THE UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF WISCONSIN

MILWAUKEE COUNTY, WISCONSIN

)
)
)
)

Plaintiff, )
)
v.
)
)
AMERISOURCEBERGEN DRUG
)
CORPORATION; CARDINAL HEALTH,
)
INC.; McKESSON CORPORATION;
)
PURDUE PHARMA L.P.; PURDUE
)
PHARMA, INC.; THE PURDUE FREDERICK )
COMPANY, INC.; TEVA
)
PHARMACEUTICAL INDUSTRIES, LTD.;
)
TEVA PHARMACEUTICALS USA, INC.;
)
CEPHALON, INC.; JOHNSON & JOHNSON; )
JANSSEN PHARMACEUTICALS, INC.;
)
ORTHO-MCNEIL-JANSSEN
)
PHARMACEUTICALS, INC. n/k/a JANSSEN )
PHARMACEUTICALS, INC.; JANSSEN
)
PHARMACEUTICA INC. n/k/a JANSSEN
)
PHARMACEUTICALS, INC.; NORAMCO,
)
INC.; ENDO HEALTH SOLUTIONS INC.;
)
ENDO PHARMACEUTICALS, INC.;
)
ALLERGAN PLC f/k/a ACTAVIS PLS;
)
WATSON PHARMACEUTICALS, INC. n/k/a )
ACTAVIS, INC.; WATSON
)
LABORATORIES, INC.; ACTAVIS LLC;
)
ACTAVIS PHARMA, INC. f/k/a WATSON
)
PHARMA, INC.;
)
MALLINCKRODT PLC and
)
MALLINCKRODT LLC.
)
)
Defendants. )
)
)
)
)
)

CIVIL ACTION NO.: _______________

COMPLAINT
Complaint for Public Nuisance;
Violations of Racketeer Influenced and
Corrupt Organizations Act (RICO), 18
U.S.C. § 1961 et seq.; Violations of 18
U.S.C. § 1962 et seq.; Violations of the
Wisconsin Deceptive Trade Practices
Act, Wis. Stat. Ann. § 100.18;
Negligence and Negligent
Misrepresentation; Negligence Per Se;
Fraud and Fraudulent
Misrepresentation; and Unjust
Enrichment

JURY TRIAL DEMANDED AND
ENDORSED HEREON

 TABLE OF CONTENTS
I.

INTRODUCTION ...............................................................................................................1

II.

PARTIES .............................................................................................................................2
A. PLAINTIFF....................................................................................................................2
B. DEFENDANTS. ............................................................................................................4
1. Manufacturer Defendants.............................................................................4
2. Distributor Defendants. ................................................................................9

III.

JURISDICTION & VENUE ..............................................................................................11

IV.

FACTUAL BACKGROUND ............................................................................................12
A. THE OPIOID EPIDEMIC. ..........................................................................................12
1. The National Opioid Epidemic. .................................................................12
2. The Wisconsin Opioid Epidemic. ..............................................................16
3. The Opioid Epidemic in Plaintiff’s Community. .......................................19
B. THE MANUFACTURER DEFENDANTS’ FALSE, DECEPTIVE, AND
UNFAIR MARKETING OF OPIOIDS. ......................................................................27
1. Each Manufacturer Defendant Used Multiple Avenues to
Disseminate Their False and Deceptive Statements about Opioids...........29
ii. Direct Marketing. .................................................................................30
iii. Indirect Marketing. ..............................................................................32
2. The Manufacturer Defendants’ Marketing Scheme Misrepresented
the Risks and Benefits of Opioids. .............................................................43
i. The Manufacturer Defendants embarked upon a campaign of
false, deceptive, and unfair assurances grossly understating and
misstating the dangerous addiction risks of the opioid drugs. .............43
ii. The Manufacturer Defendants embarked upon a campaign of
false, deceptive, and unfair assurances grossly overstating the
benefits of the opioid drugs..................................................................54

i

 3. The Manufacturer Defendants Targeted Susceptible Prescribers
and Vulnerable Patient Populations. ..........................................................61
4. The Manufacturer Defendants made Materially Deceptive
Statements and Concealed Material Facts. ................................................62
5. The Manufacturer Defendants Fraudulently Concealed Their
Misconduct.................................................................................................68
C. THE DISTRIBUTOR DEFENDANTS’ UNLAWFUL DISTRIBUTION OF
OPIOIDS. .....................................................................................................................70
1. Wholesale Drug Distributors Have a Duty under State and Federal
Law to Guard Against, and Report, Unlawful Diversion and to
Report and Prevent Suspicious Orders. .....................................................71
2. The Distributor Defendants Breached Their Duties. .................................80
3. The Distributor Defendants Have Sought to Avoid and Have
Misrepresented their Compliance with Their Legal Duties. ......................82
D. THE MANUFACTURER DEFENDANTS’ UNLAWFUL FAILURE TO
PREVENT DIVERSION AND MONITOR, REPORT, AND PREVENT
SUSPICIOUS ORDERS. .............................................................................................90
E. DEFENDANTS’ UNLAWFUL CONDUCT AND BREACHES OF LEGAL
DUTIES CAUSED THE HARM ALLEGED HEREIN AND
SUBSTANTIAL DAMAGES. ....................................................................................96
F. DEFENDANTS’ FRAUDULENT AND DECEPTIVE MARKETING OF
OPIOIDS DIRECTLY CAUSED HARM TO THE PLAINTIFF. ..............................99
1. Increase in Opioid Prescribing Nationally ...............................................100
2. Plaintiff’s Increased Spending on Opioids through Self-Insured
Health Care Plan and Worker’s Compensation Program ........................101
i. Health Care Plans ...............................................................................101
ii. Workers’ Compensation Programs ....................................................104
iii. Plaintiff’s Increased Costs Correlate with the Defendants’
Promotion...........................................................................................107

ii

 G. STATUTES OF LIMITATIONS ARE TOLLED AND DEFENDANTS ARE
ESTOPPED FROM ASSERTED STATUTES OF LIMITATIONS AS
DEFENSES. ...............................................................................................................108
1. Continuing Conduct. ................................................................................108
2. Equitable Estoppel. ..................................................................................108
V.

LEGAL CAUSES OF ACTION ......................................................................................111

COUNT I - PUBLIC NUISANCE (Against all Defendants) ......................................................111
COUNT II - RACKETEER INFLUENCED AND CORRUPT ORGANIZATIONS ACT
18 U.S.C. § 1961, et seq. (Against All Defendants) ....................................................................121
A. THE OPIOID DIVERSION ENTERPRISE ........................................................125
B. CONDUCT OF THE OPIOID DIVERSION ENTERPRISE .............................139
C. PATTERN OF RACKETEERING ACTIVITY. .................................................144
1. The RICO Defendants Engaged in Mail and Wire Fraud. .........................144
2. The RICO Defendants Manufactured, Sold and/or Dealt in
Controlled Substances and Their Crimes Are Punishable as
Felonies. ...................................................................................................152
D. DAMAGES ..........................................................................................................158
COUNT III - RACKETEER INFLUENCED AND CORRUPT ORGANIZATIONS ACT
18 U.S.C. § 1962(d), et seq. (Against All Defendants) ...............................................................159
A. THE OPIOID DIVERSION ENTERPRISE. .......................................................159
B. CONDUCT OF THE OPIOID DIVERSION ENTERPRISE. ............................159
C. PATTERN OF RACKETEERING ACTIVITY. .................................................159
D. DAMAGES. .........................................................................................................160
COUNT IV - WISCONSIN DECEPTIVE TRADE PRACTICES ACT - Wis. Stat. Ann.
§ 100.18 (Against All Defendants) ..............................................................................................160
COUNT V - NEGLIGENCE AND NEGLIGENT MISREPRESENTATION (Against All
Defendants) ..................................................................................................................................165
COUNT VI - NEGLIGENCE PER SE (Against All Defendants) ..............................................170

iii

 COUNT VII - FRAUD AND FRAUDULENT MISREPRESENTATION (Against All
Defendants) ..................................................................................................................................176
COUNT VIII - UNJUST ENRICHMENT (Against All Defendants) .........................................178
PUNITIVE DAMAGES ............................................................................................................. 178
RELIEF ........................................................................................................................................179

iv

 Plaintiff, MILWAUKEE COUNTY, WISCONSIN, brings this Complaint against
Defendants Purdue Pharma L.P.; Purdue Pharma, Inc.; The Purdue Frederick Company, Inc.;
Teva Pharmaceutical Industries, LTD.; Teva Pharmaceuticals USA, Inc.; Cephalon, Inc.;
Johnson & Johnson; Janssen Pharmaceuticals, Inc.; Ortho-McNeil-Janssen Pharmaceuticals, Inc.
n/k/a Janssen Pharmaceuticals, Inc.; Janssen Pharmaceutica Inc. n/k/a Janssen Pharmaceuticals,
Inc.; Noramco, Inc.; Endo Health Solutions Inc.; Endo Pharmaceuticals, Inc.; Allergan PLC f/k/a
Actavis PLS; Watson Pharmaceuticals, Inc. n/k/a Actavis, Inc.; Watson Laboratories, Inc.;
Actavis, LLC; Actavis Pharma, Inc. f/k/a Watson Pharma, Inc.; Mallinckrodt PLC; Mallinckrodt
LLC; McKesson Corporation; Cardinal Health, Inc.; and AmerisourceBergen Drug Corporation
(collectively “Defendants”) and alleges as follows:
I.
1.

INTRODUCTION

Plaintiff brings this civil action to eliminate the hazard to public health and safety

caused by the opioid epidemic, to abate the nuisance caused thereby, and to recoup monies that
have been spent because of Defendants’ false, deceptive and unfair marketing and/or unlawful
diversion of prescription opioids. 1 Such economic damages were foreseeable to Defendants and
were sustained because of Defendants’ intentional and/or unlawful actions and omissions.
2.

Opioid analgesics are widely diverted and improperly used, and the widespread

abuse of opioids has resulted in a national epidemic of opioid overdose deaths and addictions. 2
3.

The opioid epidemic is “directly related to the increasingly widespread misuse of

powerful opioid pain medications.” 3
1

As used herein, the term “opioid” refers to the entire family of opiate drugs including natural, synthetic and semisynthetic opiates.

2

See Nora D. Volkow & A. Thomas McLellan, Opioid Abuse in Chronic Pain—Misconceptions and Mitigation
Strategies, 374 N. Eng. J. Med. 1253 (2016).

3 See Robert M. Califf et al., A Proactive Response to Prescription Opioid Abuse, 374 N. Eng. J. Med. 1480 (2016).

1

 4.

Plaintiff brings this suit against the manufacturers of prescription opioids. The

manufacturers aggressively pushed highly addictive, dangerous opioids, falsely representing to
doctors that patients would only rarely succumb to drug addiction. These pharmaceutical
companies aggressively advertised to and persuaded doctors to prescribe highly addictive,
dangerous opioids, turning patients into drug addicts for their own corporate profit. Such actions
were intentional and/or unlawful.
5.

Plaintiff also brings this suit against the wholesale distributors of these highly

addictive drugs. The distributors and manufacturers intentionally and/or unlawfully breached
their legal duties under federal and state law to monitor, detect, investigate, refuse and report
suspicious orders of prescription opiates.
II.

PARTIES

A. PLAINTIFF.
6.

Plaintiff, MILWAUKEE COUNTY, WISCONSIN, (“Milwaukee County” or

“Plaintiff”) is a body corporate of the State of Wisconsin, and is authorized to bring the causes of
action brought herein. Wis. Stat. Ann. § 59.01.
7.

Plaintiff is responsible for the public health, safety and welfare of its citizens.

8.

Plaintiff has declared, inter alia, that opioid abuse, addiction, morbidity and

mortality has created a serious public health and safety crisis, and is a public nuisance, and that
the diversion of legally produced controlled substances into the illicit market causes or
contributes to this public nuisance.
9.

The distribution and diversion of opioids into Wisconsin (“the State”), and into

Milwaukee County and surrounding areas (collectively, “Plaintiff’s Community”), created the
foreseeable opioid crisis and opioid public nuisance for which Plaintiff here seeks relief.

2

 10.

Plaintiff directly and foreseeably sustained all economic damages alleged herein.

Defendants’ conduct has exacted a financial burden for which the Plaintiff seeks relief.
Categories of past and continuing sustained damages include, inter alia,: (1) costs for providing
medical care, additional therapeutic, and prescription drug purchases, and other treatments for
patients suffering from opioid-related addiction or disease, including overdoses and deaths; (2)
costs for providing treatment, counseling, and rehabilitation services; (3) costs for providing
treatment of infants born with opioid-related medical conditions; (4) costs associated with law
enforcement and public safety relating to the opioid epidemic; (5) and costs associated with
providing care for children whose parents suffer from opioid-related disability or incapacitation.
These damages have been suffered, and continue to be suffered directly, by the Plaintiff.
11.

Plaintiff also seeks the means to abate the epidemic created by Defendants’

wrongful and/or unlawful conduct.
12.

Plaintiff has standing to bring an action for the opioid epidemic nuisance created by

Defendants. See, e.g., Wis. Stat. Ann. § 823.01 (“Any . . . county, . . . may maintain an action to
recover damages or to abate a public nuisance from which injuries peculiar to the complainant
are suffered, so far as necessary to protect the complainant’s rights and to obtain an injunction to
prevent the same.”).
13.

Plaintiff has standing to recover damages incurred as a result of Defendants’

actions and omissions. Plaintiff has standing to bring all claims pled herein, including, inter alia,
to bring claims under the federal RICO statute, pursuant to 18 U.S.C. § 1961(3) (“persons”
include entities which can hold legal title to property) and 18 U.S.C. § 1964 (“persons” have
standing).

3

 B. DEFENDANTS.
1. Manufacturer Defendants.
14.

The Manufacturer Defendants are defined below. At all relevant times, the

Manufacturer Defendants have packaged, distributed, supplied, sold, placed into the stream of
commerce, labeled, described, marketed, advertised, promoted and purported to warn or
purported to inform prescribers and users regarding the benefits and risks associated with the use
of the prescription opioid drugs. The Manufacturer Defendants, at all times, have manufactured
and sold prescription opioids without fulfilling their legal duty to prevent diversion and report
suspicious orders.
15.

PURDUE PHARMA L.P. is a limited partnership organized under the laws of

Delaware. PURDUE PHARMA INC. is a New York corporation with its principal place of
business in Stamford, Connecticut, and THE PURDUE FREDERICK COMPANY, INC. is a
Delaware corporation with its principal place of business in Stamford, Connecticut (collectively,
“Purdue”).
16.

Purdue manufactures, promotes, sells, and distributes opioids such as OxyContin,

MS Contin, Dilaudid/Dilaudid HP, Butrans, Hysingla ER, and Targiniq ER in the United States.
OxyContin is Purdue’s best-selling opioid. Since 2009, Purdue’s annual nationwide sales of
OxyContin have fluctuated between $2.47 billion and $2.99 billion, up four-fold from its 2006
sales of $800 million. OxyContin constitutes roughly 30% of the entire market for analgesic
drugs (painkillers).
17.

CEPHALON, INC. is a Delaware corporation with its principal place of business in

Frazer, Pennsylvania. TEVA PHARMACEUTICAL INDUSTRIES, LTD. (“Teva Ltd.”) is an
Israeli corporation with its principal place of business in Petah Tikva, Israel. In 2011, Teva Ltd.
acquired Cephalon, Inc. TEVA PHARMACEUTICALS USA, INC. (“Teva USA”) is a Delaware
4

 corporation and is a wholly owned subsidiary of Teva Ltd. in Pennsylvania. Teva USA acquired
Cephalon in October 2011.
18.

Cephalon, Inc. manufactures, promotes, sells, and distributes opioids such as Actiq

and Fentora in the United States. Actiq has been approved by the FDA only for the “management
of breakthrough cancer pain in patients 16 years and older with malignancies who are already
receiving and who are tolerant to around-the-clock opioid therapy for the underlying persistent
cancer pain.” 4 Fentora has been approved by the FDA only for the “management of
breakthrough pain in cancer patients 18 years of age and older who are already receiving and
who are tolerant to around-the-clock opioid therapy for their underlying persistent cancer pain.” 5
In 2008, Cephalon pled guilty to a criminal violation of the Federal Food, Drug and Cosmetic
Act for its misleading promotion of Actiq and two other drugs, and agreed to pay $425 million. 6
19.

Teva Ltd., Teva USA, and Cephalon, Inc. work together closely to market and sell

Cephalon products in the United States. Teva Ltd. conducts all sales and marketing activities for
Cephalon in the United States through Teva USA and has done so since its October 2011
acquisition of Cephalon. Teva Ltd. and Teva USA hold out Actiq and Fentora as Teva products
to the public. Teva USA sells all former Cephalon branded products through its “specialty
medicines” division. The FDA-approved prescribing information and medication guide, which is
distributed with Cephalon opioids, discloses that the guide was submitted by Teva USA, and
directs physicians to contact Teva USA to report adverse events.
4

Highlights of Prescribing Information, ACTIQ® (fentanyl citrate) oral transmucosal lozenge, CII (2009),
https://www.accessdata.fda.gov/drugsatfda_docs/label/2009/020747s030lbl.pdf.

5

Highlights of Prescribing Information, FENTORA® (fentanyl citrate) buccal tablet, CII (2011),
https://www.accessdata.fda.gov/drugsatfda_docs/label/2012/021947s015lbl.pdf.

6

Press Release, U.S. Dep’t of Justice, Biopharmaceutical Company, Cephalon, to Pay $425 Million & Enter Plea to
Resolve Allegations of Off-Label Marketing (Sept. 29, 2008),
https://www.justice.gov/archive/opa/pr/2008/September/08-civ-860.html.

5

 20.

All of Cephalon’s promotional websites, including those for Actiq and Fentora,

display Teva Ltd.’s logo. 7 Teva Ltd.’s financial reports list Cephalon’s and Teva USA’s sales as
its own, and its year-end report for 2012 – the year immediately following the Cephalon
acquisition – attributed a 22% increase in its specialty medicine sales to “the inclusion of a full
year of Cephalon’s specialty sales,” including inter alia sales of Fentora®. 8 Through interrelated
operations like these, Teva Ltd. operates in the United States through its subsidiaries Cephalon
and Teva USA. The United States is the largest of Teva Ltd.’s global markets, representing 53%
of its global revenue in 2015, and, were it not for the existence of Teva USA and Cephalon, Inc.,
Teva Ltd. would conduct those companies’ business in the United States itself. Upon information
and belief, Teva Ltd. directs the business practices of Cephalon and Teva USA, and their profits
inure to the benefit of Teva Ltd. as controlling shareholder. Teva Pharmaceutical Industries, Ltd.,
Teva Pharmaceuticals USA, Inc., and Cephalon, Inc. are referred to as “Cephalon.”
21.

JANSSEN PHARMACEUTICALS, INC. is a Pennsylvania corporation with its

principal place of business in Titusville, New Jersey, and is a wholly owned subsidiary of
JOHNSON & JOHNSON (J&J), a New Jersey corporation with its principal place of business in
New Brunswick, New Jersey. NORAMCO, INC. (“Noramco”) is a Delaware company
headquartered in Wilmington, Delaware and was a wholly owned subsidiary of J&J until July
2016. ORTHO-MCNEIL-JANSSEN PHARMACEUTICALS, INC., now known as JANSSEN
PHARMACEUTICALS, INC., is a Pennsylvania corporation with its principal place of business
in Titusville, New Jersey. JANSSEN PHARMACEUTICA INC., now known as JANSSEN
PHARMACEUTICALS, INC., is a Pennsylvania corporation with its principal place of business
7

E.g., ACTIQ, http://www.actiq.com/ (displaying logo at bottom-left) (last visited Jan. 16, 2018).

8

Teva Ltd., Annual Report (Form 20-F) 62 (Feb. 12, 2013),
http://annualreports.com/HostedData/AnnualReportArchive/t/NASDAQ_TEVA_2012.pdf.

6

 in Titusville, New Jersey. J&J is the only company that owns more than 10% of Janssen
Pharmaceuticals’ stock, and corresponds with the FDA regarding Janssen’s products. Upon
information and belief, J&J controls the sale and development of Janssen Pharmaceuticals’ drugs
and Janssen’s profits inure to J&J’s benefit. Janssen Pharmaceuticals, Inc., Ortho-McNeilJanssen Pharmaceuticals, Inc., Janssen Pharmaceutica, Inc., Noramco, and J&J are referred to as
“Janssen.”
22.

Janssen manufactures, promotes, sells, and distributes drugs in the United States,

including the opioid Duragesic (fentanyl). Before 2009, Duragesic accounted for at least $1
billion in annual sales. Until January 2015, Janssen developed, marketed, and sold the opioids
Nucynta (tapentadol) and Nucynta ER. Together, Nucynta and Nucynta ER accounted for $172
million in sales in 2014.
23.

ENDO HEALTH SOLUTIONS INC. is a Delaware corporation with its principal

place of business in Malvern, Pennsylvania. ENDO PHARMACEUTICALS INC. is a wholly
owned subsidiary of Endo Health Solutions Inc. and is a Delaware corporation with its principal
place of business in Malvern, Pennsylvania. Endo Health Solutions Inc. and Endo
Pharmaceuticals Inc. are referred to as “Endo.”
24.

Endo develops, markets, and sells prescription drugs, including the opioids

Opana/Opana ER, Percodan, Percocet, and Zydone, in the United States. Opioids made up
roughly $403 million of Endo’s overall revenues of $3 billion in 2012. Opana ER yielded $1.15
billion in revenue from 2010 and 2013, and it accounted for 10% of Endo’s total revenue in
2012. Endo also manufactures and sells generic opioids such as oxycodone, oxymorphone,
hydromorphone, and hydrocodone products in the United States, by itself and through its
subsidiary, Qualitest Pharmaceuticals, Inc.

7

 25.

ALLERGAN PLC is a public limited company incorporated in Ireland with its

principal place of business in Dublin, Ireland. ACTAVIS PLC acquired ALLERGAN PLC in
March 2015, and the combined company changed its name to ALLERGAN PLC in January
2013. Before that, WATSON PHARMACEUTICALS, INC. acquired ACTAVIS, INC. in
October 2012, and the combined company changed its name to Actavis, Inc. as of January 2013
and then ACTAVIS PLC in October 2013. WATSON LABORATORIES, INC. is a Nevada
corporation with its principal place of business in Corona, California, and is a wholly-owned
subsidiary of ALLERGAN PLC (f/k/a Actavis, Inc., f/k/a Watson Pharmaceuticals, Inc.).
ACTAVIS PHARMA, INC. (f/k/a Actavis, Inc.) is a Delaware corporation with its principal
place of business in New Jersey and was formerly known as WATSON PHARMA, INC.
ACTAVIS LLC is a Delaware limited liability company with its principal place of business in
Parsippany, New Jersey. Each of these defendants is owned by ALLERGAN PLC, which uses
them to market and sell its drugs in the United States. Upon information and belief, ALLERGAN
PLC exercises control over these marketing and sales efforts and profits from the sale of
Allergan/Actavis products ultimately inure to its benefit. ALLERGAN PLC, ACTAVIS PLC,
ACTAVIS, Inc., Actavis LLC, Actavis Pharma, Inc., Watson Pharmaceuticals, Inc., Watson
Pharma, Inc., and Watson Laboratories, Inc. are referred to as “Actavis.”
26.

Actavis manufactures, promotes, sells, and distributes opioids, including the

branded drugs Kadian and Norco, a generic version of Kadian, and generic versions of Duragesic
and Opana, in the United States. Actavis acquired the rights to Kadian from King
Pharmaceuticals, Inc. on December 30, 2008, and began marketing Kadian in 2009.
27.

MALLINCKRODT, PLC is an Irish public limited company headquartered in

Staines-upon-Thames, United Kingdom, with its U.S. headquarters in St. Louis, Missouri.

8

 MALLINCKRODT, LLC is a limited liability company organized and existing under the laws of
the State of Delaware. Mallinckrodt, LLC is a wholly owned subsidiary of Mallinckrodt, PLC.
Mallinckrodt, PLC and Mallinckrodt, LLC are referred to as “Mallinckrodt.”
28.

Mallinckrodt manufactures, markets, and sells drugs in the United States including

generic oxycodone, of which it is one of the largest manufacturers. In July 2017 Mallinckrodt
agreed to pay $35 million to settle allegations brought by the Department of Justice that it
failed to detect and notify the DEA of suspicious orders of controlled substances.
2. Distributor Defendants.
29.

The Distributor Defendants also are defined below. At all relevant times, the

Distributor Defendants have distributed, supplied, sold, and placed into the stream of commerce
the prescription opioids, without fulfilling the fundamental duty of wholesale drug distributors to
detect and warn of diversion of dangerous drugs for non-medical purposes. The Distributor
Distributors universally failed to comply with federal and/or state law. The Distributor
Defendants are engaged in “wholesale distribution,” as defined under state and federal law.
Plaintiff alleges the unlawful conduct by the Distributor Distributors is responsible for the
volume of prescription opioids plaguing Plaintiff’s Community.
30.

McKESSON CORPORATION (“McKesson”) at all relevant times, operated as a

licensed distributor in Wisconsin, licensed by the Wisconsin Pharmacy Examining Board.
McKesson is a Delaware corporation. McKesson has its principal place of business located in
San Francisco, California. McKesson operates distribution centers in Windsor, Wisconsin.
31.

CARDINAL HEALTH, INC. (“Cardinal”) at all relevant times, operated as a

licensed distributor wholesaler in Wisconsin, licensed by the Wisconsin Pharmacy Examining
Board. Cardinal’s principal office is located in Dublin, Ohio. Cardinal operates a distribution
center in Hudson, Wisconsin.
9

 32.

AMERISOURCEBERGEN DRUG CORPORATION (“AmerisourceBergen”) at

all relevant times, operated as a licensed distributor wholesaler in Wisconsin, licensed by the
Wisconsin Pharmacy Examining Board. AmerisourceBergen is a Delaware corporation and its
principal place of business is located in Chesterbrook, Pennsylvania.
33.

The data which reveals and/or confirms the identity of each wrongful opioid

distributor is hidden from public view in the DEA’s confidential ARCOS database. See Madel v.
USDOJ, 784 F.3d 448 (8th Cir. 2015). Neither the DEA 9 nor the wholesale distributors 10 will
voluntarily disclose the data necessary to identify with specificity the transactions which will
form the evidentiary basis for the claims asserted herein.
34.

Consequently, Plaintiff has named the three (3) wholesale distributors (i.e.,

AmerisourceBergen Drug Corporation, Cardinal Health, Inc., and McKesson Corporation) which
dominate 85% of the market share for the distribution of prescription opioids. The “Big 3” are
Fortune 500 corporations listed on the New York Stock Exchange whose principal business is
the nationwide wholesale distribution of prescription drugs. See Fed. Trade Comm'n v. Cardinal
Health, Inc., 12 F. Supp. 2d 34, 37 (D.D.C. 1998) (describing Cardinal Health, Inc., McKesson
Corporation, and AmerisourceBergen Drug Corporation predecessors). Each has been
investigated and/or fined by the DEA for the failure to report suspicious orders. Plaintiff has
reason to believe each has engaged in unlawful conduct which resulted in the diversion of
prescription opioids into our community and that discovery will likely reveal others who
9

See Declaration of Katherine L. Myrick, Chief, Freedom of Information (FOI)/Privacy Act Unit (“SARF”), FOI,
Records Management Section (“SAR”), Drug Enforcement Administration (DEA), United States Department of
Justice (DOJ), Madel v. USDOJ, Case 0:13-cv-02832-PAM-FLN, (Document 23) (filed 02/06/14) (noting that
ARCOS data is “kept confidential by the DEA”).

10

See Declaration of Tina Lantz, Cardinal Health VP of Sales Operation, Madel v. USDOJ, Case 0:13-cv-02832PAM-FLN, (Document 93) (filed 11/02/16) (“Cardinal Health does not customarily release any of the information
identified by the DEA notice letter to the public, nor is the information publicly available. Cardinal Health relies on
DEA to protect its confidential business information reported to the Agency.”).

10

 likewise engaged in unlawful conduct. Plaintiff names each of the “Big 3” herein as defendants
and places the industry on notice that the Plaintiff is acting to abate the public nuisance plaguing
the community. Plaintiff will request expedited discovery pursuant to Rule 26(d) of the Federal
Rules of Civil Procedure to secure the data necessary to reveal and/or confirm the identities of
the wholesale distributors, including data from the ARCOS database.
III.
35.

