A New Tactic: Drug Trafficking Charges for Big Pharma

The U.S. Attorney’s Office of the Southern District of New York recently took the extraordinary step of going after what is commonly referred to as “Big Pharma.”


This action has been intentionally or unintentionally percolating for 28 years.


Sending Shockwaves through the Industry


“[These] charges should send shockwaves throughout the pharmaceutical industry reminding them of their role as gatekeepers of prescription medication.”

Ray Donovan, DEA Special Agent in Charge


Rochester Drug Cooperative (RDC), a major U.S. drug distributor, faces criminal charge leveled against the company’s top executives including charges of conspiracy to distribute drugs and defraud the government.


Charging documents reveal skyrocketing increases in oxycodone (from 4.7 million to 42.2 million doses) and fentanyl (1.3 million to 63 million doses) over a four-year period—explosive increased that effectively doubled the former CEO’s earnings.


The feds are also suing RDC for ignoring DEA reporting requirements for suspicious orders – unexpected or large orders, cash payments, out of the ordinary requests or practices, and so on.


The company’s chief compliance officer says he warned executives about the suspicious orders, but they were processed anyway. He has reached a plea deal with the government and is currently working with federal prosecutors, likely in exchange a more lenient sentence.


In the meantime, the indicted CEO has pleaded not guilty to charges that expose him to a 10-year mandatory minimum sentence up to life imprisonment term without parole if convicted.


The company itself has already agreed to pay a $20 million fine.


Why does these indictments have DEA Agent Donovan talking about “shockwaves”?


Because they mark this as the first time criminal trafficking charges have been brought against a Big Pharma executive. It’s uncharted territory for both the government and defense counsel.


That makes one thing certain – the defendants are going to need an experienced federal drug trafficking defense attorney.


Federal Drug Trafficking


To illustrate the situation the defendants find themselves in must begin with a look at the volume of just one of the controlled substances they are charged with unlawfully distributing, and the penalties they may face if sentenced like any other street dealer.


Federal Drug Trafficking Attorney

To support this illustration, we turn to the Mayo Clinic’s guidelines for a single dose of Oxycodone (9 mg), and total doses sold in the most recent year (42.2 million). That equals 379.8k grams of Oxycodone trafficked. This controlled substance is a Schedule II narcotic due to its high potential for severe physical and psychological dependency and abuse.


Federal penalty guidelines dictate up to 20 years prison time and a fine of $1 million for an individual ($5 million if not an individual) on a first offense. If death or serious bodily injury is proven to have occurred due to the trafficking, the offender could get a life sentence.


Fentanyl, a Schedule IV drug, could be handled as a separate charge, exposing the executives to five years and a quarter-million in fines individually (up to $1 million together).


Committing Federal Conspiracy Crimes


As far as defrauding the government, ignoring suspicious ordering activities for the sake of profit, and then actively and knowingly violating DEA reporting requirements makes it more than likely that the government will push its prosecutorial conspiracy theme.


So, what about RICO?


While RICO laws target all sorts of corrupt enterprises, this is the first time the government has the law to set its sights on Big Pharma.


As the former chief compliance officer continues to cooperate with prosecutors, only time will tell whether additional charges will surface.


U.S. Attorney Geoffrey S. Berman has informed the public that, “[his] office will do everything in its power to combat this epidemic, from street-level dealers to the executives who illegally distribute drugs from their boardrooms.”