
McKesson ultimately terminated both pharmacies as customers in 2013, after a drug manufacturer notified McKesson that it was reviewing the pharmacies’ practices. Almost eight months after receiving that notification, a member of McKesson’s regulatory staff visited Bayview Pharmacy, Carter testified.
The owner of the pharmacy would later recall that the McKesson employee showed up in a Hawaiian shirt and flip-flops and complained about disliking Baltimore during the visit, Carter said.
McKesson settled with the DEA again in 2017 for a record-setting $150 million. The company agreed that it had failed to maintain effective protections against the diversion of controlled substances, including opioids, and failed to report suspicious orders to the DEA.