JURISDICTION & VENUE

This Court has subject matter jurisdiction under 28 U.S.C. § 1331 based upon the

federal claims asserted under the Racketeer Influenced and Corrupt Organizations Act, 18 U.S.C.
§ 1961, et seq. (“RICO”). This Court has supplemental jurisdiction over Plaintiff’s state law
claims pursuant to 28 U.S.C. § 1367 because those claims are so related to Plaintiff’s federal
claims that they form part of the same case or controversy.
36.

This Court also has jurisdiction over this action in accordance with 28 U.S.C. §

1332(a) because the Plaintiff is a “citizen” of this State, the named Defendants are citizens of
different states and the amount in controversy exceeds the sum or value of $75,000, exclusive of
interest and costs.
37.

This Court has personal jurisdiction over Defendants because they conduct

business in the State, purposefully direct or directed their actions toward the State, some or all
consented to be sued in the State by registering an agent for service of process, they consensually
submitted to the jurisdiction of the State when obtaining a manufacturer or distributor license,
and because they have the requisite minimum contacts with the State necessary to
constitutionally permit the Court to exercise jurisdiction.
38.

This Court also has personal jurisdiction over all of the defendants under 18 U.S.C.

§ 1965(b). This Court may exercise nation-wide jurisdiction over the named Defendants where
the “ends of justice” require national service and Plaintiff demonstrates national contacts. Here,
11

 the interests of justice require that Plaintiff be allowed to bring all members of the nationwide
RICO enterprise before the court in a single trial. See, e.g., Iron Workers Local Union No. 17
Insurance Fund v. Philip Morris Inc., 23 F. Supp. 2d 796, 803 (N.D. Ohio 1998) (citing LaSalle
National Bank v. Arroyo Office Plaza, Ltd., 1988 WL 23824, *2 (N.D. Ill. Mar 10, 1988);
Butcher’s Union Local No. 498 v. SDC Invest., Inc., 788 F.2d 535, 539 (9th Cir. 1986)).
39.

Venue is proper in this District pursuant to 28 U.S.C. § 1391 and 18 U.S.C. §1965

because a substantial part of the events or omissions giving rise to the claim occurred in this
District and each Defendant transacted affairs and conducted activity that gave rise to the claim
of relief in this District. 28 U.S.C. § 1391(b); 18 U.S.C. §1965(a).
IV.

FACTUAL BACKGROUND

A. THE OPIOID EPIDEMIC.
1. The National Opioid Epidemic.
40.

The past two decades have been characterized by increasing abuse and diversion of

prescription drugs, including opioid medications, in the United States. 11
41.

Prescription opioids have become widely prescribed. By 2010, enough prescription

opioids were sold to medicate every adult in the United States with a dose of 5 milligrams of
hydrocodone every 4 hours for 1 month. 12
42.

By 2011, the U.S. Department of Health and Human Resources, Centers for

Disease Control and Prevention, declared prescription painkiller overdoses at epidemic levels.
The News Release noted:

11

See Richard C. Dart et al., Trends in Opioid Analgesic Abuse and Mortality in the United States, 372 N. Eng. J.
Med. 241 (2015).
12

Katherine M. Keyes at al., Understanding the Rural-Urban Differences in Nonmedical Prescription Opioid Use
and Abuse in the United States, 104 Am. J. Pub. Health e52 (2014).

12

 a. The death toll from overdoses of prescription painkillers has more than tripled in
the past decade.
b. More than 40 people die every day from overdoses involving narcotic pain
relievers like hydrocodone (Vicodin), methadone, oxycodone (OxyContin), and
oxymorphone (Opana).
c. Overdoses involving prescription painkillers are at epidemic levels and now kill
more Americans than heroin and cocaine combined.
d. The increased use of prescription painkillers for nonmedical reasons, along with
growing sales, has contributed to a large number of overdoses and deaths. In
2010, 1 in every 20 people in the United States age 12 and older—a total of 12
million people—reported using prescription painkillers non-medically according
to the National Survey on Drug Use and Health. Based on the data from the Drug
Enforcement Administration, sales of these drugs to pharmacies and health care
providers have increased by more than 300 percent since 1999.
e. Prescription drug abuse is a silent epidemic that is stealing thousands of lives and
tearing apart communities and families across America.
f. Almost 5,500 people start to misuse prescription painkillers every day. 13
43.

The number of annual opioid prescriptions written in the United States is now

roughly equal to the number of adults in the population. 14
44.

Many Americans are now addicted to prescription opioids, and the number of

deaths due to prescription opioid overdose is unacceptable. In 2016, drug overdoses killed
roughly 64,000 people in the United States, an increase of more than 22 percent over the 52,404
drug deaths recorded the previous year. 15

13

See Press Release, Ctrs. for Disease Control and Prevention, U.S. Dep’t of Health and Human Servs., Prescription
Painkiller Overdoses at Epidemic Levels (Nov. 1, 2011),
https://www.cdc.gov/media/releases/2011/p1101_flu_pain_killer_overdose.html.

14

See Robert M. Califf et al., A Proactive Response to Prescription Opioid Abuse, 374 N. Eng. J. Med. 1480 (2016).

15

See Ctrs. for Disease Control and Prevention, U.S. Dep’t of Health and Human Servs., Provisional Counts of Drug
Overdose Deaths, (August 8, 2016), https://www.cdc.gov/nchs/data/health_policy/monthly-drug-overdose-deathestimates.pdf.

13

 45.

Moreover, the CDC has identified addiction to prescription pain medication as the

strongest risk factor for heroin addiction. People who are addicted to prescription opioid
painkillers are forty times more likely to be addicted to heroin. 16
46.

Heroin is pharmacologically similar to prescription opioids. The majority of current

heroin users report having used prescription opioids non-medically before they initiated heroin
use. Available data indicates that the nonmedical use of prescription opioids is a strong risk
factor for heroin use. 17
47.

The CDC reports that drug overdose deaths involving heroin continued to climb

sharply, with heroin overdoses more than tripling in 4 years. This increase mirrors large
increases in heroin use across the country and has been shown to be closely tied to opioid pain
reliever misuse and dependence. Past misuse of prescription opioids is the strongest risk factor
for heroin initiation and use, specifically among persons who report past-year dependence or
abuse. The increased availability of heroin, combined with its relatively low price (compared
with diverted prescription opioids) and high purity appear to be major drivers of the upward
trend in heroin use and overdose. 18
48.

The societal costs of prescription drug abuse are “huge.” 19

16

See Ctrs. for Disease Control and Prevention, U.S. Dep’t of Health and Human Servs., Today’s Heroin Epidemic,
https://www.cdc.gov/vitalsigns/heroin/index.html (last updated July 7, 2015).

17

See Wilson M. Compton, Relationship Between Nonmedical Prescription-Opioid Use and Heroin, 374 N. Eng. J.
Med. 154 (2016).

18

See Rose A. Rudd et al., Increases in Drug and Opioid Overdose Deaths—United States, 2000–2014, 64
Morbidity & Mortality Wkly. Rep. 1378 (2016).

19

See Amicus Curiae Brief of Healthcare Distribution Management Association in Support of Appellant Cardinal
Health, Inc., Cardinal Health, Inc. v. United States Dept. Justice, No. 12-5061 (D.C. Cir. May 9, 2012), 2012 WL
1637016, at *10 [hereinafter Brief of HDMA].

14

 49.

Across the nation, local governments are struggling with a pernicious, ever-

expanding epidemic of opioid addiction and abuse. Every day, more than 90 Americans lose
their lives after overdosing on opioids. 20
50.

The National Institute on Drug Abuse identifies misuse and addiction to opioids as

“a serious national crisis that affects public health as well as social and economic welfare.” 21 The
economic burden of prescription opioid misuse alone is $78.5 billion a year, including the costs
of healthcare, lost productivity, addiction treatment, and criminal justice expenditures. 22
51.

The U.S. opioid epidemic is continuing, and drug overdose deaths nearly tripled

during 1999–2014. Among 47,055 drug overdose deaths that occurred in 2014 in the United
States, 28,647 (60.9%) involved an opioid. 23
52.

The rate of death from opioid overdose has quadrupled during the past 15 years in

the United States. Nonfatal opioid overdoses that require medical care in a hospital or emergency
department have increased by a factor of six in the past 15 years. 24
53.

Every day brings a new revelation regarding the depth of the opioid plague: just to

name one example, the New York Times reported in September 2017 that the epidemic, which

20
Opioid Crisis, NIH, National Institute on Drug Abuse (available at https://www.drugabuse.gov/drugsabuse/opioids/opioid-crisis, last visited Sept. 19, 2017) (“Opioid Crisis, NIH”) (citing at note 1 Rudd RA, Seth P,
David F, Scholl L, Increases in Drug and Opioid-Involved Overdose Deaths — United States, 2010–2015, MMWR
MORB MORTAL WKLY REP. 2016;65, doi:10.15585/mmwr.mm655051e1).
21

Opioid Crisis, NIH.

22

Id. (citing at note 2 Florence CS, Zhou C, Luo F, Xu L, The Economic Burden of Prescription Opioid Overdose,
Abuse, and Dependence in the United States, 2013, MED CARE 2016;54(10):901-906,
doi:10.1097/MLR.0000000000000625).
23

See Rose A. Rudd et al., Increases in Drug and Opioid-Involved Overdose Deaths—United States, 2010–2015, 65
Morbidity & Mortality Wkly. Rep. 1445 (2016).

24

See Nora D. Volkow & A. Thomas McLellan, Opioid Abuse in Chronic Pain—Misconceptions and Mitigation
Strategies, 374 N. Eng. J. Med. 1253 (2016).

15

 now claims 60,000 lives a year, is now killing babies and toddlers because ubiquitous, deadly
opioids are “everywhere” and mistaken as candy. 25
54.

In 2016, the President of the United States declared an opioid and heroin

epidemic. 26
55.

The epidemic of prescription pain medication and heroin deaths is devastating

families and communities across the country. 27 Meanwhile, the manufacturers and distributors
of prescription opioids extract billions of dollars of revenue from the addicted American public
while public entities experience hundreds of millions of dollars of injury – if not more – caused
by the reasonably foreseeable consequences of the prescription opioid addiction epidemic.
56.

The prescription opioid manufacturers and distributors, including the Defendants,

have continued their wrongful, intentional, and unlawful conduct, despite their knowledge that
such conduct is causing and/or contributing to the national, state, and local opioid epidemic.
2. The Wisconsin Opioid Epidemic.
57.

Wisconsin has been especially ravaged by the national opioid crisis.

58.

The Wisconsin State Health Assessment and Health Improvement Plan reports that

between 2005 and 2015—as prescription opioid sales steadily increased—the number of opioidrelated overdose deaths in Wisconsin more than doubled. 28 The main cause of drug overdoses is
prescription opioids, which caused six of 10 opioid-related deaths and eight of 10 hospital visits
25
Julie Turkewitz, ‘The Pills are Everywhere’: How the Opioid Crisis Claims Its Youngest Victims, N.Y. Times,
Sept. 20, 2017 (“‘It’s a cancer,’ said [grandmother of dead one-year old], of the nation’s opioid problem, ‘with
tendrils that are going everywhere.’”).
26

See Proclamation No. 9499, 81 Fed. Reg. 65,173 (Sept. 16, 2016) (proclaiming “Prescription Opioid and Heroin
Epidemic Awareness Week”).

27

See Presidential Memorandum – Addressing Prescription Drug Abuse and Heroin Use, 2015 Daily Comp. Pres.
Doc. 743 (Oct. 21, 2015), https://www.gpo.gov/fdsys/pkg/DCPD-201500743/pdf/DCPD-201500743.pdf.

28

See Wisconsin State Health Assessment and Health Improvement Plan, Priority: Opioids (2015), available at
https://healthy.wisconsin.gov/healthywifiles/8346-healthy-wi-plan-opioids.pdf (last visited February 5, 2015).

16

 in Wisconsin. 29 By 2015, over two hundred thousand Wisconsin residents aged 12 and older had
used opioids non-medically or illegally—slightly less than the population of Madison,
Wisconsin.30 And from 2010 to 2014, the rate of prescription drug deaths increased by 21
percent in Wisconsin, alongside a 188% increase in the number of deaths from heroin (which is
cheaper and easier for addicts to obtain, and causally related to the use of prescription opioids). 31
Three out of four people in Wisconsin who use heroin began their drug abuse using prescription
opioids. 32 “In 2014, more than 14,000 hospital visits in Wisconsin were because of opioids, and
almost 3,000 were for opioid overdoses.” 33
59.

The rate of opioid overdose deaths in Wisconsin almost doubled from 2006 to

2015, going up from 5.9 deaths per 100,000 residents in 2006 to 10.7 deaths per 100,000 people
in 2015. 34

“Prescription opioids have been the main driver of drug overdose deaths and

poisonings.” 35 In 2015, almost two-third of opioid-related deaths involved prescription drugs. 36
60.

Wisconsin suffered a statistically significant increase in the drug overdose death

rate from 2015 to 2016, according to data from the Centers for Disease Control and Prevention
(CDC). 37 The death rate rose by 24.5 percent. 38

29

Id.

30

Id.

31

Id.

32

Id.

33

Id.

34

Wisconsin Department of Health Services, Select Opioid-Related Morbidity and Mortality Data for Wisconsin,
November 2016, available at https://www.dhs.wisconsin.gov/publications/p01690.pdf (last visited Feb. 12, 2018).
35

Id.

36

Id.

37

Centers for Disease Control and Prevention, Drug Overdose Death Data, (“2015-2016 Death Increases” tab,
available at https://www.cdc.gov/drugoverdose/data/statedeaths.html (last visited Feb. 9, 2018).
38

Id.

17

 Statistically significant drug overdose death rate increase from 2015-2016, US states

61.

According to the CDC, in 2016, 1,074 people died of drug overdoses in Wisconsin,

for a rate of 19.3 per 100.000 people. 39 In 2015, 878 people died from drug overdoses while in
2014, 853 people died. 40
62.

The number of opioid-related hospitalizations steadily increased from 2006-2015 in

Wisconsin:

39

Id. at “2016 Deaths” tab.

40

Id. at “2015 Deaths” tab and “2014 Deaths” tab.

18

 63.

Neonatal Abstinence Syndrome (NAS), a collection of symptoms newborn babies

experience withdrawing from opioid medications taken by the mother, increased dramatically in
Wisconsin between 2000 and 2013 from 0.4 per 1,000 hospital births in 2000 to 7.9 in 2013. 41
3. The Opioid Epidemic in Plaintiff’s Community.
64.

The opioid epidemic is particularly devastating in Plaintiff’s Community.

65.

Milwaukee County is disproportionately affected by the opioid crisis within

Wisconsin. For example, out of the 878 drug overdose deaths in Wisconsin in 2015, 255 (29.0%)
were from Milwaukee County. 42

41

Jean Y. Ko, et al., Incidence of Neonatal Abstinence Syndrome — 28 States, 1999-2013, 65 Morbidity & Mortality
Wkly. Rep. 799 (2016).

19

 66.

Opioid-related deaths in Milwaukee County have increased significantly just in the

last few years, based on data reported by the Milwaukee County Medical Examiner, which
shows that opioid-related deaths have more than doubled from 144 in 2012 to 336 in 2017: 43

67.

Following the pattern seen in other communities, alongside the increase in

prescription opioid usage, Milwaukee County has seen an almost five-fold increase in the
number of heroin-related deaths from 2005-2014. 44 “These deaths, together with other opiaterelated overdoses, have exceeded injury related deaths such as motor vehicle fatalities and
homicides.” 45 According to the Milwaukee County Medical Examiner, in 2017, the number of

42

Milwaukee Community Opioid Prevention Effort, Milwaukee County Opioid-Related Overdose Report, available
at https://mkecope.com/portfolio/the-opioid-epidemic/ (last visited March 5, 2018).

43

Chart based on information from the Milwaukee County Medical Examiner and Milwaukee COPE, Community
Opioid Prevention Effort, Milwaukee County Opioid-Related Overdose Report, 2012-2016, at 4, (November 27,
2017), available at https://mkecope.files.wordpress.com/2017/06/milwaukee-county-opioid-related-overdose-report6-21-171.pdf (last visited March 5, 2018).
44

Office of Common Council President, “888* Bodies and Counting” at 2, (2016) available at
https://www.documentcloud.org/documents/3149191-888-Bodies-and-Counting-Milwaukee-Common-Council.html
(last visited February 5, 2018).
45

Id.

20

 drug-related deaths was greater than the number of suicides, homicides and motor vehicle
accidents combined: 46

Milwaukee County non-natural deaths 2011-2017
450
400
350
300
250
200
150
100
50
0
2011
Total drug death
Homicide

68.

2012

2013

2014

Narcotic death
Suicide

2015
Heroin-related
MVA

2016

2017

Fentanyl-related
Infant death

Up to 88% of Milwaukee County overdose deaths occur in persons between the

ages of 20-59 years, affecting three generations of families and neighbors in Plaintiff’s
Community; the problem is as pervasive among persons in their 30’s as persons in their 50’s,
shown through five and one-half years of Medical Examiner data (January 1, 2012 – June 30,
2017). Additionally, overdose deaths in Caucasians mirror overall age distribution, but AfricanAmerican overdose deaths skew older with 57% of those deaths occurring between the ages of
40-59. 47

46

Information provided by the Milwaukee County Medical Examiner.

47

Milwaukee COPE, Community Opioid Prevention Effort , supra note 43 at 5.

21

 69.

The crack epidemic of the 1980’s and 1990’s affected inner city black males while

today’s opioid epidemic is affecting predominantly white persons in both the inner city and
suburbs. While 52 percent of the County’s population is white, 48 71% of overdose deaths are
occurring in Caucasian persons. 49

48

City-Data, available at https://www.city-data.com/county/Milwaukee_County-WI.html (last visited March 2,
2018).
49

Milwaukee COPE, Community Opioid Prevention Effort, supra note 43 at 6.

22

 70.

The complexity of the opioid epidemic can be seen in the vast assortment of drug

combinations used by overdose death victims. The commonality in these deaths is the prevalence
of pharmaceutical drugs in the evidence of toxins in the toxicology reports from the Medical
Examiner. 50

50

Id. at 10.

23

 71.

Milwaukee County also has one of the highest drug overdose death rates for deaths

involving opioids in Wisconsin. From 2013-2015, Milwaukee County had a death rate of 21.4
deaths per 100,000 residents. 51
72.

The County’s death rates provide just a rough gauge for the scope of the problem.

For example, the Milwaukee Community Opioid Prevention Effort reports that for every opioidrelated death in 2015, at least 6 other people in the County experienced an overdose that required
naloxone. 52 According to the Milwaukee County Office of Emergency Management, 1,232
patients were administered naloxone in 2017 by Fire/EMS or law enforcement.
73.

As reported by the Wisconsin Department of Health Services, Milwaukee County’s

rate of neonatal abstinence syndrome for 2009 through 2014 was 8.2 per 1,000 hospital births—
exceeding the statewide average. 53
74.

The CDC has tracked prescription rates per county in the United States, identifying

the geographic “hotspots” for rates of opioid prescriptions. 54 The CDC has calculated the
geographic distribution at county levels of opioid prescriptions dispensed per 100 persons, 55
revealing that Milwaukee County has been a consistent hotspot over at least the past decade.

51

Wisconsin Department of Health Services, supra note 34 at 5.

52

Milwaukee COPE, Community Opioid Prevention Effort, supra note 43 at 2.

53

Wisconsin Dept. of Health Servs., Div. of Publ. Health, Neonatal Abstinence Syndrome Rate by County of
Residence, 2009-2014, https://www.documentcloud.org/documents/3284172-Neonatal-Abstinence-Syndrome-Rateby-Wisconsin.html (last visited February 5, 2018).
54

U.S. Prescribing Rate Maps, CDC, available at https://www.cdc.gov/drugoverdose/maps/rxrate-maps.html (last
visited Dec. 11, 2017).
55

Id.

24

 75.

According to data compiled by the CDC, in 2016, 76.8 opioid prescriptions were

dispensed for every 100 people in Milwaukee County, 56 which was above the national average of
66.5 prescriptions per 100 people. 57 The CDC’s statistics prove that the opioid prescription rates
in Milwaukee County have exceeded any legitimate medical, scientific, or industrial purpose.
The overall opioid prescribing rate in 2015 was 70.6 prescriptions per 100 people. 58 The 2015
Milwaukee County prescription rate was even higher than 2016 at 84.7 per 100 people. 59
76.

Unfortunately, the 2015 and 2016 high rates of opioid prescriptions were not an

aberration for Milwaukee County. Consistently, the opioid prescribing rates in Milwaukee
County have been significantly greater than the national average and, in many years, close to one
prescription per person. For example, compared to a national average of 75.6 opioid
prescriptions per 100 people in 2014, 60 the Milwaukee County opioid prescription rate was 89.7
per 100 people. 61
77.

The prescribing rate in Milwaukee County for opioid prescriptions was extremely

high from 2007-2013. Compared to a national prescribing rate of 78.1 per 100 persons in 2013, 62
the rate in Milwaukee County was 92.3. 63 In 2012, compared to a national prescribing rate of

56

Centers for Disease Control and Prevention, U.S. County Prescribing Rates 2016, (reporting for “Milwaukee,
WI,” here and below) available https://www.cdc.gov/drugoverdose/maps/rxcounty2016.html (last visited February
5, 2018).
57

U.S. Prescribing Rate Maps, CDC, supra note 54.

58

Id.

59

U.S. County Prescribing Rates, 2015, CDC, available at
https://www.cdc.gov/drugoverdose/maps/rxcounty2015.html (last visited February 5, 2018).
60

U.S. Prescribing Rate Maps, CDC, supra note 54.

61
U.S. County Prescribing Rates, 2014, CDC, available at
https://www.cdc.gov/drugoverdose/maps/rxcounty2014.html (last visited February 5, 2018).
62

U.S. Prescribing Rate Maps, CDC, supra note 54.

63

U.S. County Prescribing Rates, 2013, CDC, available at
https://www.cdc.gov/drugoverdose/maps/rxcounty2013.html (last visited February 5, 2018).

25

 81.3 per 100 persons, 64 the rate in Milwaukee County was almost as high as the number of
residents at 97.9 prescriptions per 100 persons. 65
78.

Compared to a national prescribing rate of 80.9 per 100 persons in 2011, 66 the rate

was tragically high at 99.5 per 100 persons – almost one prescription for every man, woman and
child in Milwaukee County. 67 In 2010, compared to a national prescribing rate of 81.2 per 100
persons, 68 the rate in Milwaukee County was significantly higher, at 99.6 per 100 persons. 69 The
prescribing rate in 2010 and 2011 for Milwaukee County was the fourth highest of any county in
the state. 70 In addition, compared to a national prescribing rate of 79.5 per 100 persons in 2009,71
the rate in Milwaukee County was significantly higher, at 94.3 per 100 persons. 72 Compared to a
national prescribing rate of 78.2 prescriptions per 100 persons in 2008, 73 the rate in Milwaukee
County was 93.3 per 100 persons. 74 In 2007, compared to a national prescribing rate of 75.9 per
100 persons, 75 the rate in Milwaukee County significantly exceeded the national average, at 93.1

64

U.S. Prescribing Rate Maps, CDC, supra note 54.

65

U.S. County Prescribing Rates, 2012, CDC, available at
https://www.cdc.gov/drugoverdose/maps/rxcounty2012.html (last visited February 5, 2018).
66

U.S. Prescribing Rate Maps, CDC, supra note 54.

67
U.S. County Prescribing Rates, 2011, CDC, available at
https://www.cdc.gov/drugoverdose/maps/rxcounty2011.html (last visited February 5, 2018).
68

U.S. Prescribing Rate Maps, CDC, supra note 54.

69

U.S. County Prescribing Rates, 2010, CDC, available at
https://www.cdc.gov/drugoverdose/maps/rxcounty2010.html (last visited February 5, 2018).
70
71

Id.
U.S. Prescribing Rate Maps, CDC, supra note 54.

72

U.S. County Prescribing Rates, 2009, CDC, available at
https://www.cdc.gov/drugoverdose/maps/rxcounty2009.html (last visited February 5, 2018).

73

U.S. Prescribing Rate Maps, CDC, supra note 54.

74

U.S. County Prescribing Rates, 2008, CDC, available at
https://www.cdc.gov/drugoverdose/maps/rxcounty2008.html (last visited February 5, 2018).
75

U.S. Prescribing Rate Maps, CDC, supra note 54.

26

 per 100 persons. 76 Compared to a national prescribing rate of 72.4 per 100 persons in 2006, 77 the
rate in Milwaukee County was 85.5 prescriptions per 100 persons. 78
79.

Milwaukee County’s rate of hospitalization encounters involving opioid poisoning

was also among the highest in the State. The rate of inpatient hospitalizations and emergency
department visits involving opioids for Milwaukee County residents from 2012 to 2014 was 82.2
per 100,000 residents, the highest rate in the State. 79
80.

The sheer volume of these dangerously addictive drugs was destined to create the

present crisis of addiction, abuse, and overdose deaths.
B. THE MANUFACTURER DEFENDANTS’ FALSE, DECEPTIVE, AND UNFAIR
MARKETING OF OPIOIDS.
81.

The opioid epidemic did not happen by accident.

82.

Before the 1990s, generally accepted standards of medical practice dictated that

opioids should only be used short-term for acute pain, pain relating to recovery from surgery, or
for cancer or palliative (end-of-life) care. Due to the lack of evidence that opioids improved
patients’ ability to overcome pain and function, coupled with evidence of greater pain complaints
as patients developed tolerance to opioids over time and the serious risk of addiction and other
side effects, the use of opioids for chronic pain was discouraged or prohibited. As a result,
doctors generally did not prescribe opioids for chronic pain.
83.

Each Manufacturer Defendant has conducted, and has continued to conduct, a

marketing scheme designed to persuade doctors and patients that opioids can and should be used
76

U.S. County Prescribing Rates, 2007, CDC, available at
https://www.cdc.gov/drugoverdose/maps/rxcounty2007.html (last visited February 5, 2018).
77

U.S. Prescribing Rate Maps, CDC, supra note 54.

78

U.S. County Prescribing Rates, 2006, CDC, available at
https://www.cdc.gov/drugoverdose/maps/rxcounty2006.html (last visited February 5, 2018).
79

Wisconsin Department of Health Services, supra note 34 at 21.

27

 for chronic pain, resulting in opioid treatment for a far broader group of patients who are much
more likely to become addicted and suffer other adverse effects from the long-term use of
opioids. In connection with this scheme, each Manufacturer Defendant spent, and continues to
spend, millions of dollars on promotional activities and materials that falsely deny or trivialize
the risks of opioids while overstating the benefits of using them for chronic pain.
84.

The Manufacturer Defendants have made false and misleading claims, contrary to

the language on their drugs’ labels, regarding the risks of using their drugs that: (1) downplayed
the serious risk of addiction; (2) created and promoted the concept of “pseudoaddiction” when
signs of actual addiction began appearing and advocated that the signs of addiction should be
treated with more opioids; (3) exaggerated the effectiveness of screening tools to prevent
addiction; (4) claimed that opioid dependence and withdrawal are easily managed; (5) denied the
risks of higher opioid dosages; and (6) exaggerated the effectiveness of “abuse-deterrent” opioid
formulations to prevent abuse and addiction. The Manufacturer Defendants have also falsely
touted the benefits of long-term opioid use, including the supposed ability of opioids to improve
function and quality of life, even though there was no scientifically reliable evidence to support
the Manufacturer Defendants’ claims.
85.

The Manufacturer Defendants have disseminated these common messages to

reverse the popular and medical understanding of opioids and risks of opioid use. They
disseminated these messages directly, through their sales representatives, in speaker groups led
by physicians the Manufacturer Defendants recruited for their support of their marketing
messages, and through unbranded marketing and industry-funded front groups.
86.

The Manufacturer Defendants’ efforts have been wildly successful. Opioids are

now the most prescribed class of drugs. Globally, opioid sales generated $11 billion in revenue

28

 for drug companies in 2010 alone; sales in the United States have exceeded $8 billion in revenue
annually since 2009. 80 In an open letter to the nation’s physicians in August 2016, the then-U.S.
Surgeon General expressly connected this “urgent health crisis” to “heavy marketing of opioids
to doctors . . . [m]any of [whom] were even taught – incorrectly – that opioids are not addictive
when prescribed for legitimate pain.” 81 This epidemic has resulted in a flood of prescription
opioids available for illicit use or sale (the supply), and a population of patients physically and
psychologically dependent on them (the demand). And when those patients can no longer afford
or obtain opioids from licensed dispensaries, they often turn to the street to buy prescription
opioids or even non-prescription opioids, like heroin.
87.

