Opioid Crisis Prompts Lawsuits and Tighter Regulation of Pharmacy Industry
With the opioid crisis sweeping the country, cities, counties and states are filing suits against the various players in the pharmacy industry – including manufacturers, wholesalers and retailers.
About two dozen suits have been filed since 2016, with more likely on the way. That’s according to Mark Bina, a partner in Quarles & Brady’s Litigation, Dispute Resolution and Health Law Practice groups, who spoke at the firm's 3rd Annual Pharmacy Law Symposium in Chicago.
Bina noted the scope of the problem: Federal statistics show approximately 180,000 deaths due to overdoses on prescription narcotics since 2000 – an amount that Bina noted surpasses U.S. wartime losses in recent military conflicts. In response, local governments are retaining plaintiff firms to file lawsuits, citing the mounting costs of local jails, methadone clinics and even picking up needles at public parks, Bina said.
The City of Chicago; St. Clair County, Illinois; Mississippi; Missouri; Ohio and Oklahoma, several local governments in California and West Virginia and even the Cherokee Nation have filed suit. Another 35 similar suits will likely be filed in the coming months, based on comments plaintiff’s lawyers are making, even “bragging” about, on their web pages, Bina said. This approach – and possible endgame – is similar to what happened in an earlier era regarding Big Tobacco, Bina said.
“Start filing so many of these things that the manufacturers are going to say, ‘Look, we’re going to all have to get in a room to work this out with all the various [attorney generals] because we’re getting hit from all sides,’” Bina said. “That’s the only way some of these local governments think the epidemic can be solved.”
Bina noted a startling recent move made by a county government in West Virginia, which sued the state’s Board of Pharmacy, among other entities, for alleged failure to put in place effective controls to present massive distribution of opioids. The county alleged the pharmacy board “failed in all regards” to stop the “feeding frenzy” of the distributors and pharmacies.
But prescribing doctors have not been named as defendants, Bina said. Plaintiff's lawyers have said that doing so would risk bringing up patients’ legitimate medical needs, which could provide fodder for a defense or at least confusion in the courtroom.
“That gets too hard in front of a jury,” Bina said. Plaintiff's lawyers “want to make this very simple.”
Bina discussed several other trends facing the industry:
- Disciplinary actions by state Boards of Pharmacy revolve around the “usual suspects” of unprofessional conduct, record-keeping violations, consumer complaints, technician theft, diversion, inspection issues, adulteration, drug utilization reviews and counseling. It’s difficult to quantify precisely, Bina said, but he believes activity is up – particularly in the area of sister state discipline.
- More fines and investigations are emerging from state Medicaid Fraud Control Units (MCFU), with 998 convictions in 2016. “If I’m doing my math right, in the time I’ve been standing here we’ve already had a settlement or a conviction somewhere in the country involving a provider who is submitting Medicaid claims,” Bina said, noting that these totals cover all provider types and amounted to $1.9 billion in recoveries in 2016.
- Bina said that state MCFUs spend $258 million a year on investigations and operations and recover $1.8 billion. Given the potential for a high return on investment – and a high need for cash in fiscally challenged states like Illinois – Bina said some state governments could increase their investigations. “I would expect as these recoveries continue to come in … I think that’s where you’re going to see a lot more activity,” he said.
- Pharmacy activity regarding HIPAA has been low lately, especially compared with other providers
--which Bina chalked up to strong compliance efforts. “The cost of not complying certainly outweighs the cost of compliance,” he said. However, he cited a case stemming from a local TV report that showed documents containing patient information had not been shredded before they were disposed of by a pharmacy in Denver. “Don’t put stuff in Dumpsters – just good general advice,” Bina said.
- Bina also discussed the methods used by the Centers for Medicare & Medicaid Services (CMS) for determining if a provider is engaging in fraud regarding fee-for-service claims. The methods are similar to those used by credit card companies. “This is the same technology that the federal government is now using to come after you,” he said.