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Report: Prosecutors Use Controlled Substances Act To Investigate Opioid Makers, Distributors

Federal prosecutors are using laws they normally would use to prosecute drug dealers in a criminal investigation of drugmakers to determine if they intentionally allowed communities to be flooded with opioids, according to a news report.

Citing people familiar with the matter, The Wall Street Journal reported that the prosecutors in New York had opened a criminal investigation into several companies to find whether they had violated the Controlled Substances Act. The unnamed sources told the newspaper that grand jury subpoenas reported in regulatory filings by at least six companies – Teva Pharmaceutical Industries, Mallinckrodt, Johnson Johnson, Amneal Pharmaceuticals, AmerisourceBergen and McKesson – were connected to the investigation. The latter two companies are among the largest drug distributors in the country, while the others are drug manufacturers. Subpoenas for additional companies are expected in the coming months.

The investigation is in addition to litigation comprising lawsuits filed by more than 2,300 municipal, county and Native American tribal governments from around the country over the defendants’ alleged role in creating the opioid crisis. The multi-district litigation, known as MDL 2804, includes another distributor, Cardinal Health, as well as retail pharmacy companies, and is taking place in the U.S. District Court for the Northern District of Ohio in Cleveland.

Last month, Teva and the three distributors reached an 11th hour $260 million settlement that would enable them to avoid a trial, and it was previously reported that the distributors were in talks to settle the litigation for $18 billion. Other companies involved in the litigation had also been seeking settlements, and it was reported that Purdue Pharma – maker of the long-acting opioid painkiller OxyContin (oxycodone) – was seeking to resolve the litigation by filing for Chapter 11 bankruptcy and paying billions of dollars over the course of several years.

In another case, a judge in Oklahoma had ordered Johnson Johnson to pay $572 million in August after finding that the company had created a “public nuisance” by helping to fuel the opioid crisis in the state, but it was subsequently determined that he had made a computational error after the company appealed the ruling. A $107 million charge was thus reduced to $107,000.

Photo: Moussa81, Getty Images

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