The Manufacturer Defendants intentionally continued their conduct, as alleged

herein, with knowledge that such conduct was creating the opioid nuisance and causing the
harms and damages alleged herein.
1. Each Manufacturer Defendant Used Multiple Avenues to Disseminate Their
False and Deceptive Statements about Opioids.
88.

The Manufacturer Defendants spread their false and deceptive statements by

marketing their branded opioids directly to doctors and patients in and around the State,
including in Plaintiff’s Community. Defendants also deployed seemingly unbiased and
independent third parties that they controlled to spread their false and deceptive statements about
the risks and benefits of opioids for the treatment of chronic pain throughout the State and
Plaintiff’s Community.

80

See Katherine Eban, Oxycontin: Purdue Pharma’s Painful Medicine, Fortune, Nov. 9, 2011,
http://fortune.com/2011/11/09/oxycontin-purdue-pharmas-painful-medicine/; David Crow, Drugmakers Hooked on
$10bn Opioid Habit, Fin. Times, Aug. 10, 2016, https://www. ft.com/content/f6e989a8-5dac-11e6-bb77a121aa8abd95.
81

Letter from Vivek H. Murthy, U.S. Surgeon General (Aug. 2016), http://turnthetiderx.org/.

29

 89.

The Manufacturer Defendants employed the same marketing plans and strategies

and deployed the same messages in and around the State, including in Plaintiff’s Community, as
they did nationwide. Across the pharmaceutical industry, “core message” development is funded
and overseen on a national basis by corporate headquarters. This comprehensive approach
ensures that the Manufacturer Defendants’ messages are accurately and consistently delivered
across marketing channels – including detailing visits, speaker events, and advertising – and in
each sales territory. The Manufacturer Defendants consider this high level of coordination and
uniformity crucial to successfully marketing their drugs.
90.

The Manufacturer Defendants ensure marketing consistency nationwide through

national and regional sales representative training; national training of local medical liaisons, the
company employees who respond to physician inquiries; centralized speaker training; single sets
of visual aids, speaker slide decks and sales training materials; and nationally coordinated
advertising. The Manufacturer Defendants’ sales representatives and physician speakers were
required to stick to prescribed talking points, sales messages, and slide decks, and supervisors
rode along with them periodically to both check on their performance and compliance.
ii.
91.

Direct Marketing.

The Manufacturer Defendants’ direct marketing of opioids generally proceeded on

two tracks. First, each Manufacturer Defendant conducted and continues to conduct advertising
campaigns touting the purported benefits of their branded drugs. For example, upon information
and belief, the Manufacturer Defendants spent more than $14 million on medical journal
advertising of opioids in 2011, nearly triple what they spent in 2001.
92.

Many of the Manufacturer Defendants’ branded ads deceptively portrayed the

benefits of opioids for chronic pain. For example, Endo distributed and made available on its
website opana.com a pamphlet promoting Opana ER with photographs depicting patients with
30

 physically demanding jobs like construction worker, chef, and teacher, misleadingly implying
that the drug would provide long-term pain-relief and functional improvement. Upon information
and belief, Purdue also ran a series of ads, called “Pain vignettes,” for OxyContin in 2012 in
medical journals. These ads featured chronic pain patients and recommended OxyContin for
each. One ad described a “54-year-old writer with osteoarthritis of the hands” and implied that
OxyContin would help the writer work more effectively.
93.

Second, each Manufacturer Defendant promoted the use of opioids for chronic pain

through “detailers” – sales representatives who visited individual doctors and medical staff in
their offices – and small-group speaker programs. The Manufacturer Defendants have not
corrected this misinformation. Instead, each Defendant devoted massive resources to direct sales
contacts with doctors. Upon information and belief, in 2014 alone, the Manufacturer Defendants
spent in excess of $168 million on detailing branded opioids to doctors, more than twice what
they spent on detailing in 2000.
94.

The Manufacturer Defendants’ detailing to doctors is effective. Numerous studies

indicate that marketing impacts prescribing habits, with face-to-face detailing having the greatest
influence. Even without such studies, the Manufacturer Defendants purchase, manipulate and
analyze some of the most sophisticated data available in any industry, data available from IMS
Health Holdings, Inc., to track, precisely, the rates of initial prescribing and renewal by
individual doctor, which in turn allows them to target, tailor, and monitor the impact of their core
messages. Thus, the Manufacturer Defendants know their detailing to doctors is effective.
95.

The Manufacturer Defendants’ detailers have been reprimanded for their deceptive

promotions. In March 2010, for example, the FDA found that Actavis had been distributing
promotional materials that “minimize[] the risks associated with Kadian and misleadingly

31

 suggest[] that Kadian is safer than has been demonstrated.” Those materials in particular “fail to
reveal warnings regarding potentially fatal abuse of opioids, use by individuals other than the
patient for whom the drug was prescribed.” 82
iii.
96.

Indirect Marketing.

The Manufacturer Defendants indirectly marketed their opioids using unbranded

advertising, paid speakers and “key opinion leaders” (“KOLs”), and industry-funded
organizations posing as neutral and credible professional societies and patient advocacy groups
(referred to hereinafter as “Front Groups”).
97.

The Manufacturer Defendants deceptively marketed opioids in the State and

Plaintiff’s Community through unbranded advertising – e.g., advertising that promotes opioid
use generally but does not name a specific opioid. This advertising was ostensibly created and
disseminated by independent third parties. But by funding, directing, reviewing, editing, and
distributing this unbranded advertising, the Manufacturer Defendants controlled the deceptive
messages disseminated by these third parties and acted in concert with them to falsely and
misleadingly promote opioids for the treatment of chronic pain. Much as Defendants controlled
the distribution of their “core messages” via their own detailers and speaker programs, the
Manufacturer Defendants similarly controlled the distribution of these messages in scientific
publications, treatment guidelines, Continuing Medical Education (“CME”) programs, and
medical conferences and seminars. To this end, the Manufacturer Defendants used third-party
public relations firms to help control those messages when they originated from third-parties.

82

Letter from Thomas Abrams, Dir., Div. of Drug Mktg., Advert., & Commc’ns, U.S. Food & Drug Admin., to
Doug Boothe, CEO, Actavis Elizabeth LLC (Feb. 18, 2010),
http://www.fdanews.com/ext/resources/files/archives/a/ActavisElizabethLLC.pdf.

32

 98.

The Manufacturer Defendants marketed through third-party, unbranded advertising

to avoid regulatory scrutiny because that advertising is not submitted to and typically is not
reviewed by the FDA. The Manufacturer Defendants also used third-party, unbranded
advertising to give the false appearance that the deceptive messages came from an independent
and objective source. Like the tobacco companies, the Manufacturer Defendants used third
parties that they funded, directed, and controlled to carry out and conceal their scheme to deceive
doctors and patients about the risks and benefits of long term opioid use for chronic pain.
99.

Defendants also identified doctors to serve, for payment, on their speakers’ bureaus

and to attend programs with speakers and meals paid for by Defendants. These speaker programs
provided: (1) an incentive for doctors to prescribe a particular opioid (so they might be selected
to promote the drug); (2) recognition and compensation for the doctors selected as speakers; and
(3) an opportunity to promote the drug through the speaker to his or her peers. These speakers
give the false impression that they are providing unbiased and medically accurate presentations
when they are, in fact, presenting a script prepared by Defendants. On information and belief,
these presentations conveyed misleading information, omitted material information, and failed to
correct Defendants’ prior misrepresentations about the risks and benefits of opioids.
100. Borrowing a page from Big Tobacco’s playbook, the Manufacturer Defendants
worked through third parties they controlled by: (a) funding, assisting, encouraging, and
directing doctors who served as KOLS, and (b) funding, assisting, directing, and encouraging
seemingly neutral and credible Front Groups. The Manufacturer Defendants then worked
together with those KOLs and Front Groups to taint the sources that doctors and patients relied
on for ostensibly “neutral” guidance, such as treatment guidelines, CME programs, medical
conferences and seminars, and scientific articles. Thus, working individually and collectively,

33

 and through these Front Groups and KOLs, the Manufacturer Defendants persuaded doctors and
patients that what they have long known – that opioids are addictive drugs, unsafe in most
circumstances for long-term use – was untrue, and that the compassionate treatment of pain
required opioids.
101. In 2007, multiple States sued Purdue for engaging in unfair and deceptive practices
in its marketing, promotion, and sale of OxyContin. Certain states settled their claims in a series
of Consent Judgments that prohibited Purdue from making misrepresentations in the promotion
and marketing of OxyContin in the future. By using indirect marketing strategies, however,
Purdue intentionally circumvented these restrictions. Such actions include contributing to the
creation of misleading publications and prescribing guidelines which lack reliable scientific
basis, and promoting prescribing practices which have worsened the opioid crisis.
102. Pro-opioid doctors are one of the most important avenues that the Manufacturer
Defendants use to spread their false and deceptive statements about the risks and benefits of
long-term opioid use. The Manufacturer Defendants know that doctors rely heavily and less
critically on their peers for guidance, and KOLs provide the false appearance of unbiased and
reliable support for chronic opioid therapy. For example, the State of New York found in its
settlement with Purdue that the Purdue website “In the Face of Pain” failed to disclose that
doctors who provided testimonials on the site were paid by Purdue and concluded that Purdue’s
failure to disclose these financial connections potentially misled consumers regarding the
objectivity of the testimonials.
103. Defendants utilized many KOLs, including many of the same ones.
104. Dr. Russell Portenoy, former Chairman of the Department of Pain Medicine and
Palliative Care at Beth Israel Medical Center in New York, is one example of a KOL whom the

34

 Manufacturer Defendants identified and promoted to further their marketing campaign. Dr.
Portenoy received research support, consulting fees, and honoraria from Cephalon, Endo,
Janssen, and Purdue (among others), and was a paid consultant to Cephalon and Purdue. Dr.
Portenoy was instrumental in opening the door for the regular use of opioids to treat chronic
pain. He served on the American Pain Society (“APS”) / American Academy of Pain Medicine
(“AAPM”) Guidelines Committees, which endorsed the use of opioids to treat chronic pain, first
in 1996 and again in 2009. He was also a member of the board of the American Pain Foundation
(“APF”), an advocacy organization almost entirely funded by the Manufacturer Defendants.
105. Dr. Portenoy also made frequent media appearances promoting opioids and
spreading misrepresentations, such as his claim that “the likelihood that the treatment of pain
using an opioid drug which is prescribed by a doctor will lead to addiction is extremely low.” He
appeared on Good Morning America in 2010 to discuss the use of opioids long-term to treat
chronic pain. On this widely-watched program, broadcast across the country, Dr. Portenoy
claimed: “Addiction, when treating pain, is distinctly uncommon. If a person does not have a
history, a personal history, of substance abuse, and does not have a history in the family of
substance abuse, and does not have a very major psychiatric disorder, most doctors can feel very
assured that that person is not going to become addicted.” 83
106. Dr. Portenoy later admitted that he “gave innumerable lectures in the late 1980s and
‘90s about addiction that weren’t true.” These lectures falsely claimed that fewer than 1% of
patients would become addicted to opioids. According to Dr. Portenoy, because the primary goal
was to “destigmatize” opioids, he and other doctors promoting them overstated their benefits and
glossed over their risks. Dr. Portenoy also conceded that “[d]ata about the effectiveness of
83

Good Morning America (ABC television broadcast Aug. 30, 2010).

35

 opioids does not exist.”84 Portenoy candidly stated: “Did I teach about pain management,
specifically about opioid therapy, in a way that reflects misinformation? Well, . . . I guess I
did.” 85
107. Another KOL, Dr. Lynn Webster, was the co-founder and Chief Medical Director
of Lifetree Clinical Research, an otherwise unknown pain clinic in Salt Lake City, Utah. Dr.
Webster was President of the AAPM in 2013. He is a Senior Editor of Pain Medicine, the same
journal that published Endo special advertising supplements touting Opana ER. Dr. Webster was
the author of numerous CMEs sponsored by Cephalon, Endo, and Purdue. At the same time, Dr.
Webster was receiving significant funding from the Manufacturer Defendants (including nearly
$2 million from Cephalon).
108. During a portion of his time as a KOL, Dr. Webster was under investigation for
overprescribing by the U.S. Department of Justice’s Drug Enforcement Agency, which raided his
clinic in 2010. Although the investigation was closed without charges in 2014, more than 20 of
Dr. Webster’s former patients at the Lifetree Clinic have died of opioid overdoses.
109. Ironically, Dr. Webster created and promoted the Opioid Risk Tool, a five question,
one-minute screening tool relying on patient self-reports that purportedly allows doctors to
manage the risk that their patients will become addicted to or abuse opioids. The claimed ability
to pre-sort patients likely to become addicted is an important tool in giving doctors confidence to
prescribe opioids long-term, and for this reason, references to screening appear in various
industry-supported guidelines. Versions of Dr. Webster’s Opioid Risk Tool appear on, or are
linked to, websites run by Endo, Janssen, and Purdue. Unaware of the flawed science and
84

Thomas Catan & Evan Perez, A Pain-Drug Champion Has Second Thoughts, Wall St. J., Dec. 17, 2012,
https://www.wsj.com/articles/SB10001424127887324478304578173342657044604.
85

Id.

36

 industry bias underlying this tool, certain states and public entities have incorporated the Opioid
Risk Tool into their own guidelines, indicating, also, their reliance on the Manufacturer
Defendants and those under their influence and control.
110. In 2011, Dr. Webster presented, via webinar, a program sponsored by Purdue
entitled “Managing Patient’s Opioid Use: Balancing the Need and the Risk.” Dr. Webster
recommended use of risk screening tools, urine testing, and patient agreements as a way to
prevent “overuse of prescriptions” and “overdose deaths.” This webinar was available to and was
intended to reach doctors in the State and doctors treating members of Plaintiff’s Community. 86
111. Dr. Webster also was a leading proponent of the concept of “pseudoaddiction,” the
notion that addictive behaviors should be seen not as warnings, but as indications of undertreated
pain. In Dr. Webster’s description, the only way to differentiate the two was to increase a
patient’s dose of opioids. As he and co-author Beth Dove wrote in their 2007 book Avoiding
Opioid Abuse While Managing Pain—a book that is still available online—when faced with
signs of aberrant behavior, increasing the dose “in most cases . . . should be the clinician’s first
response.” 87 Upon information and belief, Endo distributed this book to doctors. Years later, Dr.
Webster reversed himself, acknowledging that “[pseudoaddiction] obviously became too much
of an excuse to give patients more medication.” 88
112. The Manufacturer Defendants also entered into arrangements with seemingly
unbiased and independent patient and professional organizations to promote opioids for the
86

See Emerging Solutions in Pain, Managing Patient’s Opioid Use: Balancing the Need and the Risk,
http://www.emergingsolutionsinpain.com/ce-education/opioidmanagement?option=com_continued&view=frontmatter&Itemid=303&course=209 (last visited Aug. 22, 2017).

87

Lynn Webster & Beth Dove, Avoiding Opioid Abuse While Managing Pain (2007).

88

John Fauber, Painkiller Boom Fueled by Networking, Milwaukee Wisc. J. Sentinel, Feb. 18, 2012,
http://archive.jsonline.com/watchdog/watchdogreports/painkiller-boom-fueled-by-networking-dp3p2rn139609053.html.

37

 treatment of chronic pain. Under the direction and control of the Manufacturer Defendants, these
“Front Groups” generated treatment guidelines, unbranded materials, and programs that favored
chronic opioid therapy. They also assisted the Manufacturer Defendants by responding to
negative articles, by advocating against regulatory changes that would limit opioid prescribing in
accordance with the scientific evidence, and by conducting outreach to vulnerable patient
populations targeted by the Manufacturer Defendants.
113. These Front Groups depended on the Manufacturer Defendants for funding and, in
some cases, for survival. The Manufacturer Defendants also exercised control over programs and
materials created by these groups by collaborating on, editing, and approving their content, and
by funding their dissemination. In doing so, the Manufacturer Defendants made sure that the
Front Groups would generate only the messages that the Manufacturer Defendants wanted to
distribute. Despite this, the Front Groups held themselves out as independent and serving the
needs of their members – whether patients suffering from pain or doctors treating those patients.
114. Defendants Cephalon, Endo, Janssen, and Purdue, in particular, utilized many Front
Groups, including many of the same ones. Several of the most prominent are described below,
but there are many others, including the American Pain Society (“APS”), American Geriatrics
Society (“AGS”), the Federation of State Medical Boards (“FSMB”), American Chronic Pain
Association (“ACPA”), the Center for Practical Bioethics (“CPB”), the U.S. Pain Foundation
(“USPF”) and Pain & Policy Studies Group (“PPSG”). 89
115. The most prominent of the Manufacturer Defendants’ Front Groups was the
American Pain Foundation (“APF”), which, upon information and belief, received more than $10
89

See generally, e.g., Letter from Sen. Ron Wyden, U.S. Senate Comm. on Fin., to Sec. Thomas E. Price, U.S.
Dep’t of Health and Human Servs., (May 5, 2015),
https://www.finance.senate.gov/imo/media/doc/050517%20Senator%20Wyden%20to%20Secretary%20Price%20re
%20FDA%20Opioid%20Prescriber%20Working%20Group.pdf.

38

 million in funding from opioid manufacturers from 2007 until it closed its doors in May 2012,
primarily from Endo and Purdue. APF issued education guides for patients, reporters, and
policymakers that touted the benefits of opioids for chronic pain and trivialized their risks,
particularly the risk of addiction. APF also launched a campaign to promote opioids for returning
veterans, which has contributed to high rates of addiction and other adverse outcomes –
including death – among returning soldiers. APF also engaged in a significant multimedia
campaign – through radio, television and the internet – to educate patients about their “right” to
pain treatment, namely opioids. All of the programs and materials were available nationally and
were intended to reach citizens of the State and Plaintiff’s Community.
116. In 2009 and 2010, more than 80% of APF’s operating budget came from
pharmaceutical industry sources. Including industry grants for specific projects, APF received
about $2.3 million from industry sources out of total income of about $2.85 million in 2009; its
budget for 2010 projected receipts of roughly $2.9 million from drug companies, out of total
income of about $3.5 million. By 2011, upon information and belief, APF was entirely
dependent on incoming grants from defendants Purdue, Cephalon, Endo, and others to avoid
using its line of credit.
117. APF held itself out as an independent patient advocacy organization. It often
engaged in grassroots lobbying against various legislative initiatives that might limit opioid
prescribing, and thus the profitability of its sponsors. Upon information and belief, it was often
called upon to provide “patient representatives” for the Manufacturer Defendants’ promotional
activities, including for Purdue’s Partners Against Pain and Janssen’s Let’s Talk Pain. APF
functioned largely as an advocate for the interests of the Manufacturer Defendants, not patients.
Indeed, upon information and belief, as early as 2001, Purdue told APF that the basis of a grant

39

 was Purdue’s desire to “strategically align its investments in nonprofit organizations that share
[its] business interests.”
118. Plaintiff is informed, and believes, that on several occasions, representatives of the
Manufacturer Defendants, often at informal meetings at conferences, suggested activities and
publications for APF to pursue. APF then submitted grant proposals seeking to fund these
activities and publications, knowing that drug companies would support projects conceived as a
result of these communications.
119. The U.S. Senate Finance Committee began looking into APF in May 2012 to
determine the links, financial and otherwise, between the organization and the manufacturers of
opioid painkillers. The investigation caused considerable damage to APF’s credibility as an
objective and neutral third party, and the Manufacturer Defendants stopped funding it. Within
days of being targeted by Senate investigation, APF’s board voted to dissolve the organization
“due to irreparable economic circumstances.” APF “cease[d] to exist, effective immediately.” 90
120. Another front group for the Manufacturer Defendants was the American Academy
of Pain Medicine (“AAPM”). With the assistance, prompting, involvement, and funding of the
Manufacturer Defendants, the AAPM issued purported treatment guidelines and sponsored and
hosted medical education programs essential to the Manufacturer Defendants’ deceptive
marketing of chronic opioid therapy.
121. AAPM received substantial funding from opioid manufacturers. For example,
AAPM maintained a corporate relations council, whose members paid $25,000 per year (on top
of other funding) to participate. The benefits included allowing members to present educational
90

Charles Ornstein & Tracy Weber, Senate Panel Investigates Drug Companies’ Ties to Pain Groups, Wash. Post,
May 8, 2012, https://www.washingtonpost.com/national/health-science/senate-panel-investigates-drug-companiesties-to-pain-groups/2012/05/08/gIQA2X4qBU_story.html.

40

 programs at off-site dinner symposia in connection with AAPM’s marquee event – its annual
meeting held in Palm Springs, California, or other resort locations. AAPM describes the annual
event as an “exclusive venue” for offering education programs to doctors. Membership in the
corporate relations council also allows drug company executives and marketing staff to meet
with AAPM executive committee members in small settings. Defendants Endo, Purdue, and
Cephalon were members of the council and presented deceptive programs to doctors who
attended this annual event.
122. Upon information and belief, AAPM is viewed internally by Endo as “industry
friendly,” with Endo advisors and speakers among its active members. Endo attended AAPM
conferences, funded its CMEs, and distributed its publications. The conferences sponsored by
AAPM heavily emphasized sessions on opioids – 37 out of roughly 40 at one conference alone.
AAPM’s presidents have included top industry-supported KOLs Perry Fine and Lynn Webster.
Dr. Webster was even elected president of AAPM while under a DEA investigation.
123. The Manufacturer Defendants were able to influence AAPM through both their
significant and regular funding and the leadership of pro-opioid KOLs within the organization.
124. In 1996, AAPM and APS jointly issued a consensus statement, “The Use of
Opioids for the Treatment of Chronic Pain,” which endorsed opioids to treat chronic pain and
claimed that the risk of a patients’ addiction to opioids was low. Dr. Haddox, who co-authored
the AAPM/APS statement, was a paid speaker for Purdue at the time. Dr. Portenoy was the sole
consultant. The consensus statement remained on AAPM’s website until 2011, and, upon
information and belief, was taken down from AAPM’s website only after a doctor complained. 91

91

The Use of Opioids for the Treatment of Chronic Pain: A Consensus Statement From the American Academy of
Pain Medicine and the American Pain Society, 13 Clinical J. Pain 6 (1997).

41

 125. AAPM and APS issued their own guidelines in 2009 (“AAPM/APS Guidelines”)
and continued to recommend the use of opioids to treat chronic pain. 92 Treatment guidelines
have been relied upon by doctors, especially the general practitioners and family doctors targeted
by the Manufacturer Defendants. Treatment guidelines not only directly inform doctors’
prescribing practices, but are cited throughout the scientific literature and referenced by thirdparty payors in determining whether they should cover treatments for specific indications.
Pharmaceutical sales representatives employed by Endo, Actavis, and Purdue discussed
treatment guidelines with doctors during individual sales visits.
126. At least fourteen of the 21 panel members who drafted the AAPM/APS Guidelines,
including KOLs Dr. Portenoy and Dr. Perry Fine of the University of Utah, received support
from Janssen, Cephalon, Endo, and Purdue. The 2009 Guidelines promote opioids as “safe and
effective” for treating chronic pain, despite acknowledging limited evidence, and conclude that
the risk of addiction is manageable for patients regardless of past abuse histories. 93 One panel
member, Dr. Joel Saper, Clinical Professor of Neurology at Michigan State University and
founder of the Michigan Headache & Neurological Institute, resigned from the panel because of
his concerns that the 2009 Guidelines were influenced by contributions that drug companies,
including Manufacturer Defendants, made to the sponsoring organizations and committee
members. These AAPM/APS Guidelines have been a particularly effective channel of deception
and have influenced not only treating physicians, but also the body of scientific evidence on
opioids; the Guidelines have been cited hundreds of times in academic literature, were
disseminated in the State and/or Plaintiff’s Community during the relevant time period, are still
92

Roger Chou et al., Clinical Guidelines for the Use of Chronic Opioid Therapy in Chronic Non-Cancer Pain, 10 J.
Pain 113 (2009).

93

Id.

42

 available online, and were reprinted in the Journal of Pain. The Manufacturer Defendants widely
referenced and promoted the 2009 Guidelines without disclosing the lack of evidence to support
them or the Manufacturer Defendants’ financial support to members of the panel.
127. The Manufacturer Defendants worked together, through Front Groups, to spread
their deceptive messages about the risks and benefits of long-term opioid therapy. For example,
Defendants combined their efforts through the Pain Care Forum (“PCF”), which began in 2004
as an APF project. PCF is comprised of representatives from opioid manufacturers (including
Cephalon, Endo, Janssen, and Purdue) and various Front Groups, almost all of which received
substantial funding from the Manufacturer Defendants. Among other projects, PCF worked to
ensure that an FDA-mandated education project on opioids was not unacceptably negative and
did not require mandatory participation by prescribers, which the Manufacturer Defendants
determined would reduce prescribing.
2. The Manufacturer Defendants’ Marketing Scheme Misrepresented the Risks
and Benefits of Opioids.
i. The Manufacturer Defendants embarked upon a campaign of false,
deceptive, and unfair assurances grossly understating and misstating
the dangerous addiction risks of the opioid drugs.
128. To falsely assure physicians and patients that opioids are safe, the Manufacturer
Defendants deceptively trivialized and failed to disclose the risks of long-term opioid use,
particularly the risk of addiction, through a series of misrepresentations that have been
conclusively debunked by the FDA and CDC. These misrepresentations – which are described
below – reinforced each other and created the dangerously misleading impression that: (1)
starting patients on opioids was low risk because most patients would not become addicted, and
because those at greatest risk for addiction could be identified and managed; (2) patients who
displayed signs of addiction probably were not addicted and, in any event, could easily be

43

 weaned from the drugs; (3) the use of higher opioid doses, which many patients need to sustain
pain relief as they develop tolerance to the drugs, do not pose special risks; and (4) abusedeterrent opioids both prevent abuse and overdose and are inherently less addictive. The
Manufacturer Defendants have not only failed to correct these misrepresentations, they continue
to make them today.
129. Opioid manufacturers, including Defendants Endo Pharmaceuticals, Inc. and
Purdue Pharma L.P., have entered into settlement agreements with public entities that prohibit
them from making many of the misrepresentations identified in this Complaint. Yet even
afterward, each Manufacturer Defendant continued to misrepresent the risks and benefits of
long-term opioid use in the State and Plaintiff’s Community and each continues to fail to correct
its past misrepresentations.
130. Some illustrative examples of the Manufacturer Defendants’ false, deceptive, and
unfair claims about the purportedly low risk of addiction include:
a. Actavis’s predecessor caused a patient education brochure, Managing Chronic
Back Pain, to be distributed beginning in 2003 that admitted that opioid addiction
is possible, but falsely claimed that it is “less likely if you have never had an
addiction problem.” Based on Actavis’s acquisition of its predecessor’s marketing
materials along with the rights to Kadian, it appears that Actavis continued to use
this brochure in 2009 and beyond.
b. Cephalon and Purdue sponsored APF’s Treatment Options: A Guide for People
Living with Pain (2007), which suggested that addiction is rare and limited to
extreme cases of unauthorized dose escalations, obtaining duplicative opioid
prescriptions from multiple sources, or theft. This publication is still available
online. 94
c. Endo sponsored a website, “PainKnowledge,” which, upon information and
belief, claimed in 2009 that “[p]eople who take opioids as prescribed usually do
not become addicted.” Upon information and belief, another Endo website,
PainAction.com, stated “Did you know? Most chronic pain patients do not
94

Am. Pain Found., Treatment Options: A Guide for People Living in Pain (2007) [hereinafter APF, Treatment
Options], https://assets.documentcloud.org/documents/277605/apf-treatmentoptions.pdf.

