Northern District of Ohio Judge Dan Polster, boldly asserting that he would attempt to resolve the opioid crisis because federal, state and local governments had failed to do so — presided over a wide-ranging status conference on January 11 in the opioid MDL assigned to him.

In November 2017, a panel of federal judges decided to combine the more than 100 separate actions filed by various local government agencies against the pharmaceutical industry into a single Multi District Litigation in the Northern District of Ohio.  The case was assigned to Judge Dan Polster, a former federal prosecutor and twenty year veteran of the federal bench who plainly announced that he intended to extract a quick and global settlement in the actions so that the harms caused by the opioid crisis, including insufficient treatment resources could be addressed.

In a hearing surprising for its candor and attention to the bottom line, Judge Polster apportioned blame for the current crisis to every party involved, including the government plaintiffs, noting that each shared responsibility for causing the crisis, which he dubbed “100% man made.”  He portrayed the federal court system as an illogical place to solve the crisis but indicated his determination to do the job because all of the other parties had failed, telling the assembled lawyers that “I intend to do something meaningful to abate this crisis and to do it in 2018.”

At Wednesday’s status conference, the judge exhorted the parties to settle quickly so that resources could go where needed.  He and Magistrate Judge David Ruiz, acting as special master, met separately with the plaintiffs and defendants to discuss the relative merits and weaknesses of the case as he saw them.  According to participant at the hearing, the judge is somewhat uninformed about the details of the closed system of distribution through which opioid sales are made, and is considering holding an “information day” at the end of this month so that the parties can provide relevant information about drug manufacture and distribution to the court.  In what is perhaps an indication of how wide-reaching Judge Polster considers his duty to resolve these cases and end the crisis, he indicated that he would urge the Drug Enforcement Administration to attend the information session and give its views.  He also invited two separate sets of state Attorneys General to participate in the information day hearing and consider participating in settlement discussions so that defendants would not have to fear successive lawsuits by non-party states after the MDL settled.

It remains to be seen whether Judge Polster can rein in a case this large with parties this disparate.  He is determined to try though, and has put a deadline on his efforts.  He announced that if the parties had not settled the suits by the end of the year, he would try the cases brought by the Ohio plaintiffs as a single bellwether trial in 2019.

In a separate but related development, on January 9, 2018, Judge Terence Kern, a federal judge in Oklahoma, granted an injunction halting a first-of-its-kind lawsuit by the Cherokee nation filed in Tribal Court.  Judge Kern held  that the Cherokee Nation Tribal Court lacked jurisdiction to hear claims asserted against the nonTribal defendants including the big three distributors as well as three national retail drug chains.. He enjoined the Attorney General of the Cherokee Nation and the judge assigned to the case in Tribal Court from allowing the Cherokee Nation’s case to proceed.

Last week, President Trump declared the opioid crisis a public health emergency. The President’s opioid Commission has now issued its final report with recommendations on how to combat the country’s drug crisis. While both important, neither have a significant impact on law enforcement efforts to address the crisis. That impact will likely come from public reaction to reports suggesting that a 2016 law stripped the Department of Justice (“DOJ”) and Drug Enforcement Administration (“DEA”) of certain police powers to enforce the nation’s drug laws.

Congress passed the Ensuring Patient Access and Effective Drug Enforcement Act (the “Act”) in the Spring of 2016 with little fanfare, and with unanimous consent in the House and Senate. Over one year later, the Act is the subject of great debate and the source of tension among lawmakers, law enforcement, pharmaceutical manufacturers, distributors and wholesalers, and public health advocates.

Before the Act’s passage, DEA regulations permitted the DEA Administrator to issue an immediate suspension order (“ISO”) of a DEA-registered business or health care provider where there was an “imminent danger to the public health or safety.” However, “imminent danger” was not defined, and was subject to loose and inconsistent interpretation. In seeking ISOs, DEA conducted historical analyses of a registered entity’s sales and would claim that the volume of orders, coupled with a failure to report suspicious orders, constituted the requisite “imminent danger” to the public. This finding, which was not subject to judicial review, would temporarily strip a registered business or health care provider of its license to manufacture, distribute or dispense controlled substances pending a hearing before a DEA administrative law judge. Unhappy that DEA could claim “imminent danger” based on past practices, without regard to remedial measures the registered business might have taken, industry lobbyists urged lawmakers to enact a statute that would more clearly define “imminent danger”[1] and would allow a company to present a remedial action plan prior to the imposition of an immediate suspension order.

Critics, led by a former DEA insider-turned-whistleblower, whose allegations were aired in a recent 60 Minutes-Washington Post report, say that the new Act eviscerated DEA’s ability to stop the illegal flow of addictive opioid medications to the public. They claim that “[t]he new law makes it virtually impossible for the DEA to freeze suspicious narcotic shipments from the companies.[2] Similarly, advocates for increased government crack-downs argue that the Act’s new meaning of “imminent danger” and heightened evidentiary standard requires DEA to pierce through “too many levels between distributors and manufacturers to logically establish any causation of death, serious bodily harm, or abuse to a specific patient down the chain to support” an ISO. [3] The reaction to the whistleblower’s allegations was explosive. Among other things, it led to the withdrawal of President Trump’s nomination of Representative Tom Marino of Pennsylvania, a sponsor of the Act, to be the nation’s next drug czar. There is surely more fallout from the Sixty Minutes-Washington Post piece, and it will likely result in scaling back of the Act.

