In Opioid Epidemic First, Drug Company Executive Charged With Conspiracy
NEW YORK (CBSNewYork/AP) — For the first time in the nation's opioid crisis, criminal charges have been filed against a drug company executive who's accused of illegally distributing prescription drugs.
Laurence Doud III, the retired CEO of the Rochester Drug Co-Operative, operated in the fringes of the drug business, obliterating red flags to turn his small New York firm into a supplier of last resort for independent pharmacies whose dubious practices got them cut off by other distributors, an indictment unsealed Tuesday alleges.
Apparently in pursuit of bigger profits for the company and fatter bonuses for himself, Doud encouraged his sales force to sign up new customers with no questions asked, picking up competitors' rejects as he boasted that his company was "the knight in shining armor" for independent pharmacies, the indictment said.
When Rochester's largest customer went from buying 70,000 units of oxycodone per month in October 2012 to more than 200,000 units per month a year later, Doud had its back — overruling his own compliance officers and ordering that the pills keep flowing because it was a "big account," the indictment said.
Doud, 75, surrendered to authorities in New York City and is awaiting arraignment on two counts of conspiracy related to drug trafficking. His lawyer said he would fight the charges. Doud, who retired in 2017, alleged in a lawsuit last year that Rochester Drug Co-Operative tried using him as a scapegoat for its legal and regulatory troubles.
If convicted, Doud faces a mandatory minimum sentence of 10 years in prison, U.S. Attorney Geoffrey Berman said.
"From 2015 to 2017, it shipped tens of millions of highly addictive oxycodone pills and fentanyl products to pharmacies that it knew were illegally dispensing narcotics," Berman said.
Doud's criminal charges added a new twist to efforts to hold companies and people responsible for the opioid crisis. Other companies and executives have faced lawsuits from a growing list of state and local governments looking to hold them accountable for an epidemic that led to more than 70,000 deaths in 2017.
Last month, New York sued a number of industry players, including the billionaire family behind the company that created OxyContin. The Sacklers have given tens of millions of dollars to cultural institutions, but museums in London and New York have taken their name down as controversy grew over their company, Purdue Pharma.
The state lawsuit also named Rochester as a defendant, along with its Fortune 500 competitors Cardinal Health, AmerisourceBergen and McKesson — which gave its CEO an $18.1 million compensation package in 2017.
From 2012 to 2016, Rochester's sales of oxycodone tablets skyrocketed from 4.7 million to 42.2 million — an increase of about 800% — and its fentanyl sales soared from approximately 63,000 dosages in 2012 to more than 1.3 million in 2016 — an increase of about 2,000%. During the same period, the company's internal compliance office flagged 8,300 orders but reported just four to the U.S. Drug Enforcement Administration.
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