44

 become addicted to the opioid medications that are prescribed for them.” Endo
also distributed an “Informed Consent” document on PainAction.com that
misleadingly suggested that only people who “have problems with substance
abuse and addiction” are likely to become addicted to opioid medications.
d. Upon information and belief, Endo distributed a pamphlet with the Endo logo
entitled Living with Someone with Chronic Pain, which stated that: “Most health
care providers who treat people with pain agree that most people do not develop
an addiction problem.”
e. Janssen reviewed, edited, approved, and distributed a patient education guide
entitled Finding Relief: Pain Management for Older Adults (2009), which
described as “myth” the claim that opioids are addictive, and asserted as fact that
“[m]any studies show that opioids are rarely addictive when used properly for the
management of chronic pain.”
f. Janssen currently runs a website, Prescriberesponsibly.com (last updated July 2,
2015), which claims that concerns about opioid addiction are “overestimated.”
g. Purdue sponsored APF’s A Policymaker’s Guide to Understanding Pain & Its
Management, which claims that less than 1% of children prescribed opioids will
become addicted and that pain is undertreated due to “[m]isconceptions about
opioid addiction.” 95
h. In 2010, Mallinckrodt sponsored an initiative “Collaborating and Acting
Responsibly to Ensure Safety (C.A.R.E.S.), through which it published and
promoted the book “Defeat Chronic Pain Now!” aimed at chronic pain patients.
The book, which is still available for sale in New Mexico and elsewhere, and is
promoted online at www.defeatchronicpainnow.com, advises laypeople who are
considering taking opioid drugs that “[o]nly rarely does opioid medication cause a
true addiction.” 96 Further, the book advises that even the issue of tolerance is
“overblown,” because “[o]nly a minority of chronic pain patients who are taking
long-term opioids develop tolerance.” In response to a hypothetical question from
a chronic back pain patient who expresses a fear of becoming addicted, the book
advises that “[i]t is very uncommon for a person with chronic pain to become
‘addicted’ to narcotics IF (1) he doesn’t have a prior history of any addiction and
(2) he only takes the medication to treat pain.”
i. Consistent with the Manufacturer Defendants’ published marketing materials,
upon information and belief, detailers for Purdue, Endo, Janssen, and Cephalon in
the State and Plaintiff’s Community minimized or omitted any discussion with
doctors of the risk of addiction; misrepresented the potential for abuse of opioids
95

Am. Pain Found., A Policymaker’s Guide to Understanding Pain and Its Management 6 (2011) [hereinafter APF,
Policymaker’s Guide], http://s3.documentcloud.org/documents/277603/apf-policymakers-guide.pdf.
96

Charles E. Argoff & Bradley S. Galer, Defeat Chronic Pain Now! (2010).

45

 with purportedly abuse-deterrent formulations; and routinely did not correct the
misrepresentations noted above.
j. Seeking to overturn the criminal conviction of a doctor for illegally prescribing
opioids, the Manufacturer Defendants’ Front Groups APF and NFP argued in an
amicus brief to the United States Fourth Circuit Court of Appeals that “patients
rarely become addicted to prescribed opioids,” citing research by their KOL, Dr.
Portenoy. 97
131. These claims are contrary to longstanding scientific evidence. A 2016 opioidprescription guideline issued by the CDC (the “2016 CDC Guideline”) explains that there is
“[e]xtensive evidence” of the “possible harms of opioids (including opioid use disorder [an
alternative term for opioid addiction], [and] overdose . . .).” 98 The 2016 CDC Guideline further
explains that “[o]pioid pain medication use presents serious risks, including overdose and opioid
use disorder” and that “continuing opioid therapy for 3 months substantially increases risk for
opioid use disorder.” 99
132. The FDA further exposed the falsity of Defendants’ claims about the low risk of
addiction when it announced changes to the labels for extended-release and long-acting
(“ER/LA”) opioids in 2013 and for immediate release (“IR”) opioids in 2016. In its
announcements, the FDA found that “most opioid drugs have ‘high potential for abuse’” and that
opioids “are associated with a substantial risk of misuse, abuse, NOWS [neonatal opioid
withdrawal syndrome], addiction, overdose, and death.” According to the FDA, because of the
“known serious risks” associated with long-term opioid use, including “risks of addiction, abuse,
and misuse, even at recommended doses, and because of the greater risks of overdose and
97

Brief of the American Pain Foundation, the National Pain Foundation, and the National Foundation for the
Treatment of Pain in Support of Appellant and Reversal of the Conviction, United States v. Hurowitz, No. 05-4474
(4th Cir. Sept. 8, 2005) [hereinafter Brief of APF] at 9.
98

Deborah Dowell et al., CDC Guideline for Prescribing Opioids for Chronic Pain—United States, 2016, Morbidity
& Mortality Wkly. Rep., Mar. 18, 2016, at 15 [hereinafter 2016 CDC Guideline],
https://www.cdc.gov/mmwr/volumes/65/rr/rr6501e1.htm.
99

Id. at 2, 25.

46

 death,” opioids should be used only “in patients for whom alternative treatment options” like
non-opioid drugs have failed. 100
133. The State of New York, in a 2016 settlement agreement with Endo, found that
opioid “use disorders appear to be highly prevalent in chronic pain patients treated with opioids,
with up to 40% of chronic pain patients treated in specialty and primary care outpatient centers
meeting the clinical criteria for an opioid use disorder.” 101 Endo had claimed on its
www.opana.com website that “[m]ost healthcare providers who treat patients with pain agree
that patients treated with prolonged opioid medicines usually do not become addicted,” but the
State of New York found that Endo had no evidence for that statement. Consistent with this,
Endo agreed not to “make statements that . . . opioids generally are non-addictive” or “that most
patients who take opioids do not become addicted” in New York. Endo remains free, however, to
make those statements in this State.
134. In addition to mischaracterizing the highly addictive nature of the drugs they were
pushing, the Manufacturer Defendants also fostered a fundamental misunderstanding of the signs
of addiction. Specifically, the Manufacturer Defendants misrepresented, to doctors and patients,
that warning signs and/or symptoms of addiction were, instead, signs of undertreated pain (i.e.
pseudoaddiction) – and instructed doctors to increase the opioid prescription dose for patients
who were already in danger.
100

Letter from Janet Woodcock, M.D., Dir., Ctr. For Drug Evaluation and Research, U.S. Food and Drug Admin.,
U.S. Dep’t of Health and Human Servs., to Andrew Koldny, M.D., President, Physicians for Responsible Opioid
Prescribing (Sept. 10, 2013), https://www.regulations.gov/contentStreamer?documentId=FDA-2012-P-08180793&attachmentNumber=1&contentType=pdf.; Letter from Janet Woodcock, M.D., Dir., Ctr. For Drug Evaluation
and Research, U.S. Food and Drug Admin., U.S. Dep’t of Health and Human Servs., to Peter R. Mathers & Jennifer
A. Davidson, Kleinfeld, Kaplan and Becker, LLP (Mar. 22, 2016),
https://www.regulations.gov/contentStreamer?documentId=FDA-2014-P-02050006&attachmentNumber=1&contentType=pdf.
101

Assurance of Discontinuance, In re Endo Health Solutions Inc. and Endo Pharm. Inc. (Assurance No. 15-228), at
16, https://ag.ny.gov/pdfs/Endo_AOD_030116-Fully_Executed.pdf.

47

 135. To this end, one of Purdue’s employees, Dr. David Haddox, invented a
phenomenon called “pseudoaddiction.” KOL Dr. Portenoy popularized the term. Examples of the
false, misleading, deceptive, and unfair statements regarding pseudoaddiction include:
a. Cephalon and Purdue sponsored Responsible Opioid Prescribing (2007), which
taught that behaviors such as “requesting drugs by name,” “demanding or
manipulative behavior,” seeing more than one doctor to obtain opioids, and
hoarding, are all signs of pseudoaddiction, rather than true addiction. 102 The 2012
edition, which remains available for sale online, continues to teach that
pseudoaddiction is real. 103
b. Janssen sponsored, funded, and edited the Let’s Talk Pain website, which in 2009
stated: “pseudoaddiction . . . refers to patient behaviors that may occur when pain
is under-treated . . . . Pseudoaddiction is different from true addiction because
such behaviors can be resolved with effective pain management.”
c. Endo sponsored a National Initiative on Pain Control (“NIPC”) CME program in
2009 entitled “Chronic Opioid Therapy: Understanding Risk While Maximizing
Analgesia,” which, upon information and belief, promoted pseudoaddiction by
teaching that a patient’s aberrant behavior was the result of untreated pain. Endo
appears to have substantially controlled NIPC by funding NIPC projects;
developing, specifying, and reviewing content; and distributing NIPC materials.
d. Purdue published a pamphlet in 2011 entitled Providing Relief, Preventing Abuse,
which, upon information and belief, described pseudoaddiction as a concept that
“emerged in the literature” to describe the inaccurate interpretation of [drugseeking behaviors] in patients who have pain that has not been effectively
treated.”
e. Upon information and belief, Purdue sponsored a CME program titled “Path of
the Patient, Managing Chronic Pain in Younger Adults at Risk for Abuse”. In a
role play, a chronic pain patient with a history of drug abuse tells his doctor that
he is taking twice as many hydrocodone pills as directed. The narrator notes that
because of pseudoaddiction, the doctor should not assume the patient is addicted
even if he persistently asks for a specific drug, seems desperate, hoards medicine,
or “overindulges in unapproved escalating doses.” The doctor treats this patient
by prescribing a high-dose, long-acting opioid.
f. In 2010, Mallinckrodt sponsored an initiative “Collaborating and Acting
Responsibly to Ensure Safety (C.A.R.E.S.), through which it published and
promoted the book “Defeat Chronic Pain Now!” aimed at chronic pain patients.
102

Scott M. Fishman, M.D., Responsible Opioid Prescribing: A Physician’s Guide (2007) at 62.

103

See Scott M. Fishman, M.D., Responsible Opioid Prescribing: A Physician’s Guide (2d ed. 2012).

48

 The book, which is still available for sale, and is promoted online at
www.defeatchronicpainnow.com, teaches laypeople that “pseudoaddiction” is
“caused by their doctor not appropriately prescribing the opioid medication.” It
teaches that “[p]seudoaddiction happens when a patient’s opioid medication is not
being prescribed in doses strong enough to provide good pain relief, or if the drug
is not being prescribed often enough throughout the day. . . When a
pseudoaddicted patient is prescribed the proper amount of opioid medication, he
or she doesn’t take any extra pills because his or her pain is relieved.”
136. In the 2016 CDC Guideline, the CDC rejects the validity of the pseudoaddiction
fallacy invented by a Purdue employee as a reason to push more opioid drugs onto already
addicted patients.
137. In addition to misstating the addiction risk and inventing the pseudoaddiction
falsehood, a third category of false, deceptive, and unfair practice is the Manufacturer
Defendants’ false instructions that addiction risk screening tools, patient contracts, urine drug
screens, and similar strategies allow them to reliably identify and safely prescribe opioids to
patients predisposed to addiction. These misrepresentations were especially insidious because the
Manufacturer Defendants aimed them at general practitioners and family doctors who lack the
time and expertise to closely manage higher-risk patients on opioids. The Manufacturer
Defendants’ misrepresentations made these doctors feel more comfortable prescribing opioids to
their patients, and patients more comfortable starting on opioid therapy for chronic pain.
Illustrative examples include:
a. Endo paid for a 2007 supplement in the Journal of Family Practice written by a
doctor who became a member of Endo’s speakers bureau in 2010. The
supplement, entitled Pain Management Dilemmas in Primary Care: Use of
Opioids, emphasized the effectiveness of screening tools, claiming that patients at
high risk of addiction could safely receive chronic opioid therapy using a
“maximally structured approach” involving toxicology screens and pill counts.
b. Purdue, upon information and belief, sponsored a 2011 webinar, Managing
Patient’s Opioid Use: Balancing the Need and Risk, which claimed that screening
tools, urine tests, and patient agreements prevent “overuse of prescriptions” and
“overdose deaths.”

49

 c. As recently as 2015, upon information and belief, Purdue has represented in
scientific conferences that “bad apple” patients – and not opioids – are the source
of the addiction crisis and that once those “bad apples” are identified, doctors can
safely prescribe opioids without causing addiction.
138. The 2016 CDC Guideline confirms the falsity of these claims. The Guideline
explains that there are no studies assessing the effectiveness of risk mitigation strategies “for
improving outcomes related to overdose, addiction, abuse or misuse.” 104
139. A fourth category of deceptive messaging regarding dangerous opioids is the
Manufacturer Defendants’ false assurances regarding the alleged ease of eliminating opioid
dependence. The Manufacturer Defendants falsely claimed that opioid dependence can easily be
addressed by tapering and that opioid withdrawal is not a problem, but they failed to disclose the
increased difficulty of stopping opioids after long-term use. In truth, the 2016 CDC Guideline
explains that the symptoms of opioid withdrawal include abdominal pain, vomiting, diarrhea,
sweating, tremor, tachycardia, drug cravings, anxiety, insomnia, spontaneous abortion and
premature labor in pregnant women. 105
140. The Manufacturer Defendants nonetheless downplayed the severity of opioid
detoxification. For example, upon information and belief, a CME sponsored by Endo, entitled
Persistent Pain in the Older Adult, claimed that withdrawal symptoms can be avoided by
tapering a patient’s opioid dose by 10%-20% for 10 days. And Purdue sponsored APF’s A
Policymaker’s Guide to Understanding Pain & Its Management, which claimed that
“[s]ymptoms of physical dependence can often be ameliorated by gradually decreasing the dose

104

Id. at 11.

105

Id. at 26.

50

 of medication during discontinuation” without mentioning any hardships that might occur. 106
Similarly, in the 2010 Mallinckrodt/C.A.R.E.S. publication “Defeat Chronic Pain Now!”
potential opioid users are advised that tolerance to opioids is “easily remedied,” and that “[a]ll
patients can be safely taken off opioid medication if the dose is slowly tapered down by their
doctor.”
141. A fifth category of false, deceptive, and unfair statements the Manufacturer
Defendants made to sell more drugs is that opioid dosages could be increased indefinitely
without added risk. The ability to escalate dosages was critical to Defendants’ efforts to market
opioids for long-term use to treat chronic pain because, absent this misrepresentation, doctors
would have abandoned treatment when patients built up tolerance and lower dosages did not
provide pain relief. The Manufacturer Defendants’ deceptive claims include:
a. Upon information and belief, Actavis’s predecessor created a patient brochure for
Kadian in 2007 that stated, “Over time, your body may become tolerant of your
current dose. You may require a dose adjustment to get the right amount of pain
relief. This is not addiction.” Based on Actavis’s acquisition of its predecessor’s
marketing materials along with the rights to Kadian, Actavis appears to have
continued to use these materials in 2009 and beyond.
b. Cephalon and Purdue sponsored APF’s Treatment Options: A Guide for People
Living with Pain (2007), which claims that some patients “need” a larger dose of
an opioid, regardless of the dose currently prescribed. The guide stated that
opioids have “no ceiling dose” and insinuated that they are therefore the most
appropriate treatment for severe pain. 107 This publication is still available online.
c. Endo sponsored a website, “PainKnowledge,” which, upon information and
belief, claimed in 2009 that opioid dosages may be increased until “you are on the
right dose of medication for your pain.”
d. Endo distributed a pamphlet edited by a KOL entitled Understanding Your Pain:
Taking Oral Opioid Analgesics (2004 Endo Pharmaceuticals PM-0120). In Q&A
106

Am. Pain Found., A Policymaker’s Guide to Understanding Pain and Its Management 6 (2011) [hereinafter APF,
Policymaker’s Guide], http://s3.documentcloud.org/documents/277603/apf-policymakers-guide.pdf., at 32.
107

Am. Pain Found., Treatment Options: A Guide for People Living in Pain (2007) [hereinafter APF, Treatment
Options], https://assets.documentcloud.org/documents/277605/apf-treatmentoptions.pdf., at 12.

51

 format, it asked “If I take the opioid now, will it work later when I really need it?”
The response is, “The dose can be increased. . . . You won’t ‘run out’ of pain
relief.” 108
e. Janssen sponsored a patient education guide entitled Finding Relief: Pain
Management for Older Adults (2009), which was distributed by its sales force.
This guide listed dosage limitations as “disadvantages” of other pain medicines
but omitted any discussion of risks of increased opioid dosages.
f. Upon information and belief, Purdue’s In the Face of Pain website promoted the
notion that if a patient’s doctor does not prescribe what, in the patient’s view, is a
sufficient dosage of opioids, he or she should find another doctor who will.
g. Purdue sponsored APF’s A Policymaker’s Guide to Understanding Pain & Its
Management, which taught that dosage escalations are “sometimes necessary,”
and that “the need for higher doses of medication is not necessarily indicative of
addiction,” but inaccurately downplayed the risks from high opioid dosages. 109
h. In 2007, Purdue sponsored a CME entitled “Overview of Management Options”
that was available for CME credit and available until at least 2012. The CME was
edited by a KOL and taught that Non-steroidal Anti-inflammatory Drugs
(“NSAIDs”) and other drugs, but not opioids, are unsafe at high dosages.
i. Purdue presented a 2015 paper at the College on the Problems of Drug
Dependence, “the oldest and largest organization in the US dedicated to
advancing a scientific approach to substance use and addictive disorders,”
challenging the correlation between opioid dosage and overdose. 110
j. Seeking to overturn the criminal conviction of a doctor for illegally prescribing
opioids, the Manufacturer Defendants’ Front Groups APF and NFP argued in an
amicus brief to the United States Fourth Circuit Court of Appeals that “there is no
‘ceiling dose’” for opioids. 111
k. In the 2010 Mallinckrodt/C.A.R.E.S. publication “Defeat Chronic Pain Now!”,
potential opioid users are warned about the risk of “[p]seudoaddiction [b]ecause
of a [l]ow [d]ose,” and advised that this condition may be corrected through the
prescription of a higher dose. Similarly, the book recommends that for chronic
pain patients, the opioid dose should be “gradually increased to find the best daily

108

Margo McCaffery & Chris Pasero, Endo Pharm., Understanding Your Pain: Taking Oral Opioid Analgesics
(Russell K Portenoy, M.D., ed., 2004).
109
Am. Pain Found., A Policymaker’s Guide to Understanding Pain and Its Management 6 (2011) [hereinafter APF,
Policymaker’s Guide], http://s3.documentcloud.org/documents/277603/apf-policymakers-guide.pdf., at 32.
110

The College on Problems of Drug Dependence, About the College, http://cpdd.org (last visited Aug. 21, 2017).

111

Brief of APF, at 9.

52

 dose, as is done with all the other oral drugs.” The book discusses the risks of
NSAIDs and other drugs at higher doses, but not explain this risk for opioids.
142. Once again, the 2016 CDC Guideline reveals that the Manufacturer Defendants’
representations regarding opioids were lacking in scientific evidence. The 2016 CDC Guideline
clarifies that the “[b]enefits of high-dose opioids for chronic pain are not established” while the
“risks for serious harms related to opioid therapy increase at higher opioid dosage.” 112 More
specifically, the CDC explains that “there is now an established body of scientific evidence
showing that overdose risk is increased at higher opioid dosages.” 113 The CDC also states that
there is an increased risk “for opioid use disorder, respiratory depression, and death at higher
dosages.” 114 That is why the CDC advises doctors to “avoid increasing dosage” to above 90
morphine milligram equivalents per day. 115
143. Defendants’ deceptive marketing of the so-called abuse-deterrent properties of
some of their opioids has created false impressions that these opioids can cure addiction and
abuse.
144. The Manufacturer Defendants made misleading claims about the ability of their socalled abuse-deterrent opioid formulations to deter abuse. For example, Endo’s advertisements
for the 2012 reformulation of Opana ER claimed that it was designed to be crush resistant, in a
way that suggested it was more difficult to abuse. This claim was false. The FDA warned in a
2013 letter that Opana ER Extended-Release Tablets’ “extended-release features can be
compromised, causing the medication to ‘dose dump,’ when subject to . . . forms of manipulation

112

2016 CDC Guideline at 22–23.

113

Id. at 23–24.

114

Id. at 21.

115

Id. at 16.

53

 such as cutting, grinding, or chewing, followed by swallowing.” 116 Also troubling, Opana ER
can be prepared for snorting using commonly available methods and “readily prepared for
injection.” 117 The letter discussed “the troubling possibility that a higher (and rising) percentage
of [Opana ER Extended-Release Tablet] abuse is occurring via injection.” 118 Endo’s own studies,
which it failed to disclose, showed that Opana ER could still be ground and chewed. In June
2017, the FDA requested that Opana ER be removed from the market.
ii. The Manufacturer Defendants embarked upon a campaign of
false, deceptive, and unfair assurances grossly overstating the
benefits of the opioid drugs.
145. To convince doctors and patients that opioids should be used to treat chronic pain,
the Manufacturer Defendants also had to persuade them that there was a significant upside to
long-term opioid use. But as the CDC Guideline makes clear, “[n]o evidence shows a long-term
benefit of opioids in pain and function versus no opioids for chronic pain with outcomes
examined at least 1 year later (with most placebo-controlled randomized trials ≤ 6 weeks in
duration)” and that other treatments were more or equally beneficial and less harmful than longterm opioid use. 119 The FDA, too, has recognized the lack of evidence to support long-term
opioid use. Despite this, Defendants falsely and misleadingly touted the benefits of long-term
opioid use and falsely and misleadingly suggested that these benefits were supported by
scientific evidence.
146. Some illustrative examples of the Manufacturer Defendants’ false claims are:

116

Letter from Janet Woodcock, M.D., Dir., Ctr. For Drug Evaluation and Research, U.S. Food and Drug Admin.,
U.S. Dep’t of Health and Human Servs., to Robert Barto, Vice President, Reg. Affairs, Endo Pharm. Inc. (May 10,
2013), at 5.
117

Id. at 6.

118

Id. at 6 n.21.

119

Id. at 15.

54

 a. Upon information and belief, Actavis distributed an advertisement claiming that
the use of Kadian to treat chronic pain would allow patients to return to work,
relieve “stress on your body and your mental health,” and help patients enjoy their
lives.
b. Endo distributed advertisements that claimed that the use of Opana ER for chronic
pain would allow patients to perform demanding tasks like construction work or
work as a chef and portrayed seemingly healthy, unimpaired subjects.
c. Janssen sponsored and edited a patient education guide entitled Finding Relief:
Pain Management for Older Adults (2009) – which states as “a fact” that “opioids
may make it easier for people to live normally.” The guide lists expected
functional improvements from opioid use, including sleeping through the night,
returning to work, recreation, sex, walking, and climbing stairs.
d. Janssen promoted Ultracet for everyday chronic pain and distributed posters, for
display in doctors’ offices, of presumed patients in active professions; the caption
read, “Pain doesn’t fit into their schedules.”
e. Upon information and belief, Purdue ran a series of advertisements for OxyContin
in 2012 in medical journals entitled “Pain vignettes,” which were case studies
featuring patients with pain conditions persisting over several months and
recommending OxyContin for them. The ads implied that OxyContin improves
patients’ function.
f. Responsible Opioid Prescribing (2007), sponsored and distributed by Cephalon,
Endo and Purdue, taught that relief of pain by opioids, by itself, improved
patients’ function.
g. Cephalon and Purdue sponsored APF’s Treatment Options: A Guide for People
Living with Pain (2007), which counseled patients that opioids “give [pain
patients] a quality of life we deserve.” 120 This publication is still available online.
h. Endo’s NIPC website “PainKnowledge” claimed in 2009, upon information and
belief, that with opioids, “your level of function should improve; you may find
you are now able to participate in activities of daily living, such as work and
hobbies, that you were not able to enjoy when your pain was worse.” Elsewhere,
the website touted improved quality of life (as well as “improved function”) as
benefits of opioid therapy. The grant request that Endo approved for this project
specifically indicated NIPC’s intent to make misleading claims about function,
and Endo closely tracked visits to the site.

120

Am. Pain Found., Treatment Options: A Guide for People Living in Pain (2007) [hereinafter APF, Treatment
Options], https://assets.documentcloud.org/documents/277605/apf-treatmentoptions.pdf.

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 i. Endo was the sole sponsor, through NIPC, of a series of CMEs entitled
“Persistent Pain in the Older Patient.” 121 Upon information and belief, a CME
disseminated via webcast claimed that chronic opioid therapy has been “shown to
reduce pain and improve depressive symptoms and cognitive functioning.”
j. Janssen sponsored and funded a multimedia patient education campaign called
“Let’s Talk Pain.” One feature of the campaign was to complain that patients
were under-treated. In 2009, upon information and belief, a Janssen-sponsored
website, part of the “Let’s Talk Pain” campaign, featured an interview edited by
Janssen claiming that opioids allowed a patient to “continue to function.”
k. Purdue sponsored the development and distribution of APF’s A Policymaker’s
Guide to Understanding Pain & Its Management, which claimed that “[m]ultiple
clinical studies” have shown that opioids are effective in improving “[d]aily
function,” “[p]sychological health,” and “[o]verall health-related quality of life
for chronic pain.” 122 The Policymaker’s Guide was originally published in 2011.
l. Purdue’s, Cephalon’s, Endo’s, and Janssen’s sales representatives have conveyed
and continue to convey the message that opioids will improve patient function.
147. As the FDA and other agencies have made clear for years, these claims have no
support in the scientific literature.
148. In 2010, the FDA warned Actavis, in response to its advertising of Kadian
described above, that “we are not aware of substantial evidence or substantial clinical experience
demonstrating that the magnitude of the effect of the drug [Kadian] has in alleviating pain, taken
together with any drug-related side effects patients may experience . . . results in any overall
positive impact on a patient’s work, physical and mental functioning, daily activities, or
enjoyment of life.” 123 And in 2008, upon information and belief, the FDA sent a warning letter to
an opioid manufacturer, making it clear “that [the claim that] patients who are treated with the

121

E.g., NIPC, Persistent Pain and the Older Patient (2007),
https://www.painedu.org/Downloads/NIPC/Activities/B173_Providence_RI_%20Invite.pdf.
122

Am. Pain Found., A Policymaker’s Guide to Understanding Pain and Its Management 6 (2011) [hereinafter APF,
Policymaker’s Guide], http://s3.documentcloud.org/documents/277603/apf-policymakers-guide.pdf., at 29.
123

Letter from Thomas Abrams, Dir., Div. of Drug Mktg., Advert., & Commc’ns, U.S. Food & Drug Admin., to
Doug Boothe, CEO, Actavis Elizabeth LLC (Feb. 18, 2010),
http://www.fdanews.com/ext/resources/files/archives/a/ActavisElizabethLLC.pdf.

56

 drug experience an improvement in their overall function, social function, and ability to perform
daily activities . . . has not been demonstrated by substantial evidence or substantial clinical
experience.”
149. The Manufacturer Defendants also falsely and misleadingly emphasized or
exaggerated the risks of competing medications like NSAIDs, so that doctors and patients would
look to opioids first for the treatment of chronic pain. Once again, these misrepresentations by
the Manufacturer Defendants contravene pronouncements by and guidance from the FDA and
CDC based on the scientific evidence. Indeed, the FDA changed the labels for extended-release
and long-acting (“ER/LA”) opioids in 2013 and immediate-release (“IR”) opioids in 2016 to
state that opioids should only be used as a last resort “in patients for which alternative treatment
options” like non-opioid drugs “are inadequate.” And the 2016 CDC Guideline states that
NSAIDs, not opioids, should be the first-line treatment for chronic pain, particularly arthritis and
lower back pain. 124 Purdue misleadingly promoted OxyContin as being unique among opioids in
providing 12 continuous hours of pain relief with one dose. In fact, OxyContin does not last for
12 hours – a fact that Purdue has known at all times relevant to this action. Upon information and
belief, Purdue’s own research shows that OxyContin wears off in under six hours in one quarter
of patients and in under 10 hours in more than half. This is because OxyContin tablets release
approximately 40% of their active medicine immediately, after which release tapers. This
triggers a powerful initial response, but provides little or no pain relief at the end of the dosing
period, when less medicine is released. This phenomenon is known as “end of dose” failure, and
the FDA found in 2008 that a “substantial proportion” of chronic pain patients taking OxyContin
experience it. This not only renders Purdue’s promise of 12 hours of relief false and deceptive, it
124

2016 CDC Guideline at 12.

57

 also makes OxyContin more dangerous because the declining pain relief patients experience
toward the end of each dosing period drives them to take more OxyContin before the next dosing
period begins, quickly increasing the amount of drug they are taking and spurring growing
dependence.
150. Purdue’s competitors were aware of this problem. For example, upon information
and belief, Endo ran advertisements for Opana ER referring to “real” 12-hour dosing.
Nevertheless, Purdue falsely promoted OxyContin as if it were effective for a full 12 hours.
Upon information and belief, Purdue’s sales representatives continue to tell doctors that
OxyContin lasts a full 12 hours.
151. Front Groups supported by Purdue likewise echoed these representations. For
example, in an amicus brief submitted to the Supreme Court of Ohio by the American Pain
Foundation, the National Foundation for the Treatment of Pain and the Ohio Pain Initiative in
support of Purdue, those amici represented:
OxyContin is particularly useful for sustained long-term pain because it comes in
higher, compact pills with a slow release coating. OxyContin pills can work for
12 hours. This makes it easier for patients to comply with dosing requirements
without experiencing a roller-coaster of pain relief followed quickly by pain
renewal that can occur with shorter acting medications. It also helps the patient
sleep through the night, which is often impossible with short-acting medications.
For many of those serviced by Pain Care Amici, OxyContin has been a miracle
medication. 125
152. Cephalon deceptively marketed its opioids Actiq and Fentora for chronic pain even
though the FDA has expressly limited their use to the treatment of cancer pain in opioid tolerant
individuals. Both Actiq and Fentora are extremely powerful fentanyl-based IR opioids. Neither is
approved for or has been shown to be safe or effective for chronic pain. Indeed, the FDA
125

Reply Brief of Amicus Curiae of the American Pain Foundation, The National Foundation for the Treatment of
Pain and the Ohio Pain Initiative Supporting Appellants, Howland v. Purdue Pharma L.P., No. 2003-1538 (Ohio
Apr. 13, 2004), 2004 WL 1637768, at *4 (footnote omitted).

