‘Business decision’: Former DEA official works for opioid lawyers but set standards for how many pills were made
Rannazzisi
Asked what would’ve happened if a pharmaceutical distributor wanted advice on whether a large order of opioids was suspicious, the man in charge of federal regulation of those pills for 10 years said he wouldn’t have helped.
Instead, Joe Rannazzisi, who set always-increasing opioid quotas for the industry while he headed a Drug Enforcement Agency department from 2005-15, said the company would be left on its own to figure it out.
“So if a distributor came to you in (2007-2010) and said, ‘We… can’t tell if this order is legitimate or suspicious,’ DEA would refuse to answer?” he was asked at a deposition this year.
“It’s DEA’s policy that they do not advise when to ship or when to file a suspicious orders. That’s a business decision that, under the regulations, is maintained by the distributor,” Rannazzisi said.
Now, Rannazzisi is helping private lawyers pin the blame squarely on manufacturers and distributors of opioids, as well as pharmacies. A post-DEA alliance with trial lawyers has been worth six figures for Rannazzisi, who has been hailed as a whistleblower by those cheering attempts to prosecute the opioid industry for the nation’s addiction crisis.
His national profile rose one weekend in October 2017 when he appeared on “60 Minutes” and was the subject of a Washington Post profile, complaining that Congress and corporations sabotaged efforts to regulate how many opioids were being made available.
(“60 Minutes” famously also played a role in tobacco litigation in the 1990s, to which the opioid cases are frequently compared.)
Rannazzisi has admitted he is consulting for plaintiffs lawyers who are chasing their shares of possibly billions of dollars in fees. Details emerged this year at a deposition in the federal opioid multidistrict litigation, which consists of nearly 2,000 lawsuits brought by cities, counties and American Indian tribes, as well as other entities.
Lawyers for the companies being sued challenged his actions while in office pointing out the dramatic increases in quotas for painkillers set by the DEA and its unwillingness to help companies that sought advice on whether an order was suspicious.
In 2016, he was approached by attorney Richard Fields, who found major success in asbestos and breast implant litigation by taking on the insurance companies that issued policies to the corporate defendants.
Rannazzisi was hired as a consultant for Fields’ opioid team at $500 an hour. He testified that he has made more than $100,000, but less than $250,000.
Other sources of income include a one-time agreement with Motley Rice, which snagged a part on the opioid leadership team, to help with data from a federal database, and speaking fees.
“If it’s a parents group that lost children or loved ones, it’s free,” he said. “They pay me to come out and talk and – they pay me my expenses so they will pay my flight. Generally, I don’t even take hotel.
“If it’s a group of doctors, it might be anywhere from $2 to $5,000… (I)t just depends on the group and it depends on what they could pay.”
Asked what is the most he’s charged for a speaking engagement on the opioid crisis, he said it was $5,000.
Rannazzisi still has copies of DEA documents, having been told he couldn’t get rid of them yet. He denies sharing them with the Post and “60 Minutes.” He also says he hasn’t shared them with plaintiffs lawyers.
Fields, meanwhile, has few clients in the MDL when compared to some of his plaintiff lawyer colleagues – he represents just a handful of American Indian nations.
He does have the State of Delaware as a client, though. State cases are being heard in state courts, and the first state trial shows how lucrative that can be.
Private lawyers in Oklahoma have scored $80 million from settlements and stand to make another $90 million should a verdict against Johnson & Johnson be affirmed.
Delaware hired Fields and three other teams, referred to as the “Fields Team” in the contract, on a tiered contingency fee. It starts at 21% for recovery up to $50 million, then slides down a few percentage points for each $50 million added.
And Fields’ opioid lawsuit on behalf of the Cherokee Nation was the first to name pharmacies as defendants. In Congressional testimony, he said distributors were operating under the misconception that they had a quota to fill.
“This is an industry that allowed millions and millions of drugs to go into bad pharmacies and doctors’ offices, that distributed them out to people who had no legitimate need for those drugs,” Rannazzisi told “60 Minutes.”
There’s no denying the rise of opioids since the 1990s, but the question facing judges is who to blame. Private lawyers and the government officials who have hired them on a contingency fee basis contend that manufacturers, distributors and pharmacies ignored red flags and made it easier for addicts to get their hands on pills like OxyContin.
A popular defense is that the dispersal of opioids was regulated and federal officials approved what was happening. The combined quotas for oxycodone and hydrocodone nearly tripled from 2005-2015, when Rannazzisi was director of the DEA’s Office of Diversion Control.
The ODC increased the number of registrants allowed to prescribe and dispense opioids to more than 1.6 million under Rannazzisi, an increase of 45%. At the same time, the ODC took in registration fees that helped fund the department’s $300 million budget while more than 176,000 Americans died from their addiction.
In 2017, Democrat senators (including Dick Durbin) targeted DEA quotas, which rose every year Rannazzisi was in office. It took until 2018 for the DEA to issue a rule that requires it to consider the potential for abuse when it considers yearly quotas for production of prescription drugs.
Once the DEA sets quotas, it allocates a portion of them to the registered companies. Also at its disposal to track where opioids are going is a database called ARCOS which, Rannazzisi testified in 2007, was being used to identify excessive volume purchases.
Defense attorneys attempted to make the point, though, that the DEA under Rannazzisi rejected requests from companies that wanted to see their own ARCOS data, which could have aided in finding suspicious orders.
“Would you agree that access to ARCOS helps registrants combat diversion of controlled substances?” he was asked.
“Not necessarily,” he answered. “Because industry had other tools at their disposal to see downstream transactions that were not listed as business or proprietary.”
Rannazzisi said he did not know if those other tools include information contained within ARCOS.
As to the rise in quotas, defense attorneys pointed out that in the year Rannazzisi took office, the quota for hydrocodone was 37,604 kilograms. In his last year, Rannazzisi helped set the quota at 99,625 kilograms.
For oxycodone, the 2005 quota was 50,490 kgs. By 2015, it was 137,500 kgs.
“Now, by increasing the quota year after year, DEA was telling registrants and the public (that) pain medication should be available to support the legitimate medical needs; isn’t that correct?” he was asked.
“No. That’s not correct,” he said.
Rannazzisi shifted the blame for not flagging suspicious orders to the companies he was monitoring.
“And it was DEA’s policy not to tell registrants than an order is or is not suspicious, correct,” he was asked.
“Well, that’s a business decision that only the… distributor could make. They’re the only ones who know their customer. And they know what their customers are doing. And they know the… population around the customer’s business. They know what is in the area that could warrant an increase or not.
“So, DEA couldn’t make that decision. It had to come as a business decision from the distributor.”
The attorney asked, “So it was DEA’s policy not to tell registrants that order is suspicious?” and Rannazzisi reiterated his previous answer.
Asked why the DEA didn’t tell registrants to stop sales, he said there were “due process concerns.”
From Legal Newsline: Reach editor John O’Brien at john.obrien@therecordinc.com.
Filed under: General Problems
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