U.S. prosecutors have subpoenaed at least four pharma companies and two distributors asking for documents related to opioid anti-diversion and monitoring programs under the Controlled Substances Act. The investigative demands came from a grand jury in the Eastern District of New York.The investigation, first reported by the Wall Street Journal, represents a new phase of legal scrutiny into the pharma sector’s opioid sales and marketing practices. Most government action so far has taken place in civil courts, but the new investigation could yield criminal charges.Three of the companies named so far in this probe have reached a $260 million settlement with two Ohio counties to resolve federal lawsuits that their practices led to overprescribing and a wave of addiction that has burdened public health programs.
The companies named so far are Teva Pharmaceutical, Mallinckrodt, Johnson & Johnson, Amneal Pharmaceuticals, and the distributors AmerisourceBergen and McKesson.
Representatives from Amneal, Teva, Mallinckrodt, Amerisource and McKesson confirmed the investigation, as disclosed in company filings with the Securities and Exchange Commission. J&J did not respond to emails requesting comment, nor did a spokesman for the U.S. attorney’s office.
Subpoenas were delivered to the companies in a span between April and August. The companies are saying they will cooperate with the probe.
Opioid overdoses claimed 47,600 lives in the U.S. in 2018, according to the Centers for Disease Control and Prevention. Medicaid spending on drugs related to opioid addiction or overdoses reached nearly $1 billion in 2016, a cost that states and municipalities have used to justify civil claims against drug manufacturers and distributors.
The bellwether civil action focuses on the Ohio counties of Summit and Cuyahoga, where Endo and J&J have reached $10 million and $20 million settlements individually, and later Teva joined AmerisourceBergen, Cardinal Health and McKesson in a $260 million settlement.
Teva has reached an agreement in principle to donate $23 billion worth of the addiction treatment Suboxone and promised to pay $250 million over 10 years to four states that had sued it.
U.S. criminal charges would raise more uncertainty for the companies under scrutiny, especially Teva, which is struggling under a mountain of debt. Purdue Pharma and Insys Therapeutics have declared bankruptcy this year under the weight of civil actions.