58

 expressly prohibited Cephalon from marketing Actiq for anything but cancer pain, and refused to
approve Fentora for the treatment of chronic pain because of the potential harm, including the
high risk of “serious and life-threatening adverse events” and abuse – which are greatest in noncancer patients. The FDA also issued a Public Health Advisory in 2007 emphasizing that Fentora
should only be used for cancer patients who are opioid-tolerant and should not be used for any
other conditions, such as migraines, post-operative pain, or pain due to injury. 126 Specifically, the
FDA advised that Fentora “is only approved for breakthrough cancer pain in patients who are
opioid-tolerant, meaning those patients who take a regular, daily, around-the-clock narcotic pain
medication.” 127
153. Despite this, Cephalon conducted and continues to conduct a well-funded campaign
to promote Actiq and Fentora for chronic pain and other non-cancer conditions for which it was
not approved, appropriate, and for which it is not safe. As part of this campaign, Cephalon used
CMEs, speaker programs, KOLs, journal supplements, and detailing by its sales representatives
to give doctors the false impression that Actiq and Fentora are safe and effective for treating noncancer pain. For example:
a. Cephalon paid to have a CME it sponsored, Opioid-Based Management of Persistent
and Breakthrough Pain, published in a supplement of Pain Medicine News in 2009.
The CME instructed doctors that “[c]linically, broad classification of pain syndromes
as either cancer- or non-cancer-related has limited utility” and recommended Actiq
and Fentora for patients with chronic pain.
b. Upon information and belief, Cephalon’s sales representatives set up hundreds of
speaker programs for doctors, including many non-oncologists, which promoted
Actiq and Fentora for the treatment of non-cancer pain.

126

See U.S. Food & Drug Admin., Public Health Advisory: Important Information for the Safe Use of Fentora
(fentanyl buccal tablets) (Sept. 26, 2007),
https://www.fda.gov/Drugs/DrugSafety/PostmarketDrugSafetyInformationforPatientsandProviders/ucm051273.htm.

127

Id.

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 c. In December 2011, Cephalon widely disseminated a journal supplement entitled
“Special Report: An Integrated Risk Evaluation and Mitigation Strategy for Fentanyl
Buccal Tablet (FENTORA) and Oral Transmucosal Fentanyl Citrate (ACTIQ)” to
Anesthesiology News, Clinical Oncology News, and Pain Medicine News – three
publications that are sent to thousands of anesthesiologists and other medical
professionals. The Special Report openly promotes Fentora for “multiple causes of
pain” – and not just cancer pain.
154. Cephalon’s deceptive marketing gave doctors and patients the false impression that
Actiq and Fentora were not only safe and effective for treating chronic pain, but were also
approved by the FDA for such uses.
155. Purdue also unlawfully and unfairly failed to report or address illicit and unlawful
prescribing of its drugs, despite knowing about it for years. Purdue’s sales representatives have
maintained a database since 2002 of doctors suspected of inappropriately prescribing its drugs.
Rather than report these doctors to state medical boards or law enforcement authorities (as
Purdue is legally obligated to do) or cease marketing to them, Purdue used the list to demonstrate
the high rate of diversion of OxyContin – the same OxyContin that Purdue had promoted as less
addictive – in order to persuade the FDA to bar the manufacture and sale of generic copies of the
drug because the drug was too likely to be abused. In an interview with the Los Angeles Times,
Purdue’s senior compliance officer acknowledged that in five years of investigating suspicious
pharmacies, Purdue failed to take action – even where Purdue employees personally witnessed
the diversion of its drugs. The same was true of prescribers; despite its knowledge of illegal
prescribing, Purdue did not report that a Los Angeles clinic prescribed more than 1.1 million
OxyContin tablets and that Purdue’s district manager described it internally as “an organized

60

 drug ring” until years after law enforcement shut it down. In doing so, Purdue protected its own
profits at the expense of public health and safety. 128
156. Like Purdue, Endo has been cited for its failure to set up an effective system for
identifying and reporting suspicious prescribing. In its settlement agreement with Endo, the State
of New York found that Endo failed to require sales representatives to report signs of abuse,
diversion, and inappropriate prescribing; paid bonuses to sales representatives for detailing
prescribers who were subsequently arrested or convicted for illegal prescribing; and failed to
prevent sales representatives from visiting prescribers whose suspicious conduct had caused
them to be placed on a no-call list.
3. The Manufacturer Defendants Targeted Susceptible Prescribers and
Vulnerable Patient Populations.
157. As a part of their deceptive marketing scheme, the Manufacturer Defendants
identified and targeted susceptible prescribers and vulnerable patient populations in the U.S.,
including this State and Plaintiff’s Community. For example, the Manufacturer Defendants
focused their deceptive marketing on primary care doctors, who were more likely to treat chronic
pain patients and prescribe them drugs, but were less likely to be educated about treating pain
and the risks and benefits of opioids and therefore more likely to accept the Manufacturer
Defendants’ misrepresentations.
158. The Manufacturer Defendants also targeted vulnerable patient populations like the
elderly and veterans, who tend to suffer from chronic pain. The Manufacturer Defendants
targeted these vulnerable patients even though the risks of long-term opioid use were
significantly greater for them. For example, the 2016 CDC Guideline observes that existing
128

Harriet Ryan et al., More Than 1 Million Oxycontin Pills Ended Up in the Hands of Criminals and Addicts. What
the Drugmaker Knew, L.A. Times, July 10, 2016, http://www.latimes.com/projects/la-me-oxycontin-part2/.

61

 evidence confirms that elderly patients taking opioids suffer from elevated fall and fracture risks,
reduced renal function and medication clearance, and a smaller window between safe and unsafe
dosages. 129 The 2016 CDC Guideline concludes that there must be “additional caution and
increased monitoring” to minimize the risks of opioid use in elderly patients. Id. at 27. The same
is true for veterans, who are more likely to use anti-anxiety drugs (benzodiazepines) for posttraumatic stress disorder, which interact dangerously with opioids.
4. The Manufacturer Defendants made Materially Deceptive Statements and
Concealed Material Facts.
159. As alleged herein, the Manufacturer Defendants made and/or disseminated
deceptive statements regarding material facts and further concealed material facts, in the course
of manufacturing, marketing, and selling prescription opioids. The Manufacturer Defendants’
actions were intentional and/or unlawful. Such statements include, but are not limited to, those
set out below and alleged throughout this Complaint.
160. Defendant Purdue made and/or disseminated deceptive statements, and concealed
material facts in such a way to make their statements deceptive, including, but not limited to, the
following:
a. Creating, sponsoring, and assisting in the distribution of patient education
materials distributed to consumers that contained deceptive statements;
b. Creating and disseminating advertisements that contained deceptive statements
concerning the ability of opioids to improve function long-term and concerning
the evidence supporting the efficacy of opioids long-term for the treatment of
chronic non-cancer pain;
c. Disseminating misleading statements concealing the true risk of addiction and
promoting the deceptive concept of pseudoaddiction through Purdue’s own
unbranded publications and on internet sites Purdue operated that were marketed
to and accessible by consumers;

129

2016 CDC Guideline at 13.

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 d. Distributing brochures to doctors, patients, and law enforcement officials that
included deceptive statements concerning the indicators of possible opioid abuse;
e. Sponsoring, directly distributing, and assisting in the distribution of publications
that promoted the deceptive concept of pseudoaddiction, even for high-risk
patients;
f. Endorsing, directly distributing, and assisting in the distribution of publications
that presented an unbalanced treatment of the long-term and dose-dependent risks
of opioids versus NSAIDs;
g. Providing significant financial support to pro-opioid KOL doctors who made
deceptive statements concerning the use of opioids to treat chronic non-cancer
pain;
h. Providing needed financial support to pro-opioid pain organizations that made
deceptive statements, including in patient education materials, concerning the use
of opioids to treat chronic non-cancer pain;
i. Assisting in the distribution of guidelines that contained deceptive statements
concerning the use of opioids to treat chronic non-cancer pain and misrepresented
the risks of opioid addiction;
j. Endorsing and assisting in the distribution of CMEs containing deceptive
statements concerning the use of opioids to treat chronic non-cancer pain;
k. Developing and disseminating scientific studies that misleadingly concluded
opioids are safe and effective for the long-term treatment of chronic non-cancer
pain and that opioids improve quality of life, while concealing contrary data;
l. Assisting in the dissemination of literature written by pro-opioid KOLs that
contained deceptive statements concerning the use of opioids to treat chronic
noncancer pain;
m. Creating, endorsing, and supporting the distribution of patient and prescriber
education materials that misrepresented the data regarding the safety and efficacy
of opioids for the long-term treatment of chronic non-cancer pain, including
known rates of abuse and addiction and the lack of validation for long-term
efficacy;
n. Targeting veterans by sponsoring and disseminating patient education marketing
materials that contained deceptive statements concerning the use of opioids to
treat chronic non-cancer pain;
o. Targeting the elderly by assisting in the distribution of guidelines that contained
deceptive statements concerning the use of opioids to treat chronic non-cancer
pain and misrepresented the risks of opioid addiction in this population;

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 p. Exclusively disseminating misleading statements in education materials to
hospital doctors and staff while purportedly educating them on new pain
standards;
q. Making deceptive statements concerning the use of opioids to treat chronic
noncancer pain to prescribers through in-person detailing; and
r. Withholding from law enforcement the names of prescribers Purdue believed to
be facilitating the diversion of its opioid, while simultaneously marketing opioids
to these doctors by disseminating patient and prescriber education materials and
advertisements and CMEs they knew would reach these same prescribers.
161. Defendant Endo made and/or disseminated deceptive statements, and concealed
material facts in such a way to make their statements deceptive, including, but not limited to, the
following:
a. Creating, sponsoring, and assisting in the distribution of patient education
materials that contained deceptive statements;
b. Creating and disseminating advertisements that contained deceptive statements
concerning the ability of opioids to improve function long-term and concerning
the evidence supporting the efficacy of opioids long-term for the treatment of
chronic non-cancer pain;
c. Creating and disseminating paid advertisement supplements in academic journals
promoting chronic opioid therapy as safe and effective for long term use for high
risk patients;
d. Creating and disseminating advertisements that falsely and inaccurately conveyed
the impression that Endo’s opioids would provide a reduction in oral, intranasal,
or intravenous abuse;
e. Disseminating misleading statements concealing the true risk of addiction and
promoting the misleading concept of pseudoaddiction through Endo’s own
unbranded publications and on internet sites Endo sponsored or operated;
f. Endorsing, directly distributing, and assisting in the distribution of publications
that presented an unbalanced treatment of the long-term and dose-dependent risks
of opioids versus NSAIDs;
g. Providing significant financial support to pro-opioid KOLs, who made deceptive
statements concerning the use of opioids to treat chronic non-cancer pain;
h. Providing needed financial support to pro-opioid pain organizations – including
over $5 million to the organization responsible for many of the most egregious
misrepresentations – that made deceptive statements, including in patient
64

 education materials, concerning the use of opioids to treat chronic non-cancer
pain;
i. Targeting the elderly by assisting in the distribution of guidelines that contained
deceptive statements concerning the use of opioids to treat chronic non-cancer
pain and misrepresented the risks of opioid addiction in this population;
j. Endorsing and assisting in the distribution of CMEs containing deceptive
statements concerning the use of opioids to treat chronic non-cancer pain;
k. Developing and disseminating scientific studies that deceptively concluded
opioids are safe and effective for the long-term treatment of chronic non-cancer
pain and that opioids improve quality of life, while concealing contrary data;
l. Directly distributing and assisting in the dissemination of literature written by
pro-opioid KOLs that contained deceptive statements concerning the use of
opioids to treat chronic non-cancer pain, including the concept of
pseudoaddiction;
m. Creating, endorsing, and supporting the distribution of patient and prescriber
education materials that misrepresented the data regarding the safety and efficacy
of opioids for the long-term treatment of chronic non-cancer pain, including
known rates of abuse and addiction and the lack of validation for long-term
efficacy; and
n. Making deceptive statements concerning the use of opioids to treat chronic noncancer pain to prescribers through in-person detailing.
162. Defendant Janssen made and/or disseminated deceptive statements, and concealed
material facts in such a way to make their statements deceptive, including, but not limited to, the
following:
a. Creating, sponsoring, and assisting in the distribution of patient education
materials that contained deceptive statements;
b. Directly disseminating deceptive statements through internet sites over which
Janssen exercised final editorial control and approval stating that opioids are safe
and effective for the long-term treatment of chronic non-cancer pain and that
opioids improve quality of life, while concealing contrary data;
c. Disseminating deceptive statements concealing the true risk of addiction and
promoting the deceptive concept of pseudoaddiction through internet sites over
which Janssen exercised final editorial control and approval;

65

 d. Promoting opioids for the treatment of conditions for which Janssen knew, due to
the scientific studies it conducted, that opioids were not efficacious and
concealing this information;
e. Sponsoring, directly distributing, and assisting in the dissemination of patient
education publications over which Janssen exercised final editorial control and
approval, which presented an unbalanced treatment of the long-term and dose
dependent risks of opioids versus NSAIDs;
f. Providing significant financial support to pro-opioid KOLs, who made deceptive
statements concerning the use of opioids to treat chronic non-cancer pain;
g. Providing necessary financial support to pro-opioid pain organizations that made
deceptive statements, including in patient education materials, concerning the use
of opioids to treat chronic non-cancer pain;
h. Targeting the elderly by assisting in the distribution of guidelines that contained
deceptive statements concerning the use of opioids to treat chronic non-cancer
pain and misrepresented the risks of opioid addiction in this population;
i. Targeting the elderly by sponsoring, directly distributing, and assisting in the
dissemination of patient education publications targeting this population that
contained deceptive statements about the risks of addiction and the adverse effects
of opioids, and made false statements that opioids are safe and effective for the
long-term treatment of chronic non-cancer pain and improve quality of life, while
concealing contrary data;
j. Endorsing and assisting in the distribution of CMEs containing deceptive
statements concerning the use of opioids to treat chronic non-cancer pain;
k. Directly distributing and assisting in the dissemination of literature written by
pro-opioid KOLs that contained deceptive statements concerning the use of
opioids to treat chronic non-cancer pain, including the concept of
pseudoaddiction;
l. Creating, endorsing, and supporting the distribution of patient and prescriber
education materials that misrepresented the data regarding the safety and efficacy
of opioids for the long-term treatment of chronic non-cancer pain, including
known rates of abuse and addiction and the lack of validation for long-term
efficacy;
m. Targeting veterans by sponsoring and disseminating patient education marketing
materials that contained deceptive statements concerning the use of opioids to
treat chronic non-cancer pain; and
n. Making deceptive statements concerning the use of opioids to treat chronic noncancer pain to prescribers through in-person detailing.

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 163. Defendant Cephalon made and/or disseminated untrue, false and deceptive
statements, and concealed material facts in such a way to make their statements deceptive,
including, but not limited to, the following:
a. Creating, sponsoring, and assisting in the distribution of patient education
materials that contained deceptive statements;
b. Sponsoring and assisting in the distribution of publications that promoted the
deceptive concept of pseudoaddiction, even for high-risk patients;
c. Providing significant financial support to pro-opioid KOL doctors who made
deceptive statements concerning the use of opioids to treat chronic non-cancer
pain and breakthrough chronic non-cancer pain;
d. Developing and disseminating scientific studies that deceptively concluded
opioids are safe and effective for the long-term treatment of chronic non-cancer
pain in conjunction with Cephalon’s potent rapid-onset opioids;
e. Providing needed financial support to pro-opioid pain organizations that made
deceptive statements, including in patient education materials, concerning the use
of opioids to treat chronic non-cancer pain;
f. Endorsing and assisting in the distribution of CMEs containing deceptive
statements concerning the use of opioids to treat chronic non-cancer pain;
g. Endorsing and assisting in the distribution of CMEs containing deceptive
statements concerning the use of Cephalon’s rapid-onset opioids;
h. Directing its marketing of Cephalon’s rapid-onset opioids to a wide range of
doctors, including general practitioners, neurologists, sports medicine specialists,
and workers’ compensation programs, serving chronic pain patients;
i. Making deceptive statements concerning the use of Cephalon’s opioids to treat
chronic non-cancer pain to prescribers through in-person detailing and speakers’
bureau events, when such uses are unapproved and unsafe; and
j. Making deceptive statements concerning the use of opioids to treat chronic noncancer pain to prescribers through in-person detailing and speakers’ bureau
events.
164. Defendant Actavis made and/or disseminated deceptive statements, and concealed
material facts in such a way to make their statements deceptive, including, but not limited to, the
following:

67

 a. Making deceptive statements concerning the use of opioids to treat chronic noncancer pain to prescribers through in-person detailing;
b. Creating and disseminating advertisements that contained deceptive statements
that opioids are safe and effective for the long-term treatment of chronic noncancer pain and that opioids improve quality of life;
c. Creating and disseminating advertisements that concealed the risk of addiction in
the long-term treatment of chronic, non-cancer pain; and
d. Developing and disseminating scientific studies that deceptively concluded
opioids are safe and effective for the long-term treatment of chronic non-cancer
pain and that opioids improve quality of life while concealing contrary data.
5. The Manufacturer Defendants Fraudulently Concealed Their Misconduct.
165. The Manufacturer Defendants, both individually and collectively, made, promoted,
and profited from their misrepresentations about the risks and benefits of opioids for chronic pain
even though they knew that their misrepresentations were false and deceptive. The history of
opioids, as well as research and clinical experience establish that opioids are highly addictive and
are responsible for a long list of very serious adverse outcomes. The FDA warned Defendants of
this, and Defendants had access to scientific studies, detailed prescription data, and reports of
adverse events, including reports of addiction, hospitalization, and death – all of which clearly
described the harm from long-term opioid use and that patients were suffering from addiction,
overdose, and death in alarming numbers. More recently, the FDA and CDC have issued
pronouncements, based on medical evidence, that conclusively expose the falsity of Defendants’
misrepresentations, and Endo and Purdue have recently entered into agreements in New York
prohibiting them from making some of the same misrepresentations described in this Complaint.
166. At all times relevant to this Complaint, the Manufacturer Defendants took steps to
avoid detection of and to fraudulently conceal their deceptive marketing and unlawful, unfair,
and fraudulent conduct. For example, the Manufacturer Defendants disguised their role in the
deceptive marketing of chronic opioid therapy by funding and working through third parties like

68

 Front Groups and KOLs. The Manufacturer Defendants purposefully hid behind the assumed
credibility of these individuals and organizations and relied on them to vouch for the accuracy
and integrity of the Manufacturer Defendants’ false and deceptive statements about the risks and
benefits of long-term opioid use for chronic pain. Defendants also never disclosed their role in
shaping, editing, and approving the content of information and materials disseminated by these
third parties. The Manufacturer Defendants exerted considerable influence on these promotional
and “educational” materials in emails, correspondence, and meetings with KOLs, Front Groups,
and public relations companies that were not, and have not yet become, public. For example,
PainKnowledge.org, which is run by the NIPC, did not disclose Endo’s involvement. Other
Manufacturer Defendants, such as Purdue and Janssen, ran similar websites that masked their
own role.
167. Finally, the Manufacturer Defendants manipulated their promotional materials and
the scientific literature to make it appear that these documents were accurate, truthful, and
supported by objective evidence when they were not. The Manufacturer Defendants distorted the
meaning or import of studies they cited and offered them as evidence for propositions the studies
did not support. The Manufacturer Defendants invented “pseudoaddiction” and promoted it to an
unsuspecting medical community. The Manufacturer Defendants provided the medical
community with false and misleading information about ineffectual strategies to avoid or control
opioid addiction. The Manufacturer Defendants recommended to the medical community that
dosages be increased, without disclosing the risks. The Manufacturer Defendants spent millions
of dollars over a period of years on a misinformation campaign aimed at highlighting opioids’
alleged benefits, disguising the risks, and promoting sales. The lack of support for the
Manufacturer Defendants’ deceptive messages was not apparent to medical professionals who

69

 relied upon them in making treatment decisions, nor could it have been detected by the Plaintiff
or Plaintiff’s Community. Thus, the Manufacturer Defendants successfully concealed from the
medical community, patients, and health care payors facts sufficient to arouse suspicion of the
claims that the Plaintiff now asserts. Plaintiff did not know of the existence or scope of the
Manufacturer Defendants’ industry-wide fraud and could not have acquired such knowledge
earlier through the exercise of reasonable diligence.
C. THE DISTRIBUTOR
OPIOIDS.

DEFENDANTS’

UNLAWFUL

DISTRIBUTION

OF

168. The Distributor Defendants owe a duty under both federal law (21 U.S.C. § 823, 21
CFR 1301.74) and Wisconsin law (see, e.g., Wis. Admin. Code § Phar 8.10) to monitor, detect,
investigate, refuse to fill, and report suspicious orders of prescription opioids originating from
Plaintiff’s Community as well as those orders which the Distributor Defendants knew or should
have known were likely to be diverted into Plaintiff’s Community.
169. The foreseeable harm from a breach of these duties is the diversion of prescription
opioids for nonmedical purposes.
170. Each Distributor Defendant repeatedly and purposefully breached its duties under
state and federal law. Such breaches are a direct and proximate causes of the widespread
diversion of prescription opioids for nonmedical purposes into Plaintiff’s Community.
171. The unlawful diversion of prescription opioids is a direct and proximate cause
and/or substantial contributing factor to the opioid epidemic, prescription opioid abuse,
addiction, morbidity and mortality in the State and in Plaintiff’s Community. This diversion and
the epidemic are direct causes of harms for which Plaintiff seeks to recover here.
172. The opioid epidemic in the State, including inter alia in Plaintiff’s Community,
remains an immediate hazard to public health and safety.

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 173. The opioid epidemic in Plaintiff’s Community is a temporary and continuous
public nuisance and remains unabated.
174. The Distributor Defendants intentionally continued their conduct, as alleged herein,
with knowledge that such conduct was creating the opioid nuisance and causing the harms and
damages alleged herein.
1. Wholesale Drug Distributors Have a Duty under State and Federal Law to
Guard Against, and Report, Unlawful Diversion and to Report and Prevent
Suspicious Orders.
175. As under federal law, opioids are a Schedule II controlled substance under
Wisconsin law. See Wis. Stat. Ann. § 961.16. Opioids are categorized as “Schedule II” drugs
because they have a “high potential for abuse” and the potential to cause “severe psychic or
physical dependence” and/or “severe psychological . . . dependence.” 21 U.S.C. § 812(b)(2)(A)(C).
176. Wisconsin law required Defendants to be licensed by the Wisconsin Pharmacy
Examining Board. Wis. Stat. Ann. § 450.071(1). See also Wis. Stat. Ann. § 961.31 (Wisconsin
Controlled Substances Act) (“The pharmacy examining board may promulgate rules relating to
the manufacture, distribution and dispensing of controlled substances within this state.”); Wis.
Admin. Code §§ Phar 13.01 et seq. (listing requirements for distributors to receive license).
177. The Wisconsin Pharmacy Examining Board has the authority to “deny, revoke,
suspend or limit the license” issued to Wholesale Distributors who “[e]ngage[] in unprofessional
conduct.” Wis. Stat. Ann. § 450.10(1)(b)(1). “Unprofessional conduct” includes, inter alia,
making material false statements or giving materially false information in connection with an
application; “[e]ngaging in false, misleading or deceptive advertising”; or making “a substantial
misrepresentation in the course of practice which is relied upon by another person.” Wis. Stat.
Ann. § 450.10(1)(a)(1), (4) and (5). “Unprofessional conduct” also includes violating any
71

 Wisconsin or federal statute or rule “which substantially relates to the practice of the licensee.”
Wis. Stat. Ann. § 450.10(1)(a)(2). See also Wis. Admin. Code § Phar 13.17(2) (“Failure to
comply with applicable federal, state, and local laws and regulations constitutes unprofessional
conduct.”).
178. Except as authorized, it is unlawful to “manufacture, distribute, or deliver a
controlled substance[.]” Wis. Stat. Ann. § 961.41(1). See also Wis. Stat. Ann. § 961.42 (“It is
unlawful for any person knowingly to keep or maintain any . . . warehouse, . . . building, . . . or
other structure or place, . . . which is used for manufacturing, keeping or delivering [controlled
substances] in violation of [the Wisconsin Controlled Substances Act]”).
179. Wisconsin Pharmacy Examining Board Regulations require manufacturers and
distributors of controlled substances to “maintain complete and accurate records of each
controlled substance received, manufactured, distributed, dispensed or disposed of in any other
manner.” Wis. Admin. Code § Phar 8.02(1). See also Wis. Admin. Code § Phar 8.02(3)(f)
(requiring DEA registrants authorized to possess controlled substances to send a copy to the
Pharmacy Examining Board of any required report to the DEA of theft or loss of controlled
substances); Wis. Admin. Code § Phar 13.14(1) (“distributor shall establish and maintain
inventories and records of all transactions regarding . . . prescription drugs.”).
180. Furthermore, Wisconsin law incorporates federal requirements set out under the
Controlled Substance Act and related controlled substance laws and regulations. To receive and
maintain a Wisconsin license, each of the Defendants who registered as Wholesale Distributors
assumed a duty to comply with “applicable federal, state, and local laws and regulations.” Wis.
Admin. Code § Phar 13.17(1). See also Wis. Stat. Ann. § 450.10(1)(a)(2); Wis. Admin. Code §

72

 Phar 13.17(2); Wis. Admin. Code § Phar 8.02(2) (records required by federal controlled
substances act shall be maintained); Wis. Admin. Code § Phar 12.05.
181. Each Distributor Defendant was further required to register with the DEA, pursuant
to the federal Controlled Substance Act. See 21 U.S.C. § 823(b), (e); 28 C.F.R. § 0.100. Each
Distributor Defendant is a “registrant” as a wholesale distributor in the chain of distribution of
Schedule II controlled substances with a duty to comply with all security requirements imposed
under that statutory scheme. Wisconsin law adopts and incorporates those requirements, as set
out above. See, e.g., Wis. Admin. Code § Phar 13.17.
182. Each Distributor Defendant has an affirmative duty under federal and Wisconsin to
act as a gatekeeper guarding against the diversion of the highly addictive, dangerous opioid
drugs. Federal law requires that Distributors of Schedule II drugs, including opioids, must
maintain “effective control against diversion of particular controlled substances into other than
legitimate medical, scientific, and industrial channels.” 21 U.S.C. §§ 823(b)(1). Wisconsin law
requires that all locations “where a wholesale distributor stores, handles, repackages, or offers for
sale prescription drugs” shall require that a “security system is maintained that will provide
suitable protection against theft and diversion.” Wis. Admin. Code § Phar 13.10(5); see also
Wis. Admin. Code § Phar 13.02(8). In addition, drug distributors shall “establish, maintain, and
adhere to written policies and procedures, which shall be followed for the receipt, security,
storage, inventory, and distribution of prescription drugs, including policies and procedures for
identifying, recording, and reporting losses or thefts[.]” Wis. Admin. Code § Phar 13.15.
183. The Wisconsin Legislature has found that “the abuse of controlled substances
constitutes a serious problem for society” that the “manufacture, distribution, delivery,
possession and use of controlled substances for other than legitimate purposes have a substantial

73

 and detrimental effect on the health and general welfare of the people of this state.” Wis. Stat. §
961.001 and Wis. Stat. § 961.001(1m). The Wisconsin Pharmacy Examining Board considers
factors “relevant to and consistent with the public health and safety” when determining eligibility
for a distributor’s license. Wis. Admin. Code § Phar 13.06(5).
184. Federal regulations and Wisconsin law impose a non-delegable duty upon
wholesale drug distributors to “design and operate a system to disclose to the registrant
suspicious orders of controlled substances. The registrant [distributor] shall inform the Field
Division Office of the Administration in his area of suspicious orders when discovered by the
registrant. Suspicious orders include orders of unusual size, orders deviating substantially from a
normal pattern, and orders of unusual frequency.” 21 C.F.R. § 1301.74(b). See also Wis. Admin.
Code § Phar 8.10 (“Manufacturers and distributors of controlled substances shall disclose
suspicious orders of controlled substances. . . . The licensee shall notify the regional office of the
DEA and the board of all suspicious orders.”).
185. “Suspicious orders” include orders of an unusual size, orders of unusual frequency
or orders deviating substantially from a normal pattern. See 21 CFR 1301.74(b). These criteria
are disjunctive and are not all inclusive. For example, if an order deviates substantially from a
normal pattern, the size of the order does not matter and the order should be reported as
suspicious. Likewise, a wholesale distributor need not wait for a normal pattern to develop over
time before determining whether a particular order is suspicious. The size of an order alone,
regardless of whether it deviates from a normal pattern, is enough to trigger the wholesale
distributor’s responsibility to report the order as suspicious. The determination of whether an
order is suspicious depends not only on the ordering patterns of the particular customer but also

74

 on the patterns of the entirety of the wholesale distributor’s customer base and the patterns
throughout the relevant segment of the wholesale distributor industry.
186. In addition to reporting all suspicious orders, distributors must also stop shipment
on any order which is flagged as suspicious and only ship orders which were flagged as
potentially suspicious if, after conducting due diligence, the distributor can determine that the
order is not likely to be diverted into illegal channels. See Southwood Pharm., Inc., 72 Fed. Reg.
36,487, 36,501 (Drug Enf’t Admin. July 3, 2007); Masters Pharmaceutical, Inc. v. Drug
Enforcement Administration, No. 15-11355 (D.C. Cir. June 30, 2017). Regardless, all flagged
orders must be reported. Id.
187. These prescription drugs are regulated for the purpose of providing a “closed”
system intended to reduce the widespread diversion of these drugs out of legitimate
channels into the illicit market, while at the same time providing the legitimate drug industry
with a unified approach to narcotic and dangerous drug control. 130
188. Different entities supervise the discrete links in the chain that separate a consumer
from a controlled substance. Statutes and regulations define each participant’s role and
responsibilities. 131

130

See 1970 U.S.C.C.A.N. 4566, 4571-72.