Meanwhile, the President’s Commission on Combating Drug Addiction and the Opioid Crisis (the “Commission”), which will release its final report tomorrow, recommended numerous enforcement measures to combat the opioid epidemic. For example, the Commission suggests that DEA require prescribers to participate in continuing education to better understand the potential for drug misuse before their registrations to prescribe opioids can be renewed. In addition, the Commission urges the President to endorse the federal Prescription Drug Monitoring Act, which requires states that receive federal grants to track and actively manage controlled substances through a state-wide prescription drug monitoring program (“PDMP”). As an alternate to enforcement, the Commission also calls for drug courts in every federal district nationwide. The Commission expects that drug courts will advance individuals’ treatment and recovery efforts, while saving enforcement efforts for those in the medical supply chain that manufacture, distribute, prescribe and dispense large volumes of opioids in the first instance. Finally, the DOJ has leaned on its Corporate Fraud Strike Force and the Opioid Fraud and Abuse Detection Unit to ferret out opioid-related health care offenses and to hold responsible actors accountable.

As the DOJ and DEA retool and consider new enforcement measures, the following industry participants must remain alert:

Doctors: DOJ and DEA will prioritize identifying doctors who overprescribe opioids or who prescribe them without a legitimate medical purpose. Both agencies are well-equipped to seek out not only doctors who overprescribe opioids by providing weeks’ worth of pills when only a few days are necessary, but also other doctors who operate lucrative “pill mills” that distribute opioids for non-medical reasons.

Pharmacists: Pharmacists are on the front line of providing medical care and have a corresponding responsibility to ensure that prescriptions are legitimate. Accordingly, pharmacists must exercise a high degree of professional judgment when assessing a patient’s condition and that patient’s need to use opioids to treat a condition. Pharmacists should be familiar with PDMP systems and know how to balance patient pain with overprescribing opioids. Concomitantly, chains that employ pharmacists have an obligation to educate and train their pharmacists on the safe use of opioids and the potential for misuse and abuse and will bear responsibility for a pharmacist’s failure to detect illegitimate opioid prescriptions.

Manufacturers and Wholesalers: DOJ and DEA will continue to monitor large pharmaceutical companies’ business practices to identify any drug makers who illegally incent doctors to overprescribe opioids, commit fraud on insurance companies, employ deceptive marketing techniques that deceive patients, or who fail to detect and report suspicious orders.

In sum, the opioid crisis, while largely viewed as a health crisis, has important enforcement impacts that are likely to affect industry in a number of ways.

[1] 21 U.S.C. § 824(d) (2016). Specifically, the Act requires that DEA prove that “there is a substantial likelihood of an immediate threat that death, serious bodily harm, or abuse of a controlled substance will occur in the absence of” an ISO.
[2] Scott Higham & Lenny Bernstein, “The Drug Industry’s Triumph Over the DEA,” The Washington Post (Oct. 15, 2017),
[3] John J. Mulrooney, II & Katherine E. Legel, Current Navigation Points in Drug Diversion Law: Hidden Rocks in Shallow, Murky, Drug-Infested Waters, 101 Marq. L. Rev. (forthcoming Feb. 2018).

Under the federal Controlled Substances Act, DEA registrants are required to prevent the diversion of controlled substances outside the closed system of distribution that governs and licenses those entities and individuals who can manufacture, distribute, dispense and prescribe controlled substance medications.  One of the hallmarks of the closed system of distribution is the duty of all registrants to detect and prevent suspicious orders.  Beginning in 2007, the DEA began to place great emphasis on wholesale distributors, a relatively small class of DEA registrants, and began imposing on those distributors more real-time responsibility in monitoring and stopping potentially suspicious orders.

Between 2007 and 2016, DEA brought a number of administrative and civil actions against wholesale distribution companies for failing to adequately monitor and prevent suspicious orders of controlled substances, revoking the DEA licenses of various distribution warehouses and collecting hundreds of millions of fines in the ensuing years.  With the increasing public health crisis caused by opioid addiction, DEA and the courts have ramped up its enforcement efforts with increasingly harsh results.

One such example of the increased pressure on distributors is the case of Masters Pharmaceuticals v. DEA, decided June 30, 2017.  In that recent case, the DEA sought to revoke Masters’ registration as a wholesale distributor for its failure to report suspicious orders to DEA.  Masters fought back, trying the case in DEA’s administrative courts, and then appealing the matter to the U.S. Circuit Court of Appeals for the District of Columbia.  In a blow not just to Masters but to DEA-registered wholesale distributors everywhere, the court found in the DEA’s favor.  And, in an opinion unmistakably influenced by the current prescription drug crisis, it announced an interpretation of the regulations regarding suspicious order monitoring that will require almost all wholesale drug distributors, many of which already had robust monitoring systems in place, to change their processes for reporting suspicious orders.

It is doubtful that this increased reporting will actually benefit DEA.  The result of Masters is that while the volume of reports will increase, the quality of those reports will necessarily decrease.  Rather, companies now have to report the results of their automated monitoring processes rather than those that highly experienced regulatory staff evaluated in a qualitative matter.  DEA has neither the time nor resources to evaluate the magnitude of orders that it will receive given Masters.  That helps no one.