131

Brief for Healthcare Distribution Management Association and National Association of Chain Drug Stores as
Amici Curiae in Support of Neither Party, Masters Pharm., Inc. v. U.S. Drug Enf’t Admin. (No. 15-1335) (D.C. Cir.
Apr. 4, 2016), 2016 WL 1321983, at *22 [hereinafter Brief for HDMA and NACDS]. The Healthcare Distribution
Management Association (HDMA or HMA)—now known as the Healthcare Distribution Alliance (HDA)—is a
national, not-for-profit trade association that represents the nation’s primary, full-service healthcare distributors
whose membership includes, among others: AmerisourceBergen Drug Corporation, Cardinal Health, Inc., and
McKesson Corporation. See generally HDA, About, https://www.healthcaredistribution.org/about (last visited Aug.
21, 2017). The National Association of Chain Drug Stores (NACDS) is a national, not-for-profit trade association
that represents traditional drug stores and supermarkets and mass merchants with pharmacies whose membership
includes, among others: Walgreen Company, CVS Health, Rite Aid Corporation and Walmart. See generally
NACDS, Mission, https://www.nacds.org/ about/mission/ (last visited Aug. 21, 2017).

75

 189. As the DEA advised the Distributor Defendants in a letter to them dated September
27, 2006, wholesale distributors are “one of the key components of the distribution chain. If the
closed system is to function properly … distributors must be vigilant in deciding whether a
prospective customer can be trusted to deliver controlled substances only for lawful purposes.
This responsibility is critical, as … the illegal distribution of controlled substances has a
substantial and detrimental effect on the health and general welfare of the American people.” 132
190. The Distributor Defendants have admitted that they are responsible for reporting
suspicious orders. 133
191. The DEA sent a letter to each of the Distributor Defendants on September 27,
2006, warning that it would use its authority to revoke and suspend registrations when
appropriate. The letter expressly states that a distributor, in addition to reporting suspicious
orders, has a “statutory responsibility to exercise due diligence to avoid filling suspicious orders
that might be diverted into other than legitimate medical, scientific, and industrial channels.”134
The letter also instructs that “distributors must be vigilant in deciding whether a prospective
customer can be trusted to deliver controlled substances only for lawful purposes.” 135 The DEA

132

See Letter from Joseph T. Rannazzisi, Deputy Assistant Adm’r, Office of Diversion Control, Drug. Enf’t
Admin., U.S. Dep’t of Justice, to Cardinal Health (Sept. 27, 2006) [hereinafter Rannazzisi Letter] (“This letter is
being sent to every commercial entity in the United States registered with the Drug Enforcement Agency (DEA) to
distribute controlled substances. The purpose of this letter is to reiterate the responsibilities of controlled substance
distributors in view of the prescription drug abuse problem our nation currently faces.”), filed in Cardinal Health,
Inc. v. Holder, No. 1:12-cv-00185-RBW (D.D.C. Feb. 10, 2012), ECF No. 14-51.
133

See Brief for HDMA and NACDS, 2016 WL 1321983, at *4 (“[R]egulations . . . in place for more than 40 years
require distributors to report suspicious orders of controlled substances to DEA based on information readily
available to them (e.g., a pharmacy’s placement of unusually frequent or large orders).”).

134

Rannazzisi Letter, at 2.

135

Id. at 1.

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 warns that “even just one distributor that uses its DEA registration to facilitate diversion can
cause enormous harm.” 136
192. The DEA sent a second letter to each of the Distributor Defendants on December
27, 2007. 137 This letter reminds the Defendants of their statutory and regulatory duties to
“maintain effective controls against diversion” and “design and operate a system to disclose to
the registrant suspicious orders of controlled substances.” 138 The letter further explains:
The regulation also requires that the registrant inform the local DEA Division
Office of suspicious orders when discovered by the registrant. Filing a monthly
report of completed transactions (e.g., “excessive purchase report” or “high unity
purchases”) does not meet the regulatory requirement to report suspicious orders.
Registrants are reminded that their responsibility does not end merely with the
filing of a suspicious order report. Registrants must conduct an independent
analysis of suspicious orders prior to completing a sale to determine whether the
controlled substances are likely to be diverted from legitimate channels.
Reporting an order as suspicious will not absolve the registrant of responsibility if
the registrant knew, or should have known, that the controlled substances were
being diverted.
The regulation specifically states that suspicious orders include orders of unusual
size, orders deviating substantially from a normal pattern, and orders of an
unusual frequency. These criteria are disjunctive and are not all inclusive. For
example, if an order deviates substantially from a normal pattern, the size of the
order does not matter and the order should be reported as suspicious. Likewise, a
registrant need not wait for a “normal pattern” to develop over time before
determining whether a particular order is suspicious. The size of an order alone,
whether or not it deviates from a normal pattern, is enough to trigger the
registrant’s responsibility to report the order as suspicious. The determination of
whether an order is suspicious depends not only on the ordering patterns of the
particular customer, but also on the patterns of the registrant’s customer base and
the patterns throughout the segment of the regulated industry.
Registrants that rely on rigid formulas to define whether an order is suspicious
may be failing to detect suspicious orders. For example, a system that identifies
136

Id. at 2.

137

See Letter from Joseph T. Rannazzisi, Deputy Assistant Adm’r, Office of Diversion Control, Drug. Enf’t Admin.,
U.S. Dep’t of Justice, to Cardinal Health (Dec. 27, 2007), filed in Cardinal Health, Inc. v. Holder, No. 1:12-cv00185-RBW (D.D.C. Feb. 10, 2012), ECF No. 14-8.

138

Id.

77

 orders as suspicious only if the total amount of a controlled substance ordered
during one month exceeds the amount ordered the previous month by a certain
percentage or more is insufficient. This system fails to identify orders placed by a
pharmacy if the pharmacy placed unusually large orders from the beginning of its
relationship with the distributor. Also, this system would not identify orders as
suspicious if the order were solely for one highly abused controlled substance if
the orders never grew substantially. Nevertheless, ordering one highly abused
controlled substance and little or nothing else deviates from the normal pattern of
what pharmacies generally order.
When reporting an order as suspicious, registrants must be clear in their
communication with DEA that the registrant is actually characterizing an order as
suspicious. Daily, weekly, or monthly reports submitted by registrant indicating
“excessive purchases” do not comply with the requirement to report suspicious
orders, even if the registrant calls such reports “suspicious order reports.”
Lastly, registrants that routinely report suspicious orders, yet fill these orders
without first determining that order is not being diverted into other than legitimate
medical, scientific, and industrial channels, may be failing to maintain effective
controls against diversion. Failure to maintain effective controls against diversion
is inconsistent with the public interest as that term is used in 21 USC 823 and 824,
and may result in the revocation of the registrant’s DEA Certificate of
Registration. 139
Finally, the DEA letter references the Revocation of Registration issued in Southwood
Pharmaceuticals, Inc., 72 Fed. Reg. 36,487-01 (July 3, 2007), which discusses the obligation to
report suspicious orders and “some criteria to use when determining whether an order is
suspicious.” 140
193. The Distributor Defendants admit that they “have not only statutory and regulatory
responsibilities to detect and prevent diversion of controlled prescription drugs, but undertake
such efforts as responsible members of society.” 141
194. The Distributor Defendants knew they were required to monitor, detect, and halt
suspicious orders. Industry compliance guidelines established by the Healthcare Distribution
139

Id.

140

Id.

141

See Brief of HDMA, 2012 WL 1637016, at *2.

78

 Management Association, the trade association of pharmaceutical distributors, explain that
distributors are “[a]t the center of a sophisticated supply chain” and therefore “are uniquely
situated to perform due diligence in order to help support the security of the controlled
substances they deliver to their customers.” The guidelines set forth recommended steps in the
“due diligence” process, and note in particular: If an order meets or exceeds a distributor’s
threshold, as defined in the distributor’s monitoring system, or is otherwise characterized by the
distributor as an order of interest, the distributor should not ship to the customer, in fulfillment of
that order, any units of the specific drug code product as to which the order met or exceeded a
threshold or as to which the order was otherwise characterized as an order of interest. 142
195. Each of the Distributor Defendants sold prescription opioids, including
hydrocodone and/or oxycodone, to retailers in Plaintiff’s Community and/or to retailers from
which Defendants knew prescription opioids were likely to be diverted to Plaintiff’s Community.
196. Each Distributor Defendant owes a duty to monitor and detect suspicious orders of
prescription opioids.
197. Each Distributor Defendant owes a duty under federal and state law to investigate
and refuse suspicious orders of prescription opioids.
198. Each Distributor Defendant owes a duty under federal and state law to report
suspicious orders of prescription opioids.
199. Each Distributor Defendant owes a duty under federal and state law to prevent the
diversion of prescription opioids into illicit markets in the State and Plaintiff’s Community.

142

Healthcare Distribution Management Association (HDMA) Industry Compliance Guidelines: Reporting
Suspicious Orders and Preventing Diversion of Controlled Substances, filed in Cardinal Health, Inc. v. Holder, No.
12-5061 (D.C. Cir. Mar. 7, 2012), Doc. No. 1362415 (App’x B).

79

 200. The foreseeable harm resulting from a breach of these duties is the diversion of
prescription opioids for nonmedical purposes and subsequent plague of opioid addiction.
201. The foreseeable harm resulting from the diversion of prescription opioids for
nonmedical purposes is abuse, addiction, morbidity and mortality in Plaintiff’s Community and
the damages caused thereby.
2. The Distributor Defendants Breached Their Duties.
202. Because distributors handle such large volumes of controlled substances, and are
the first major line of defense in the movement of legal pharmaceutical controlled substances
from legitimate channels into the illicit market, it is incumbent on distributors to maintain
effective controls to prevent diversion of controlled substances. Should a distributor deviate from
these checks and balances, the closed system collapses. 143
203. The sheer volume of prescription opioids distributed to pharmacies in the Plaintiff’s
Community, and/or to pharmacies from which the Distributor Defendants knew the opioids were
likely to be diverted into Plaintiff’s Community, is excessive for the medical need of the
community and facially suspicious. Some red flags are so obvious that no one who engages in
the legitimate distribution of controlled substances can reasonably claim ignorance of them. 144
204. The Distributor Defendants failed to report “suspicious orders” originating from
Plaintiff’s Community, or which the Distributor Defendants knew were likely to be diverted to
Plaintiff’s Community, to the federal and state authorities, including the DEA and/or the state
Board of Pharmacy.

143

See Rannazzisi Decl. ¶ 10, filed in Cardinal Health, Inc. v. Holder, No. 1:12-cv-00185-RBW (D.D.C. Feb. 10,
2012), ECF No. 14-2.
144

Masters Pharmaceuticals, Inc., 80 Fed. Reg. 55,418-01, 55,482 (Sept. 15, 2015) (citing Holiday CVS, L.L.C.,
d/b/a CVS/Pharmacy Nos. 219 and 5195, 77 Fed. Reg. 62,316, 62,322 (2012)).

80

 205. The Distributor Defendants unlawfully filled suspicious orders of unusual size,
orders deviating substantially from a normal pattern and/or orders of unusual frequency in
Plaintiff’s Community, and/or in areas from which the Distributor Defendants knew opioids
were likely to be diverted to Plaintiff’s Community.
206. The Distributor Defendants breached their duty to monitor, detect, investigate,
refuse and report suspicious orders of prescription opiates originating from Plaintiff’s
Community, and/or in areas from which the Distributor Defendants knew opioids were likely to
be diverted to Plaintiff’s Community.
207. The Distributor Defendants breached their duty to maintain effective controls
against diversion of prescription opiates into other than legitimate medical, scientific, and
industrial channels.
208. The Distributor Defendants breached their duty to “design and operate a system to
disclose to the registrant suspicious orders of controlled substances” and failed to inform the
authorities including the DEA of suspicious orders when discovered, in violation of their duties
under federal and state law.
209. The Distributor Defendants breached their duty to exercise due diligence to avoid
filling suspicious orders that might be diverted into channels other than legitimate medical,
scientific and industrial channels. 145
210. The federal and state laws at issue here are public safety laws.
211. The Distributor Defendants’ violations of public safety statutes constitute prima
facie evidence of negligence under State law.

145

See Cardinal Health, Inc. v. Holder, 846 F. Supp. 2d 203, 206 (D.D.C. 2012).

81

 212. The Distributor Defendants supplied prescription opioids to obviously suspicious
physicians and pharmacies, enabled the illegal diversion of opioids, aided criminal activity, and
disseminated massive quantities of prescription opioids into the black market.
213. The unlawful conduct by the Distributor Defendants is purposeful and intentional.
The Distributor Defendants refuse to abide by the duties imposed by federal and state law which
are required to legally acquire and maintain a license to distribute prescription opiates.
214. The Distributor Defendants acted with actual malice in breaching their duties, i.e.,
they have acted with a conscious disregard for the rights and safety of other persons, and said
actions have a great probability of causing substantial harm.
215. The Distributor Defendants’ repeated shipments of suspicious orders, over an
extended period of time, in violation of public safety statutes, and without reporting the
suspicious orders to the relevant authorities demonstrates wanton, willful, or reckless conduct or
criminal indifference to civil obligations affecting the rights of others.
3. The Distributor Defendants Have Sought to Avoid and Have Misrepresented
their Compliance with Their Legal Duties.
216. The Distributor Defendants have repeatedly misrepresented their compliance with
their legal duties under state and federal law and have wrongfully and repeatedly disavowed
those duties in an effort to mislead regulators and the public regarding the Distributor
Defendants’ compliance with their legal duties.
217. Distributor Defendants have refused to recognize any duty beyond reporting
suspicious orders. In Masters Pharmaceuticals, the HDMA, a trade association run by the
Distributor Defendants, and the NACDS submitted amicus briefs regarding the legal duty of
wholesale distributors. Inaccurately denying the legal duties that the wholesale drug industry has
been tragically recalcitrant in performing, they argued as follows:

82

 a. The Associations complained that the “DEA has required distributors not only to
report suspicious orders, but to investigate orders (e.g., by interrogating
pharmacies and physicians) and take action to halt suspicious orders before they
are filled.” 146
b. The Associations argued that, “DEA now appears to have changed its position to
require that distributors not only report suspicious orders, but investigate and halt
suspicious orders. Such a change in agency position must be accompanied by an
acknowledgment of the change and a reasoned explanation for it. In other words,
an agency must display awareness that it is changing position and show that there
are good reasons for the new policy. This is especially important here, because
imposing intrusive obligations on distributors threatens to disrupt patient access to
needed prescription medications.” 147
c. The Associations alleged (inaccurately) that nothing “requires distributors to
investigate the legitimacy of orders, or to halt shipment of any orders deemed to
be suspicious.” 148
d. The Association complained that the purported “practical infeasibility of requiring
distributors to investigate and halt suspicious orders (as well as report them)
underscores the importance of ensuring that DEA has complied with the APA
before attempting to impose such duties.” 149
e. The Associations alleged (inaccurately) that “DEA’s regulations [] sensibly
impose[] a duty on distributors simply to report suspicious orders, but left it to
DEA and its agents to investigate and halt suspicious orders.” 150
f. Also inaccurately, the Associations argued that, “[i]mposing a duty on distributors
– which lack the patient information and the necessary medical expertise – to
investigate and halt orders may force distributors to take a shot-in-the-dark
approach to complying with DEA’s demands.” 151

146

Brief for HDMA and NACDS, 2016 WL 1321983, at *4–5.

147

Id. at *8 (citations and quotation marks omitted).

148

Id. at *14.

149

Id. at *22.

150

Id. at *24–25.

151

Id. at *26.

83

 218. The positions taken by the trade groups is emblematic of the position taken by the
Distributor Defendants in a futile attempt to deny their legal obligations to prevent diversion of
the dangerous drugs. 152
219. The Court of Appeals for the District of Columbia recently issued its opinion
affirming that a wholesale drug distributor does, in fact, have duties beyond reporting. Masters
Pharm., Inc. v. Drug Enf’t Admin., 861 F.3d 206 (D.C. Cir. 2017). The D.C. Circuit Court
upheld the revocation of Master Pharmaceutical’s license and determined that DEA regulations
require that in addition to reporting suspicious orders, distributors must “decline to ship the
order, or conduct some ‘due diligence’ and—if it is able to determine that the order is not likely
to be diverted into illegal channels—ship the order.” Id. at 212. Master Pharmaceutical was in
violation of legal requirements because it failed to conduct necessary investigations and filled
suspicious orders. Id. at 218–19, 226. A distributor’s investigation must dispel all the red flags
giving rise to suspicious circumstances prior to shipping a suspicious order. Id. at 226. The
Circuit Court also rejected the argument made by the HDMA and NACDS (quoted above), that,
allegedly, the DEA had created or imposed new duties. Id. at 220.
220. Wholesale Distributor McKesson has recently been forced to specifically admit to
breach of its duties to monitor, report, and prevent suspicious orders. Pursuant to an
Administrative Memorandum of Agreement (“2017 Agreement”) entered into between
McKesson and the DEA in January 2017, McKesson admitted that, at various times during the
period from January 1, 2009 through the effective date of the Agreement (January 17, 2017) it
“did not identify or report to [the] DEA certain orders placed by certain pharmacies which

152

See Brief of HDMA, 2012 WL 1637016, at *3 (arguing the wholesale distributor industry “does not know the
rules of the road because” they claim (inaccurately) that the “DEA has not adequately explained them”).

84

 should have been detected by McKesson as suspicious based on the guidance contained in the
DEA Letters.” 153 Further, the 2017 Agreement specifically finds that McKesson “distributed
controlled substances to pharmacies even though those McKesson Distribution Centers should
have known that the pharmacists practicing within those pharmacies had failed to fulfill their
corresponding responsibility to ensure that controlled substances were dispensed pursuant to
prescriptions issued for legitimate medical purposes by practitioners acting in the usual course of
their professional practice, as required by 21 C.F.R § 1306.04(a).” 154 McKesson admitted that,
during this time period, it “failed to maintain effective controls against diversion of particular
controlled substances into other than legitimate medical, scientific and industrial channels by
sales to certain of its customers in violation of the CSA and the CSA’s implementing regulations,
21 C.F.R. Part 1300 et seq., at the McKesson Distribution Centers.” 155 Due to these violations,
McKesson agreed that its authority to distribute controlled substances from numerous facilities
would be partially suspended. 156
221. The 2017 Memorandum of Agreement followed a 2008 Settlement Agreement in
which McKesson also admitted failure to report suspicious orders of controlled substances to the
DEA. 157 In the 2008 Settlement Agreement, McKesson “recognized that it had a duty to monitor
its sales of all controlled substances and report suspicious orders to DEA,” but had failed to do
so. 158 The 2017 Memorandum of Agreement documents that McKesson continued to breach its

153

See Administrative Memorandum of Agreement between the U.S. Dep’t of Justice, the Drug Enf’t Admin., and
the McKesson Corp. (Jan. 17, 2017), https://www.justice.gov/opa/press-release/file/928476/download.
154

Id. at 4.

155

Id.

156

Id. at 6.

157

Id. at 4.

158

Id.

85

 admitted duties by “fail[ing] to properly monitor its sales of controlled substances and/or report
suspicious orders to DEA, in accordance with McKesson’s obligations.” 159 As a result of these
violations, McKesson was fined and required to pay to the United States $150,000,000. 160
222. Even though McKesson had been sanctioned in 2008 for failure to comply with its
legal obligations regarding controlling diversion and reporting suspicious orders, and even
though McKesson had specifically agreed in 2008 that it would no longer violate those
obligations, McKesson continued to violate the laws in contrast to its written agreement not to do
so.
223. Because of the Distributor Defendants’ refusal to abide by their legal obligations,
the DEA has repeatedly taken administrative action to attempt to force compliance. For example,
in May 2014, the United States Department of Justice, Office of the Inspector General,
Evaluation and Inspections Divisions, reported that the DEA issued final decisions in 178
registrant actions between 2008 and 2012. 161 The Office of Administrative Law Judges issued a
recommended decision in a total of 117 registrant actions before the DEA issued its final
decision, including 76 actions involving orders to show cause and 41 actions involving
immediate suspension orders. 162 These actions include the following:
a. On April 24, 2007, the DEA issued an Order to Show Cause and Immediate
Suspension Order against the AmerisourceBergen Orlando, Florida distribution
center (“Orlando Facility”) alleging failure to maintain effective controls against
159
Id.; see also Settlement Agreement and Release between the U.S. and McKesson Corp., at 5 (Jan. 17, 2017)
[hereinafter 2017 Settlement Agreement and Release] (“McKesson acknowledges that, at various times during the
Covered Time Period [2009-2017], it did not identify or report to DEA certain orders placed by certain pharmacies,
which should have been detected by McKesson as suspicious, in a manner fully consistent with the requirements set
forth in the 2008 MOA.”), https://www.justice.gov/opa/press-release/file/928471/download.
160

See 2017 Settlement Agreement and Release, at 6.

161

Evaluation and Inspections Div., Office of the Inspector Gen., U.S. Dep’t of Justice, The Drug Enforcement
Administration’s Adjudication of Registrant Actions 6 (2014), https://oig.justice.gov/reports/2014/e1403.pdf.
162

Id.

86

 diversion of controlled substances. On June 22, 2007, AmerisourceBergen entered
into a settlement that resulted in the suspension of its DEA registration;
b. On November 28, 2007, the DEA issued an Order to Show Cause and Immediate
Suspension Order against the Cardinal Health Auburn, Washington Distribution
Center (“Auburn Facility”) for failure to maintain effective controls against
diversion of hydrocodone;
c. On December 5, 2007, the DEA issued an Order to Show Cause and Immediate
Suspension Order against the Cardinal Health Lakeland, Florida Distribution
Center (“Lakeland Facility”) for failure to maintain effective controls against
diversion of hydrocodone;
d. On December 7, 2007, the DEA issued an Order to Show Cause and Immediate
Suspension Order against the Cardinal Health Swedesboro, New Jersey
Distribution Center (“Swedesboro Facility”) for failure to maintain effective
controls against diversion of hydrocodone;
e. On January 30, 2008, the DEA issued an Order to Show Cause and Immediate
Suspension Order against the Cardinal Health Stafford, Texas Distribution Center
(“Stafford Facility”) for failure to maintain effective controls against diversion of
hydrocodone;
f. On May 2, 2008, McKesson Corporation entered into an Administrative
Memorandum of Agreement (“2008 MOA”) with the DEA which provided that
McKesson would “maintain a compliance program designed to detect and prevent
the diversion of controlled substances, inform DEA of suspicious orders required
by 21 C.F.R. § 1301.74(b), and follow the procedures established by its
Controlled Substance Monitoring Program”;
g. On September 30, 2008, Cardinal Health entered into a Settlement and Release
Agreement and Administrative Memorandum of Agreement with the DEA related
to its Auburn Facility, Lakeland Facility, Swedesboro Facility and Stafford
Facility. The document also referenced allegations by the DEA that Cardinal
failed to maintain effective controls against the diversion of controlled substances
at its distribution facilities located in McDonough, Georgia (“McDonough
Facility”), Valencia, California (“Valencia Facility”) and Denver, Colorado
(“Denver Facility”);
h. On February 2, 2012, the DEA issued an Order to Show Cause and Immediate
Suspension Order against the Cardinal Health Lakeland, Florida Distribution
Center (“Lakeland Facility”) for failure to maintain effective controls against
diversion of oxycodone;
i. On December 23, 2016, Cardinal Health agreed to pay a $44 million fine to the
DEA to resolve the civil penalty portion of the administrative action taken against
its Lakeland, Florida Distribution Center; and

87

 j. On January 5, 2017, McKesson Corporation entered into an Administrative
Memorandum Agreement with the DEA wherein it agreed to pay a $150 million
civil penalty for violation of the 2008 MOA as well as failure to identify and
report suspicious orders at its facilities in Aurora CO, Aurora IL, Delran NJ,
LaCrosse WI, Lakeland FL, Landover MD, La Vista NE, Livonia MI, Methuen
MA, Santa Fe Springs CA, Washington Courthouse OH and West Sacramento
CA.
224. Rather than abide by their non-delegable duties under public safety laws, the
Distributor Defendants, individually and collectively through trade groups in the industry,
pressured the U.S. Department of Justice to “halt” prosecutions and lobbied Congress to strip the
DEA of its ability to immediately suspend distributor registrations. The result was a “sharp drop
in enforcement actions” and the passage of the “Ensuring Patient Access and Effective Drug
Enforcement Act” which, ironically, raised the burden for the DEA to revoke a distributor’s
license from “imminent harm” to “immediate harm” and provided the industry the right to “cure”
any violations of law before a suspension order can be issued. 163
225. In addition to taking actions to limit regulatory prosecutions and suspensions, the
Distributor Defendants undertook to fraudulently convince the public that they were complying
with their legal obligations, including those imposed by licensing regulations. Through such
statements, the Distributor Defendants attempted to assure the public they were working to curb
the opioid epidemic.
226. For example, a Cardinal Health executive claimed that it uses “advanced analytics”
to monitor its supply chain, and represented that it was being “as effective and efficient as
163

See Lenny Bernstein & Scott Higham, Investigation: The DEA Slowed Enforcement While the Opioid Epidemic
Grew Out of Control, Wash. Post, Oct. 22, 2016, https://www.washingtonpost.com/investigations/the-dea-slowedenforcement-while-the-opioid-epidemic-grew-out-of-control/2016/10/22/aea2bf8e-7f71-11e6-8d13d7c704ef9fd9_story.html; Lenny Bernstein & Scott Higham, Investigation: U.S. Senator Calls for Investigation of
DEA Enforcement Slowdown Amid Opioid Crisis, Wash. Post, Mar. 6, 2017,
https://www.washingtonpost.com/investigations/us-senator-calls-for-investigation-of-dea-enforcementslowdown/2017/03/06/5846ee60-028b-11e7-b1e9-a05d3c21f7cf_story.html; Eric Eyre, DEA Agent: “We Had No
Leadership” in WV Amid Flood of Pain Pills, Charleston Gazette-Mail, Feb. 18, 2017,
http://www.wvgazettemail.com/news/20170218/dea-agent-we-had-no-leadership-in-wv-amid-flood-of-pain-pills-.

88

 possible in constantly monitoring, identifying, and eliminating any outside criminal activity.”164
Given the sales volumes and the company’s history of violations, this executive was either not
telling the truth, or, if Cardinal Health had such a system, it ignored the results.
227. Similarly, Defendant McKesson publicly stated that it has a “best-in-class
controlled substance monitoring program to help identify suspicious orders,” and claimed it is
“deeply passionate about curbing the opioid epidemic in our country.” 165 Again, given
McKesson’s historical conduct, this statement is either false, or the company ignored outputs of
the monitoring program.
228. By misleading the public about the effectiveness of their controlled substance
monitoring programs, the Distributor Defendants successfully concealed the facts sufficient to
arouse suspicion of the claims that the Plaintiff now asserts. The Plaintiff did not know of the
existence or scope of Defendants’ industry-wide fraud and could not have acquired such
knowledge earlier through the exercise of reasonable diligence.
229. Meanwhile, the opioid epidemic rages unabated in the Nation, the State, and in
Plaintiff’s Community.
230. The epidemic still rages because the fines and suspensions imposed by the DEA do
not change the conduct of the industry. The distributors, including the Distributor Defendants,
pay fines as a cost of doing business in an industry that generates billions of dollars in annual

164

Lenny Bernstein et al., How Drugs Intended for Patients Ended Up in the Hands of Illegal Users: “No One Was
Doing Their Job,” Wash. Post, Oct. 22, 2016, https://www.washingtonpost.com/investigations/how-drugs-intendedfor-patients-ended-up-in-the-hands-of-illegal-users-no-one-was-doing-their-job/2016/10/22/10e79396-30a7-11e68ff7-7b6c1998b7a0_story.html.
165

Scott Higham et al., Drug Industry Hired Dozens of Officials from the DEA as the Agency Tried to Curb Opioid
Abuse, Wash. Post, Dec. 22, 2016, https://www.washingtonpost.com/investigations/key-officials-switch-sides-fromdea-to-pharmaceutical-industry/2016/12/22/55d2e938-c07b-11e6-b527-949c5893595e_story.html.

89

 revenue. They hold multiple DEA registration numbers and when one facility is suspended, they
simply ship from another facility.
231. The wrongful actions and omissions of the Distributor Defendants which have
caused the diversion of opioids and which have been a substantial contributing factor to and/or
proximate cause of the opioid crisis are alleged in greater detail in Plaintiff’s racketeering
allegations below.
232. The Distributor Defendants have abandoned their duties imposed under federal and
state law, taken advantage of a lack of DEA law enforcement, and abused the privilege of
distributing controlled substances in the State and Plaintiff’s Community.
D. THE MANUFACTURER DEFENDANTS’ UNLAWFUL FAILURE TO PREVENT
DIVERSION AND MONITOR, REPORT, AND PREVENT SUSPICIOUS
ORDERS.
233. The same legal duties to prevent diversion, and to monitor, report, and prevent
suspicious orders of prescription opioids that were incumbent upon the Distributor Defendants
were also legally required of the Manufacturer Defendants under federal and Wisconsin law.
234. Under Wisconsin and federal law, the Manufacturing Defendants were required to
comply with the same licensing requirements as the Distributor Defendants and the same rules
regarding prevention of diversion and reporting suspicious orders, as set out above. See Wis.
Stat. Ann. § 450.01(24) (“‘Wholesale distributor’ means a person engaged in the wholesale
distribution of prescription drugs, including manufacturers”); Wis. Admin. Code §§ Phar
13.02(12); Phar 13.17; Phar 12.05.
235. Like the Distributor Defendants, the Manufacturer Defendants were required to
register with the DEA to manufacture schedule II controlled substances, like prescription
opioids. See 21 U.S.C. § 823(a). A requirement of such registration is the:

90

 maintenance of effective controls against diversion of particular controlled
substances and any controlled substance in schedule I or II compounded
therefrom into other than legitimate medical, scientific, research, or industrial
channels, by limiting the importation and bulk manufacture of such controlled
substances to a number of establishments which can produce an adequate and
uninterrupted supply of these substances under adequately competitive conditions
for legitimate medical, scientific, research, and industrial purposes . . . .
21 U.S.C. § 823(a)(1) (emphasis added).
236. Additionally, as “registrants” under Section 823, the Manufacturer Defendants
were also required to monitor, report, and prevent suspicious orders of controlled substances:
The registrant shall design and operate a system to disclose to the registrant
suspicious orders of controlled substances. The registrant shall inform the Field
Division Office of the Administration in his area of suspicious orders when
discovered by the registrant. Suspicious orders include orders of unusual size,
orders deviating substantially from a normal pattern, and orders of unusual
frequency.
21 C.F.R. § 1301.74. See also 21 C.F.R. § 1301.02 (“Any term used in this part shall have the
definition set forth in section 102 of the Act (21 U.S.C. 802) or part 1300 of this chapter.”); 21
C.F.R. § 1300.01 (“Registrant means any person who is registered pursuant to either section 303
or section 1008 of the Act (21 U.S.C. 823 or 958).” Like the Distributor Defendants, the
Manufacture Defendants breached these duties.
237. The Manufacturer Defendants had access to and possession of the information
necessary to monitor, report, and prevent suspicious orders and to prevent diversion. The
Manufacturer Defendants engaged in the practice of paying “chargebacks” to opioid distributors.
A chargeback is a payment made by a manufacturer to a distributor after the distributor sells the
manufacturer’s product at a price below a specified rate. After a distributor sells a
manufacturer’s product to a pharmacy, for example, the distributor requests a chargeback from
the manufacturer and, in exchange for the payment, the distributor identifies to the manufacturer
the product, volume and the pharmacy to which it sold the product. Thus, the Manufacturer

91

 Defendants knew – just as the Distributor Defendants knew – the volume, frequency, and pattern
of opioid orders being placed and filled. The Manufacturer Defendants built receipt of this
information into the payment structure for the opioids provided to the opioid distributors.
238. Federal statutes and regulations – and Wisconsin law incorporating those
requirements – are clear: just like opioid distributors, opioid manufacturers are required to
“design and operate a system to disclose . . . suspicious orders of controlled substances” and to
maintain “effective controls against diversion.” 21 C.F.R. § 1301.74; 21 U.S.C. § 823(a)(1).
239. The Department of Justice has recently confirmed the suspicious order obligations
clearly imposed by federal law upon opioid manufacturers, fining Mallinckrodt $35 million for
failure to report suspicious orders of controlled substances, including opioids, and for violating
recordkeeping requirements. 166
240. In the press release accompanying the settlement, the Department of Justice stated:
Mallinckrodt “did not meet its obligations to detect and notify DEA of suspicious orders of
controlled substances such as oxycodone, the abuse of which is part of the current opioid
epidemic. These suspicious order monitoring requirements exist to prevent excessive sales of
controlled substances, like oxycodone . . . . Mallinckrodt’s actions and omissions formed a link
in the chain of supply that resulted in millions of oxycodone pills being sold on the street. . . .
‘Manufacturers and distributors have a crucial responsibility to ensure that controlled substances
do not get into the wrong hands. . . .’” 167

166

See Press Release, U.S. Dep’t of Justice, Mallinckrodt Agrees to Pay Record $35 Million Settlement for Failure
to Report Suspicious Orders of Pharmaceutical Drugs and for Recordkeeping Violations (July 11, 2017),
https://www.justice.gov/opa/pr/mallinckrodt-agrees-pay-record-35-million-settlement-failure-report-suspiciousorders.
167

Id. (quoting DEA Acting Administrator Chuck Rosenberg).

92

 241. Among the allegations resolved by the settlement, the government alleged
“Mallinckrodt failed to design and implement an effective system to detect and report
‘suspicious orders’ for controlled substances – orders that are unusual in their frequency, size, or
other patterns . . . [and] Mallinckrodt supplied distributors, and the distributors then supplied
various U.S. pharmacies and pain clinics, an increasingly excessive quantity of oxycodone pills
without notifying DEA of these suspicious orders.” 168
242. The Memorandum of Agreement entered into by Mallinckrodt (“2017 Mallinckrodt
MOA”) avers “[a]s a registrant under the CSA, Mallinckrodt had a responsibility to maintain
effective controls against diversion, including a requirement that it review and monitor these
sales and report suspicious orders to DEA.” 169
243. The 2017 Mallinckrodt MOA further details the DEA’s allegations regarding
Mallinckrodt’s failures to fulfill its legal duties as an opioid manufacturer:
With respect to its distribution of oxycodone and hydrocodone products,
Mallinckrodt's alleged failure to distribute these controlled substances in a
manner authorized by its registration and Mallinckrodt's alleged failure to
operate an effective suspicious order monitoring system and to report suspicious
orders to the DEA when discovered as required by and in violation of 21 C.F.R.
§ 1301.74(b). The above includes, but is not limited to Mallinckrodt's alleged
failure to:
i. conduct adequate due diligence of its customers;
ii. detect and report to the DEA orders of unusual size and
frequency;
iii. detect and report to the DEA orders deviating substantially from
normal patterns including, but not limited to, those identified in
letters from the DEA Deputy Assistant Administrator, Office of
Diversion Control, to registrants dated September 27, 2006 and
December 27, 2007:

168

Id.

169

Administrative Memorandum of Agreement between the United States Department of Justice, the Drug
Enforcement Agency, and Mallinckrodt, plc. and its subsidiary Mallinckrodt, LLC (July 10, 2017),
https://www.justice.gov/usao-edmi/press-release/file/986026/download (“2017 Mallinckrodt MOA”).

93

 1. orders that resulted in a disproportionate amount of a
substance which is most often abused going to a
particular geographic region where there was known
diversion,
2. orders that purchased a disproportionate amount of a
substance which is most often abused compared to other
products, and
3. orders from downstream customers to distributors who
were purchasing from multiple different distributors, of
which Mallinckrodt was aware;
iv. use "chargeback" information from its distributors to evaluate
suspicious orders. Chargebacks include downstream purchasing
information tied to certain discounts, providing Mallinckrodt
with data on buying patterns for Mallinckrodt products; and
v. take sufficient action to prevent recurrence of diversion by
downstream customers after receiving concrete information of
diversion of Mallinckrodt product by those downstream
customers. 170
244. Mallinckrodt agreed that its “system to monitor and detect suspicious orders did not
meet the standards outlined in letters from the DEA Deputy Administrator, Office of Diversion
Control, to registrants dated September 27, 2006 and December 27, 2007.” Mallinckrodt further
agreed that it “recognizes the importance of the prevention of diversion of the controlled
substances they manufacture” and would “design and operate a system that meets the
requirements of 21 CFR 1301.74(b) . . . [such that it would] utilize all available transaction
information to identify suspicious orders of any Mallinckrodt product. Further, Mallinckrodt
agrees to notify DEA of any diversion and/or suspicious circumstances involving any
Mallinckrodt controlled substances that Mallinckrodt discovers.” 171
245. Mallinckrodt acknowledged that “[a]s part of their business model Mallinckrodt
collects transaction information, referred to as chargeback data, from their direct customers
(distributors). The transaction information contains data relating to the direct customer sales of
170

2017 Mallinckrodt MOA at 2-3.

171

Id. at 3-4.

94

 controlled substances to ‘downstream’ registrants.” Mallinckrodt agreed that, from this data, it
would “report to the DEA when Mallinckrodt concludes that the chargeback data or other
information indicates that a downstream registrant poses a risk of diversion.” 172
246. The same duties imposed by federal law on Mallinckrodt were imposed upon all
Manufacturer Defendants.
247. The same business practices utilized by Mallinckrodt regarding “charge backs” and
receipt and review of data from opioid distributors regarding orders of opioids were utilized
industry-wide among opioid manufacturers and distributors, including, upon information and
belief, the other Manufacturer Defendants.
248. Through, inter alia, the charge back data, the Manufacturer Defendants could
monitor suspicious orders of opioids.
249. The Manufacturer Defendants failed to monitor, report, and halt suspicious orders
of opioids as required by federal and state law.
250. The Manufacturer Defendants’ failures to monitor, report, and halt suspicious
orders of opioids were intentional and unlawful.
251. The Manufacturer Defendants have misrepresented their compliance with federal
and state law.
252. The Manufacturer Defendants enabled the supply of prescription opioids to
obviously suspicious physicians and pharmacies, enabled the illegal diversion of opioids, aided
criminal activity, and disseminated massive quantities of prescription opioids into the black
market.

172

Id. at 5.

95

 253. The wrongful actions and omissions of the Manufacturer Defendants which have
caused the diversion of opioids and which have been a substantial contributing factor to and/or
proximate cause of the opioid crisis are alleged in greater detail in Plaintiff’s racketeering
allegations below.
254. The Manufacturer Defendants’ actions and omissions in failing to effectively
prevent diversion and failing to monitor, report, and prevent suspicious orders have enabled the
unlawful diversion of opioids into Plaintiff’s Community.
E. DEFENDANTS’ UNLAWFUL CONDUCT AND BREACHES OF LEGAL
DUTIES CAUSED THE HARM ALLEGED HEREIN AND SUBSTANTIAL
DAMAGES.
255. As the Manufacturer Defendants’ efforts to expand the market for opioids increased
so have the rates of prescription and sale of their products — and the rates of opioid-related
substance abuse, hospitalization, and death among the people of the State and the Plaintiff’s
Community. The Distributor Defendants have continued to unlawfully ship these massive
quantities of opioids into communities like the Plaintiff’s Community, fueling the epidemic.
256. There is a “parallel relationship between the availability of prescription opioid
analgesics through legitimate pharmacy channels and the diversion and abuse of these drugs and
associated adverse outcomes.” 173
257. Opioid analgesics are widely diverted and improperly used, and the widespread use
of the drugs has resulted in a national epidemic of opioid overdose deaths and addictions. 174

173

See Richard C. Dart et al., Trends in Opioid Analgesic Abuse and Mortality in the United States, 372 N. Eng. J.
Med. 241 (2015).

174

See Nora D. Volkow & A. Thomas McLellan, Opioid Abuse in Chronic Pain—Misconceptions and Mitigation
Strategies, 374 N. Eng. J. Med. 1253 (2016).

96

 258. The epidemic is “directly related to the increasingly widespread misuse of powerful
opioid pain medications.” 175
259. The increased abuse of prescription painkillers along with growing sales has
contributed to a large number of overdoses and deaths. 176
260. As shown above, the opioid epidemic has escalated in Plaintiff’s Community with
devastating effects. Substantial opiate-related substance abuse, hospitalization and death mirrors
Defendants’ increased distribution of opiates.
261. Because of the well-established relationship between the use of prescription opiates
and the use of non-prescription opioids, like heroin, the massive distribution of opioids to
Plaintiffs’ Community and areas from which such opioids are being diverted into Plaintiff’s
Community, has caused the Defendant-caused opioid epidemic to include heroin addiction,
abuse, and death.
262. Prescription opioid abuse, addiction, morbidity, and mortality are hazards to public
health and safety in the State and in Plaintiff’s Community.
263. Heroin abuse, addiction, morbidity, and mortality are hazards to public health and
safety in the State and in Plaintiff’s Community.
264. Defendants repeatedly and purposefully breached their duties under state and
federal law, and such breaches are direct and proximate causes of, and/or substantial factors
leading to, the widespread diversion of prescription opioids for nonmedical purposes into the
Plaintiff’s Community.
175

See Robert M. Califf et al., A Proactive Response to Prescription Opioid Abuse, 374 N. Eng. J. Med. 1480
(2016).
176

See Press Release, Ctrs. for Disease Control and Prevention, U.S. Dep’t of Health and Human Servs.,
Prescription Painkiller Overdoses at Epidemic Levels (Nov. 1, 2011),
https://www.cdc.gov/media/releases/2011/p1101_flu_pain_killer_overdose.html.

97

 265. The unlawful diversion of prescription opioids is a direct and proximate cause of,
and/or substantial factor leading to, the opioid epidemic, prescription opioid abuse, addiction,
morbidity and mortality in the State and Plaintiff’s Community. This diversion and the epidemic
are direct causes of foreseeable harms incurred by the Plaintiff and Plaintiff’s Community.
266. Defendants’ intentional and/or unlawful conduct resulted in direct and foreseeable,
past and continuing, economic damages for which Plaintiff seeks relief, as alleged herein.
Plaintiff also seeks the means to abate the epidemic created by Defendants’ wrongful and/or
unlawful conduct.
267. Plaintiff seeks economic damages from the Defendants as reimbursement for the
costs associated with past efforts to eliminate the hazards to public health and safety.
268. Plaintiff seeks economic damages from the Defendants to pay for the cost to
permanently eliminate the hazards to public health and safety and abate the temporary public
nuisance.
269. To eliminate the hazard to public health and safety, and abate the public nuisance, a
“multifaceted, collaborative public health and law enforcement approach is urgently needed.” 177
270. A comprehensive response to this crisis must focus on preventing new cases of
opioid addiction, identifying early opioid-addicted individuals, and ensuring access to effective
opioid addiction treatment while safely meeting the needs of patients experiencing pain. 178
271. These community-based problems require community-based solutions that have
been limited by “budgetary constraints at the state and Federal levels.” 179
177

See Rose A. Rudd et al., Increases in Drug and Opioid Overdose Deaths—United States, 2000–2014, 64
Morbidity & Mortality Wkly. Rep. 1378 (2016), at 1145.

178

See Johns Hopkins Bloomberg School of Public Health, The Prescription Opioid Epidemic: An Evidence-Based
Approach (G. Caleb Alexander et al. eds., 2015), http://www.jhsph.edu/research/centers-and-institutes/center-fordrug-safety-and-effectiveness/research/prescription-opioids/JHSPH_OPIOID_EPIDEMIC_REPORT.pdf.

98

 272. Having profited enormously through the aggressive sale, misleading promotion,
and irresponsible distribution of opiates, Defendants should be required to take responsibility for
the financial burdens their conduct has inflicted upon the Plaintiff and Plaintiff’s Community.
F. DEFENDANTS’ FRAUDULENT AND DECEPTIVE MARKETING OF OPIOIDS
DIRECTLY CAUSED HARM TO THE PLAINTIFF.
273. In the first instance, Plaintiff was damaged directly, through its payments of false
claims for chronic opioid therapy by (a) its self-insured health care plans and (b) its workers’
compensation program. For example, on information and belief, The County’s self-insured
health plan made payments for opioids totaling $364,028.52 in 2015, $313,404.17 in 2016, and
$266,596.90 in 2017. This represents only direct payments by the plan for opioids, not any of the
payments for opioid-related injury, treatment or death.
274. The Defendants’ marketing of opioids caused health care providers to prescribe and
Plaintiff, through its health plans and workers’ compensation program, to pay for prescriptions of
opioids to treat chronic pain. Because of the Defendants’ unbranded marketing, health care
providers wrote and Plaintiff paid for prescription opioids for chronic pain that were filled not
only with their drugs, but with opioids sold by other manufacturers. All of these prescriptions
were caused by Defendants’ fraudulent marketing and therefore all of them constitute false
claims. Because, as laid out below, Plaintiff is obligated to cover medically necessary and
reasonably required care, it had no choice but to pay these false and fraudulent claims.
275. The fact that Plaintiff would pay for these ineligible prescriptions is both the
foreseeable and intended consequence of the Defendants’ fraudulent marketing scheme. The
Defendants set out to change the medical and general consensus supporting chronic opioid
179

See Office of Nat’l Drug Control Policy, Exec. Office of the President, Epidemic: Responding to America’s
Prescription Drug Abuse Crisis (2011), https://www.ncjrs.gov/pdffiles1/ondcp/rx_abuse_plan.pdf.

99

 therapy so that doctors would prescribe and government payors, such as Plaintiff, would pay for
long-term prescriptions of opioids to treat chronic pain despite the absence of genuine evidence
supporting chronic opioid therapy and the contrary evidence regarding the significant risks and
limited benefits from long-term use of opioids.
1. Increase in Opioid Prescribing Nationally
276. Defendants’ scheme to change the medical consensus regarding opioid therapy for
chronic pain worked. During the year 2000, outpatient retail pharmacies filled 174 million
prescriptions for opioids nationwide. During 2009, they provided 83 million more.
277. Opioid prescriptions increased even as the percentage of patients visiting the doctor
for pain remained constant.
278. A study of 7.8 million doctor visits between 2000 and 2010 found that opioid
prescriptions increased from 11.3% to 19.6% of visits, as NSAID and acetaminophen
prescriptions fell from 38% to 29%, driven primarily by the decline in NSAID prescribing. 180
279. Approximately 20% of the population between the ages of 30 and 44 and nearly
30% of the population over 45 have used opioids. Indeed, “[o]pioids are the most common
means of treatment for chronic pain.” 181 From 1980 to 2000, opioid prescriptions for chronic
pain visits doubled. This is the result not of an epidemic of pain, but an epidemic of prescribing.
A study of 7.8 million doctor visits found that prescribing for pain increased by 73% between
2000 and 2010 – even though the number of office visits in which patients complained of pain
did not change and prescribing of non-opioid pain medications decreased. For back pain alone –
one of the most common chronic pain conditions – the percentage of patients prescribed opioids
180

Matthew Daubress et al., Ambulatory Diagnosis and Treatment of Nonmalignant Pain in the United States, 20002010, 51 (10) Med. Care 870 (2013).
181

Deborah Grady et al., Opioids for Chronic Pain, 171 (16) Arch. Intern. Med. 1426 (2011).

100

 increased from 19% to 29% between 1999 and 2010, even as the use of NSAIDs or
acetaminophen declined and referrals to physical therapy remained steady.
280. This increase corresponds with, and was caused by, the Defendants’ massive
marketing push. The industry’s spending nationwide on marketing of opioids stood at more than
$20 million per quarter and $91 million annually in 2000. By 2011, that figure hit its peak of
more than $70 million per quarter and $288 million annually, a more than three-fold increase. By
2014, the figures dropped to roughly $45 million per quarter and $182 million annually, as the
Defendants confronted increased concern regarding opioid addiction, abuse, and diversion. Even
so, the Defendants still spend double what they spent in 2000 on opioid marketing.
281. By far the largest component of this spending was opioid drug makers’ detailing
visits to individual doctors, with total detailing expenditures more than doubling between 2000
and 2014 and now standing at $168 million annually.
2. Plaintiff’s Increased Spending on Opioids through Self-Insured Health Care Plan
and Worker’s Compensation Program
282. Commensurate with the Defendants’ heavy promotion of opioids and the resultant
massive upswing in prescribing of opioids nationally, Plaintiff has seen its own spending on
opioids – through claims paid by its health care plan and worker’s compensation program –
increase dramatically.
i.

Health Care Plans

283. Plaintiff, through a self-insured program under Wis. Stat. § 59.52(11)(c), provides
comprehensive health care benefits, including prescription drugs coverage, to its employees and
retirees. These benefits are provided under a health plan that Plaintiff self-insures, including a
preferred provider organization (“PPO”) for employees, among other benefits for retirees.

101

 284. The prescription drug plan under the PPO is self-insured: the costs of prescription
drugs are paid directly by Plaintiff.
285. Throughout the relevant time period for this action, the PPO’s prescription drug
costs have been paid by Plaintiff.
286. Doctors submit claims directly to Plaintiff’s applicable health plan for their costs
associated with prescribing opioids, including office visits and toxicology screens for patients
prescribed opioids. In addition, prescriptions for opioids written by these doctors for patients
covered by Plaintiff’s self-insured health plan are filled by pharmacies, which submit claims for
reimbursement to Plaintiff’s pharmacy benefit manager.
287. Plaintiff’s applicable health plan provides benefits for all “medically necessary”
services associated with opioids, including treatment related to any adverse outcomes from
chronic opioid therapy, such as overdose or addiction treatment.
288. The Defendants caused doctors and pharmacies to submit, and Plaintiff to pay,
claims to its health plan that were false by: (a) causing doctors to write prescriptions for chronic
opioid therapy based on deceptive representations regarding the risks, benefits, and superiority of
those drugs; (b) causing doctors to certify that these prescriptions and associated services were
medically necessary; (c) causing claims to be submitted for drugs that were promoted for offlabel uses and misbranded, and therefore not FDA-approved; and (d) distorting the standard of
care for treatment of chronic pain so that doctors would feel not only that it was appropriate, but
required, that they prescribe and continue prescriptions for opioids long-term to treat chronic
pain. Each – or any – of these factors made claims to Plaintiff for chronic opioid therapy false.
289. Plaintiff’s self-insured health plan only covers the cost of prescription drugs that
are medically necessary and dispensed for a FDA-approved purpose. Prescriptions drugs that are

102

 not medically necessary or that are dispensed for a non-FDA approved purpose are expressly
excluded from coverage under Plaintiff’s plan. Generally, under any health insurance plan, a
medically necessary prescription is one which is “customary for the treatment or diagnosis of an
illness or injury, and is consistent with generally accepted medical standards.”
290. Doctors who care for Plaintiff employees and retirees and their dependents are
bound by the provider agreements that entitle them to participate in Plaintiff’s health plan. These
agreements generally permit doctors to charge only for treatments that are medically necessary.
291. Plaintiff is obligated to pay for the medically necessary treatment of covered
employees.
292. In prescribing opioids for chronic pain, doctors certify that the treatment is
medically necessary and the drugs dispensed for an FDA approved purpose, and – at least with
respect to the self-insured plans (the PPO) – the health plans authorize payment from Plaintiff’s
funds.
293. As described above, the use of opioids to treat chronic pain is not “in accordance
with generally accepted standards of medical practice” nor “clinically appropriate . . . and
considered effective for the patient’s illness, injury or disease.”
294. Further, the Defendants’ deceptive marketing rendered opioids misbranded as
prescribed for chronic pain because they were false and misleading and because, by minimizing
the risks associated with the drugs, they did not contain adequate directions for use. The written,
printed, or graphic matter accompanying the Defendants’ drugs did not accurately describe the
risks associated with long-term use of their products, rendering them misbranded. Due to this
misbranding, the Defendants’ opioids were not FDA-approved, within the meaning of Plaintiff’s
health plans, for the long-term treatment of chronic pain.

103

 295. For each and all of the reasons above, chronic opioid therapy and its attendant and
consequential costs are not eligible for reimbursement through Plaintiff’s health plan. Plaintiff
would not have knowingly reimbursed claims for prescription drugs that were not eligible for
coverage.
296. As a result of the Defendants’ deceptive marketing, Plaintiff’s patients who used
opioids long-term to treat chronic pain also incurred additional costs and suffered additional
injuries requiring care, including doctors’ visits, toxicology screens, hospitalization for
overdoses, treatment and other adverse effects of opioids, and long-term disability, among
others, which caused Plaintiff to incur additional costs.
297. Based on preliminary review, Plaintiff approximately spent $364,028.52 in 2015
for prescriptions for opioids, $313,404.17 in 2016, and $266,596.90 in 2017. This does not
include any other costs, such as doctor visits, which would also be included with these
prescriptions. This includes prescriptions that also were caused by Defendants’ deceptive
marketing, including prescriptions for Defendants’ generic opioid products and prescriptions for
opioids from other manufacturers. These figures do not reflect the total cost to Plaintiff of
prescribing opioids, such as doctors’ visits or toxicology screens, or the costs of treating the
adverse effects of prescribing opioids long-term, such as overdose and addiction. They also do
not reflect the total damages for all years to Plaintiff, which will be determined at trial, and
which will include costs to the health plan for the treatment of opioid abuse and dependency.
298. The claims – and the attendant and consequential costs – for opioids prescribed for
chronic pain, as opposed to acute and cancer or end-of-life pain, were ineligible for payment and
the result of the Defendants’ deceptive and unfair conduct.
ii.

Workers’ Compensation Programs

104

 299. Plaintiff, through a self-insured program under Wis. Stat. §§ 102.28(2)(b) and
102.28(2)(bm), provides workers’ compensation, including prescription drug benefits, to eligible
employees injured in the course of their employment. When an employee is injured on the job,
he or she may file a claim for workers’ compensation, if the injury is deemed work-related,
Plaintiff is responsible for paying its share of the employee’s medical costs and lost wages.
300. Plaintiff uses a third party pharmacy benefit manger to help manage medical
benefits under the workers’ compensation program. Doctors submit claims to Plaintiff’s workers’
compensation program for the costs associated with prescribing opioids, including office visits
and toxicology screens for patients prescribed opioids.
301. Upon information and belief, Plaintiff’s third party pharmacy benefit manger uses a
pharmacy and drug utilization management program to manage prescriptions for Plaintiff’s
workers’ compensation program.
302. Plaintiff’s workers’ compensation program covers all costs associated with opioids,
including treatment related to any adverse outcomes from chronic opioid therapy, such as
addiction treatment.
303. The Defendants cause doctors and pharmacies to submit, and Plaintiff to pay claims
to its workers’ compensation program that were false by: (a) causing doctors to write
prescriptions for chronic opioid therapy based on deceptive representations regarding the risks,
benefits, and superiority of those drugs; (b) causing doctors to certify that these prescriptions and
associated services were medically necessary; (c) causing claims to be submitted for drugs that
were promoted for off-label uses and misbranded, and therefore not FDA-approved; and (d)
distorting the standard of care for treatment of chronic pain so that doctors would feel not only
that it was appropriate, but required, that they prescribe and continue prescriptions for opioids

105

 long-term to treat chronic pain. Each – or any – of these factors made claims to Plaintiff for
chronic opioid therapy false.
304. In prescribing opioids for chronic pain, doctors certify that the treatment is
medically necessary and reasonably required, and the workers’ compensation program authorizes
payment from Plaintiff funds.
305. Plaintiff’s workers’ compensation program is obligated to cover all “medically
necessary” and “reasonably required” treatment arising from a compensable work-related injury.
306. As described above, however, the use of opioids to treat chronic pain is not
medically necessary or reasonably required in that their risks do not materially exceed their
benefits; they do not improve physiological function; and their use is not consistent with
guidelines that are scientifically based (as opposed to marketing driven).
307. Nevertheless, the amount of such prescriptions paid by worker’s compensation
programs is monumental. A study of the National Council on Compensation Insurance (“NCCI”)
concluded that, in 2011, approximately 38% of pharmacy costs in workers’ compensation are for
opioids and opioid combinations, amounting to approximately $1.4 billion.
308. Upon information and belief, those trends are reflected in Plaintiff’s experience
with paying for opioids through its worker’s compensation plan.
309. Upon information and belief, data for 2017 shows that The County worker’s
compensation plan spent at least $26,877 on opiates in 2017 alone; in 2016, The County
worker’s compensation plan spent at least $27,467 on opioid prescriptions. These figures do not
reflect the total cost to The County of prescribing opioids, such as doctors’ visits or toxicology
screens, or the costs of treating the adverse effects of prescribing opioids long-term such as
overdose and addiction. Plaintiff also incurred these other costs associated with prescribing

106

 opioids, such as doctors’ visits or toxicology screens, or the costs of treating the adverse effects
of prescribing opioids long-term such as overdose and addiction.
310. However, the costs of long-term opioid use are not limited to costs of opioid
prescriptions. Long-term opioid use is accompanied by a host of consequential costs, including
costs related to abuse, addiction, and death.
311. These claims – and their attendant and consequential costs – for opioids prescribed
for chronic pain, as opposed to acute and cancer or end-of-life pain, were ineligible for payment
and the result of the Defendants’ fraudulent scheme.
iii.

Plaintiff’s Increased Costs Correlate with the Defendants’ Promotion.

312. Upon information and belief, a review of Plaintiff’s costs related to opioid
prescriptions, and the costs associated with those prescriptions, will show that as the Defendants
spent more to promote their drugs, doctors began prescribing them more often and as a result, the
costs to Plaintiff went up.
313. It is also distressing (and a sign of further problems ahead) that the drop in opioid
prescribing beginning in 2014 has been accompanied by a corresponding increase in the
Defendants’ promotional spending, which is headed towards a new high, despite evidence of the
grave toll that opioids are taking on law enforcement, public health, and individual lives.
314. The

Plaintiff

asserts

that

each

Defendant

made

misrepresentations

or

misrepresentation by omission of material facts by their employees, agents, or co-conspirators to
prescribing physicians who then wrote opioid prescriptions for which the Plaintiff paid.
Furthermore, the Plaintiff asserts that specific details about the names of the employees, agents,
or co-conspirators, the substance of the misrepresentations or omissions, the time and date and
location of said misrepresentations or omissions, and the names of the prescribing physicians
who were exposed to each Defendants’ misrepresentations or omissions were closely tracked by
107

 the Defendants, are in the exclusive possession of the Defendants and Plaintiff reasonably
believes that such information will be disclosed in discovery.
G. STATUTES OF LIMITATIONS ARE TOLLED AND DEFENDANTS ARE
ESTOPPED FROM ASSERTED STATUTES OF LIMITATIONS AS DEFENSES.
1. Continuing Conduct.
315. Plaintiff contends it continues to suffer harm from the unlawful actions by the
Defendants.
316. The continued tortious and unlawful conduct by the Defendants causes a repeated
or continuous injury. The damages have not occurred all at once but have continued to occur and
have increased as time progresses. The tort is not completed nor have all the damages been
incurred until the wrongdoing ceases. The wrongdoing and unlawful activity by Defendants has
not ceased. The public nuisance remains unabated. The conduct causing the damages remains
unabated.
2. Equitable Estoppel.
317. Defendants are equitably estopped from relying upon a statute of limitations
defense because they undertook active efforts to deceive Plaintiff and to purposefully conceal
their unlawful conduct and fraudulently assure the public, including the State, the Plaintiff, and
Plaintiff’s Community, that they were undertaking efforts to comply with their obligations under
the state and federal controlled substances laws, all with the goal of protecting their registered
manufacturer or distributor status in the State and to continue generating profits.
Notwithstanding the allegations set forth above, the Defendants affirmatively assured the public,
including the State, the Plaintiff, and Plaintiff’s Community, that they are working to curb the
opioid epidemic.

108

 318. For example, a Cardinal Health executive claimed that it uses “advanced analytics”
to monitor its supply chain, and assured the public it was being “as effective and efficient as
possible in constantly monitoring, identifying, and eliminating any outside criminal activity.” 182
319. Similarly, McKesson publicly stated that it has a “best-in-class controlled substance
monitoring program to help identify suspicious orders,” and claimed it is “deeply passionate
about curbing the opioid epidemic in our country.” 183
320. Moreover, in furtherance of their effort to affirmatively conceal their conduct and
avoid detection, the Distributor Defendants, through their trade associations, HDMA and
NACDS, filed an amicus brief in Masters Pharmaceuticals, which made the following
statements: 184
a. “HDMA and NACDS members not only have statutory and regulatory
responsibilities to guard against diversion of controlled prescription drugs, but
undertake such efforts as responsible members of society.”
b. “DEA regulations that have been in place for more than 40 years require distributors
to report suspicious orders of controlled substances to DEA based on information
readily available to them (e.g., a pharmacy’s placement of unusually frequent or large
orders).”
c. “Distributors take seriously their duty to report suspicious orders, utilizing both
computer algorithms and human review to detect suspicious orders based on the
generalized information that is available to them in the ordering process.”
d. “A particular order or series of orders can raise red flags because of its unusual size,
frequency, or departure from typical patterns with a given pharmacy.”
e. “Distributors also monitor for and report abnormal behavior by pharmacies placing
orders, such as refusing to provide business contact information or insisting on paying
in cash.”
182

Bernstein et al., supra.

183

Scott Higham et al., Drug Industry Hired Dozens of Officials from the DEA as the Agency Tried to Curb Opioid
Abuse, Wash. Post, Dec. 22, 2016, https://www.washingtonpost.com/investigations/key-officials-switch-sides-fromdea-to-pharmaceutical-industry/2016/12/22/55d2e938-c07b-11e6-b527-949c5893595e_story.html.
184

Brief for HDMA and NACDS, 2016 WL 1321983, at *3-4, *25.

109

 Through the above statements made on their behalf by their trade associations, and other similar
statements assuring their continued compliance with their legal obligations, the Distributor
Defendants not only acknowledged that they understood their obligations under the law, but they
further affirmed that their conduct was in compliance with those obligations.
321. The Distributor Defendants have also concealed and prevented discovery of
information, including data from the ARCOS database that will confirm their identities and the
extent of their wrongful and illegal activities.
322. The Manufacturer Defendants distorted the meaning or import of studies they cited
and offered them as evidence for propositions the studies did not support. The Manufacturer
Defendants invented “pseudoaddiction” and promoted it to an unsuspecting medical community.
The Manufacturer Defendants provided the medical community with false and misleading
information about ineffectual strategies to avoid or control opioid addiction. The Manufacturer
Defendants recommended to the medical community that dosages be increased, without
disclosing the risks. The Manufacturer Defendants spent millions of dollars over a period of
years on a misinformation campaign aimed at highlighting opioids’ alleged benefits, disguising
the risks, and promoting sales. The medical community, consumers, the State, and Plaintiff’s
Community were duped by the Manufacturer Defendants’ campaign to misrepresent and conceal
the truth about the opioid drugs that they were aggressively pushing in the State and in Plaintiff’s
Community.
323. Defendants intended that their actions and omissions would be relied upon,
including by Plaintiff and Plaintiff’s Community. Plaintiff and Plaintiff’s Community did not
know, and did not have the means to know, the truth due to Defendants’ actions and omissions.

110

 324. The Plaintiff and Plaintiff’s Community reasonably relied on Defendants’
affirmative statements regarding their purported compliance with their obligations under the law
and consent orders. To the extent statutes of limitations could apply to Plaintiff’s claims, Plaintiff
failed to commence an action within the statutory periods because of reliance on Defendants’
wrongful conduct.
325. Defendants are estopped from asserting a statute of limitations defense because
their conduct and misrepresentations were so unfair and misleading as to outweigh the public’s
interest in setting limitations on bringing actions.
326. The purposes of the statutes of limitations period, if any, are satisfied because
Defendants cannot claim prejudice due to a late filing where the Plaintiff filed suit promptly
upon discovering the facts essential to its claims, described herein, which Defendants knowingly
concealed.
V.

LEGAL CAUSES OF ACTION
COUNT I
PUBLIC NUISANCE
(Against all Defendants)

327. Plaintiff incorporates by reference all other paragraphs of this Complaint as if fully
set forth here, and further alleges as follows.
328. Each Defendant is liable for public nuisance because its conduct at issue has caused
an unreasonable and substantial interference with a right common to the general public, which is
the proximate cause of, and/or substantial factor leading to, Plaintiff’s injury. See Restatement
Second, Torts § 821B. See also Physicians Plus Ins. Corp. v. Midwest Mut. Ins. Co., 254 Wis. 2d
77, 646 N.W.2d 777, 788 n.15 (Wisconsin definition of nuisance is consistent with the definition
in the Restatement); Milwaukee Metro. Sewerage Dist. v. City of Milwaukee, 277 Wis. 2d 635,

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 658, 691 N.W.2d 658, 670 (quoting Rest. 2d Torts § 821B as simply a different way of stating
Wisconsin’s definition of “public nuisance”).
329. Under Wisconsin law, a nuisance is “a condition or activity which substantially or
unduly interferes with the use of a public place or with the activities of an entire community.”
Physicians Plus Ins. Corp., 254 Wis. at 102, 646 N.W.2d at 788.
330. Wisconsin law further declares that repeated violations of criminal statutes may be
deemed a per se public nuisance subject to an abatement action. State v. H. Samuels Co., 60 Wis.
2d 631, 637–38, 211 N.W.2d 417, 420 (1973) (“If the public is injured in its civil or property
rights or privileges or in respect to public health to any degree, that is sufficient to constitute a
public nuisance”).
331. Violations of the Wisconsin Uniform Controlled Substances Act constitute public
nuisances under ch. 823 of the Wisconsin Statutes. Wis. Stat. Ann. § 961.53.
332. Defendants have created a public nuisance under Wisconsin law.
333. The opioid epidemic is a public nuisance in Milwaukee County because of its
widespread impact on public health and safety. See Wis. Stat. Ann. § 961.001(1m) (“The
manufacture, distribution, delivery, possession and use of controlled substances for other than
legitimate purposes have a substantial and detrimental effect on the health and general welfare of
the people of this state.”).
334. Plaintiff has standing to bring claims for nuisance due to the opioid epidemic
affecting and causing harm in Plaintiff’s Community. See Wis. Stat. Ann. § 823.01.
335. By causing dangerously addictive drugs to flood the community, and to be diverted
for illicit purposes, in contravention of federal and state law, each Defendant has injuriously
affected rights common to the general public, specifically including the rights of the people of

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 the Plaintiff’s Community to public health, public safety, public peace, public comfort, and
public convenience. The public nuisance caused by Defendants’ diversion of dangerous drugs
has caused substantial annoyance, inconvenience, and injury to the public.
336. By selling dangerously addictive opioid drugs diverted from a legitimate medical,
scientific, or industrial purpose, Defendants have committed a course of conduct that injuriously
affects the safety, health, and morals of the people of the Plaintiff’s Community.
337. By failing to maintain a closed system that guards against diversion of dangerously
addictive drugs for illicit purposes, Defendants injuriously affected public rights, including the
right to public health, public safety, public peace, and public comfort of the people of the
Plaintiff’s Community.
338. Plaintiff alleges that Defendants’ wrongful and illegal actions have created a public
nuisance. Each Defendant is liable for public nuisance because its conduct at issue has caused an
unreasonable interference with a right common to the general public.
339. The Defendants have intentionally and/or unlawfully created a nuisance.
340. The residents of Plaintiff’s Community have a common right to be free from
conduct that creates an unreasonable jeopardy to the public health, welfare and safety, and to be
free from conduct that creates a disturbance and reasonable apprehension of danger to person and
property.
341. Defendants intentionally, unlawfully, and recklessly manufacture, market,
distribute, and sell prescription opioids that Defendants know, or reasonably should know, will
be diverted, causing widespread distribution of prescription opioids in and/or to Plaintiff’s
Community, resulting in addiction and abuse, an elevated level of crime, death and injuries to the

113

 residents of Plaintiff’s Community, a higher level of fear, discomfort and inconvenience to the
residents of Plaintiff’s Community, and direct costs to Plaintiff’s Community.
342. Defendants have unlawfully and/or intentionally caused and permitted dangerous
drugs under their control to be diverted such as to injure the Plaintiff’s Community and its
residents.
343. Defendants have unlawfully and/or intentionally distributed opioids or caused
opioids to be distributed without maintaining effective controls against diversion. Such conduct
was illegal.

Defendants’ failures to maintain effective controls against diversion include

Defendants’ failure to effectively monitor for suspicious orders, report suspicious orders, and/or
stop shipment of suspicious orders.
344. Defendants have caused a significant and unreasonable interference with the public
health, safety, welfare, peace, comfort and convenience, and ability to be free from disturbance
and reasonable apprehension of danger to person or property.
345. Defendants’ conduct in illegally distributing and selling prescription opioids, or
causing such opioids to be distributed and sold, where Defendants know, or reasonably should
know, such opioids will be diverted and possessed and/or used illegally in Plaintiff’s Community
is of a continuing nature.
346. Defendants’ actions have been of a continuing nature and have produced a
significant effect upon the public’s rights, including the public’s right to health and safety.
347. A violation of any rule or law controlling the distribution of a drug of abuse in
Plaintiff’s Community and the State is a public nuisance.
348. Defendants’ distribution of opioids while failing to maintain effective controls
against diversion was proscribed by statute and regulation.

114

 349. Defendants’ ongoing conduct produces an ongoing nuisance, as the prescription
opioids that they allow and/or cause to be illegally distributed and possessed in Plaintiff’s
Community will be diverted, leading to abuse, addiction, crime, and public health costs.
350. Because of the continued use and addiction caused by these illegally distributed
opioids, the public will continue to fear for its health, safety and welfare, and will be subjected to
conduct that creates a disturbance and reasonable apprehension of danger to person and property.
351. Defendants know, or reasonably should know, that their conduct will have an
ongoing detrimental effect upon the public health, safety and welfare, and the public’s ability to
be free from disturbance and reasonable apprehension of danger to person and property.
352. Defendants know, or reasonably should know, that their conduct causes an
unreasonable invasion of the public right to health, safety and welfare and the public’s ability to
be free from disturbance and reasonable apprehension of danger to person and property.
353. Defendants are aware, and at a bare minimum certainly should be aware, of the
unreasonable interference that their conduct has caused in Plaintiff’s Community. Defendants are
in the business of manufacturing, marketing, selling, and distributing prescription drugs,
including opioids, which are specifically known to Defendants to be dangerous under federal and
state law. See, e.g., 21 U.S.C. § 812 (b)(2).
354. Defendants’ conduct in marketing, distributing, and selling prescription opioids
which the defendants know, or reasonably should know, will likely be diverted for nonlegitimate, non-medical use, creates a strong likelihood that these illegal distributions of opioids
will cause death and injuries to residents in Plaintiff’s Community and otherwise significantly
and unreasonably interfere with public health, safety and welfare, and with the public’s right to
be free from disturbance and reasonable apprehension of danger to person and property.

115

 355. It is, or should be, reasonably foreseeable to defendants that their conduct will
cause deaths and injuries to residents in Plaintiff’s Community, and will otherwise significantly
and unreasonably interfere with public health, safety and welfare, and with the public’s right to
be free from disturbance and reasonable apprehension of danger to person and property.
356. The prevalence and availability of diverted prescription opioids in the hands of
irresponsible persons and persons with criminal purposes in Plaintiff’s Community not only
causes deaths and injuries, but also creates a palpable climate of fear among residents in
Plaintiff’s Community where opioid diversion, abuse, addiction are prevalent and where diverted
opioids tend to be used frequently.
357. Defendants’ conduct makes it easier for persons to divert prescription opioids,
constituting a dangerous threat to the public.
358. Defendants’ actions were, at the least, a substantial factor in opioids becoming
widely available and widely used for non-medical purposes. Because of Defendants’ special
positions within the closed system of opioid distribution, without Defendants’ actions, opioid use
would not have become so widespread, and the enormous public health hazard of prescription
opioid and heroin overuse, abuse, and addiction that now exists would have been averted.
359. The presence of diverted prescription opioids in Plaintiff’s Community, and the
consequence of prescription opioids having been diverted in Plaintiff’s Community, proximately
results in and/or substantially contributes to the creation of significant costs to the Plaintiff and to
Plaintiff’s Community in order to enforce the law, equip its police force and treat the victims of
opioid abuse and addiction.

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 360. Stemming the flow of illegally distributed prescription opioids, and abating the
nuisance caused by the illegal flow of opioids, will help to alleviate this problem, save lives,
prevent injuries and make Plaintiff’s Community a safer place to live.
361. Defendants’ conduct is a direct and proximate cause of and/or a substantial
contributing factor to opioid addiction and abuse in Plaintiff’s Community, costs borne by
Plaintiff’s Community and the Plaintiff, and a significant and unreasonable interference with
public health, safety and welfare, and with the public’s right to be free from disturbance and
reasonable apprehension of danger to person and property.
362. Defendants’ conduct constitutes a public nuisance and, if unabated, will continue to
threaten the health, safety and welfare of the residents of Plaintiff’s Community, creating an
atmosphere of fear and addiction that tears at the residents’ sense of well-being and security.
Plaintiff has a clearly ascertainable right to abate conduct that perpetuates this nuisance.
363. Defendants created an intentional nuisance. Defendants’ actions created and
expanded the abuse of opioids, which are dangerously addictive, and the ensuing associated
plague of prescription opioid and heroin addiction. Defendants knew the dangers to public
health and safety that diversion of opioids would create in Plaintiff’s Community; however,
Defendants intentionally and/or unlawfully failed to maintain effective controls against diversion
through proper monitoring, reporting and refusal to fill suspicious orders of opioids. Defendants
intentionally and/or unlawfully distributed opioids or caused opioids to be distributed without
reporting or refusing to fill suspicious orders or taking other measures to maintain effective
controls against diversion. Defendants intentionally and/or unlawfully continued to ship and
failed to halt suspicious orders of opioids, or caused such orders to be shipped. Defendants

117

 intentionally and/or unlawfully marketed opioids in manners they knew to be false and
misleading. Such actions were inherently dangerous.
364. Defendants knew the prescription opioids have a high likelihood of being diverted.
It was foreseeable to Defendants that where Defendants distributed prescription opioids or
caused such opioids to be distributed without maintaining effective controls against diversion,
including monitoring, reporting, and refusing shipment of suspicious orders, that the opioids
would be diverted, and create an opioid abuse nuisance in Plaintiff’s Community.
365. Defendants’ actions also created a nuisance by acting recklessly, negligently and/or
carelessly, in breach of their duties to maintain effective controls against diversion, thereby
creating an unreasonable risk of harm.
366. Defendants acted with actual malice because Defendants acted with a conscious
disregard for the rights and safety of other persons, and said actions have a great probability of
causing substantial harm.
367. The damages available to the Plaintiff include, inter alia, recoupment of
governmental costs, flowing from an ongoing and persistent public nuisance which the
government seeks to abate. Defendants’ conduct is ongoing and persistent, and the Plaintiff
seeks all damages flowing from Defendants’ conduct. Plaintiff further seeks to abate the
nuisance and harm created by Defendants’ conduct.
368. As a direct result of Defendants’ conduct, the Plaintiff and Plaintiff’s Community
have suffered actual injury and damages including, but not limited to, significant expenses for
police, emergency, health, prosecution, corrections and other services. The Plaintiff here seeks
recovery for its own harm.

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 369. The Plaintiff and Plaintiff’s Community have sustained specific and special injuries
because its damages include, inter alia, health services, law enforcement expenditures, and costs
related to opioid addiction treatment and overdose prevention.
370. The Plaintiff further seeks to abate the nuisance created by the Defendants’
unreasonable, unlawful, intentional, ongoing, continuing, and persistent actions and omissions
and interference with a right common to the public.
371. Plaintiff seeks all legal and equitable relief as allowed by law, including inter alia
abatement and compensatory damages, from the Defendants for the creation of a public
nuisance, attorney fees and costs, and pre- and post-judgment interest.
372. Defendants’ intentional and unlawful actions and omissions and unreasonable
interference with a right common to the public are of a continuing nature.
373. Defendants are aware, and at a bare minimum certainly should be aware, of the
unreasonable interference that their conduct has caused in the Plaintiff’s Community. Defendants
are in the business of manufacturing or distributing prescription drugs, including opioids, which
are specifically known to Defendants to be dangerous because inter alia these drugs are defined
under federal and state law as substances posing a high potential for abuse and severe addiction.
Defendants created an intentional nuisance. Defendants’ actions created and expanded the abuse
of opioids, drugs specifically codified as constituting severely harmful substances.
374. The public nuisance created by Defendants’ actions is substantial and unreasonable
– it has caused and continues to cause significant harm to the community, and the harm inflicted
outweighs any offsetting benefit. The staggering rates of opioid and heroin use resulting from the
Defendants’ abdication of their gate-keeping and diversion prevention duties, and the

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 Manufacturer Defendants’ fraudulent marketing activities, have caused harm to the entire
community that includes, but is not limited to the following:
a. The high rates of use leading to unnecessary opioid abuse, addiction, overdose,
injuries, and deaths.
b. Even children have fallen victim to the opioid epidemic. Easy access to prescription
opioids made opioids a recreational drug of choice among teenagers. Even infants
have been born addicted to opioids due to prenatal exposure, causing severe
withdrawal symptoms and lasting developmental impacts.
c. Even those residents of Plaintiff’s Community who have never taken opioids have
suffered from the public nuisance arising from Defendants’ abdication of their gatekeeper duties and fraudulent promotions. Many residents have endured both the
emotional and financial costs of caring for loved ones addicted to or injured by
opioids, and the loss of companionship, wages, or other support from family members
who have used, abused, become addicted to, overdosed on, or been killed by opioids.
d. The opioid epidemic has increased health care costs.
e. Employers have lost the value of productive and healthy employees.
f. Defendants’ conduct created an abundance of drugs available for criminal use and
fueled a new wave of addiction, abuse, and injury.
g. Defendants’ dereliction of duties and/or fraudulent misinformation campaign pushing
dangerous drugs resulted in a diverted supply of narcotics to sell, and the ensuing
demand of addicts to buy them. More prescription opioids sold by Defendants led to
more addiction, with many addicts turning from prescription opioids to heroin. People
addicted to opioids frequently require increasing levels of opioids, and many turned
to heroin as a foreseeable result.
h. The diversion of opioids into the secondary, criminal market and the increased
number of individuals who abuse or are addicted to opioids increased the demands on
health care services and law enforcement.
i. The significant and unreasonable interference with the public rights caused by
Defendants’ conduct taxed the human, medical, public health, law enforcement, and
financial resources of the Plaintiff’s Community.
j. Defendants’ interference with the comfortable enjoyment of life in the Plaintiff’s
Community is unreasonable because there is little social utility to opioid diversion
and abuse, and any potential value is outweighed by the gravity of the harm inflicted
by Defendants’ actions.

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 375. The Plaintiff and Plaintiff’s Community have sustained specific and special injuries
because its damages include inter alia health services and law enforcement expenditures, as
described in this Complaint.
376. Plaintiff seeks economic losses (direct, incidental, or consequential pecuniary
losses) resulting from Defendants’ fraudulent activity and fraudulent misrepresentations.
377. Plaintiff seeks all legal and equitable relief as allowed by law, other than such
damages disavowed herein, including inter alia injunctive relief, expenses to abate the nuisance,
restitution, disgorgement of profits, compensatory damages, civil penalties and all damages
allowed by law to be paid by the Defendants, attorney fees and costs, and pre- and post-judgment
interest. See Wis. Stat. § 823.03.
COUNT II
RACKETEER INFLUENCED AND CORRUPT ORGANIZATIONS ACT
18 U.S.C. § 1961, et seq.
(Against All Defendants)
378. Plaintiff incorporates by reference all other paragraphs of this Complaint as if fully
set forth herein, and further alleges as follows.
379. Plaintiff brings this Count on behalf of itself against the following Defendants, as
defined above: Purdue, Cephalon, Janssen, Endo, Mallinckrodt, Actavis, McKesson, Cardinal,
and AmerisourceBergen (collectively, for purposes of this Count, the “RICO Defendants”).
380. The RICO Defendants conducted and continue to conduct their business through
legitimate and illegitimate means in the form of an association-in-fact enterprise and/or a legal
entity enterprise. At all relevant times, the RICO Defendants were “persons” under 18 U.S.C. §
1961(3) because they are entities capable of holding, and do hold, “a legal or beneficial interest
in property.”

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 381. Section 1962(c) of RICO makes it unlawful “for any person employed by or
associated with any enterprise engaged in, or the activities of which affect, interstate or foreign
commerce, to conduct or participate, directly or indirectly, in the conduct of such enterprise’s
affairs through a pattern of racketeering activity or collection of unlawful debt.” 18 U.S.C. §
1962(c); United State v. Turkette, 452 U.S. 576, 580 (1981).
382. The term “enterprise” is defined as including “any individual, partnership,
corporation, association, or other legal entity, and any union or group of individuals associated in
fact although not a legal entity.” 18 U.S.C. § 1961(4); Turkette, 452 U.S. at 580; Boyle v. U.S.,
556 U.S. 938, 944 (2009). The definition of “enterprise” in Section 1961(4) includes legitimate
and illegitimate enterprises within its scope. Specifically, the section “describes two separate
categories of associations that come within the purview of an ‘enterprise’ -- the first
encompassing organizations such as corporations, partnerships, and other ‘legal entities,’ and the
second covering ‘any union or group of individuals associated in fact although not a legal
entity.’” Turkette, 452 U.S. at 577. The second category is not a more generalized description of
the first. Id.
383. For over a decade, the RICO Defendants aggressively sought to bolster their
revenue, increase profit, and grow their share of the prescription painkiller market by unlawfully
and surreptitiously increasing the volume of opioids they sold. However, the RICO Defendants
are not permitted to engage in a limitless expansion of their market through the unlawful sales of
regulated painkillers. As “registrants,” the RICO Defendants operated and continue to operate
within the “closed-system” created under the Controlled Substances Act, 21 U.S.C. § 821, et seq.
(the “CSA”). The CSA restricts the RICO Defendants’ ability to manufacture or distribute
Schedule II substances like opioids by requiring them to: (1) register to manufacture or distribute

122

 opioids; (2) maintain effective controls against diversion of the controlled substances that they
manufacturer or distribute; (3) design and operate a system to identify suspicious orders of
controlled substances, halt such unlawful sales, and report them to the DEA; and (4) make sales
within a limited quota set by the DEA for the overall production of Schedule II substances like
opioids.
384. The closed-system created by the CSA, including the establishment of quotas, was
specifically intended to reduce or eliminate the diversion of Schedule II substances like opioids
from “legitimate channels of trade” to the illicit market by controlling the quantities of the basic
ingredients needed for the manufacture of [controlled substances].” 185
385. Finding it impossible to legally achieve their ever increasing sales ambitions,
members of the Opioid Diversion Enterprise (as defined below) systematically and fraudulently
violated their statutory duty to maintain effective controls against diversion of their drugs, to
design and operate a system to identify suspicious orders of their drugs, to halt unlawful sales of
suspicious orders, and to notify the DEA of suspicious orders. 186 As discussed in detail below,
through the RICO Defendants’ scheme, members of the Opioid Diversion Enterprise repeatedly
engaged in unlawful sales of painkillers which, in turn, artificially and illegally increased the
annual production quotas for opioids allowed by the DEA. 187 In doing so, the RICO Defendants
allowed hundreds of millions of pills to enter the illicit market which allowed them to generate
obscene profits.

185
1970 U.S.C.C.A.N. 4566 at 5490; see also Testimony of Joseph T. Rannazzisi before the Caucus on International
Narcotics Control, United States Senate, May 5, 2015 (available at
https://www.drugcaucus.senate.gov/sites/default/files/Rannazzisi%20Testimony_0.pdf).
186

21 U.S.C. § 823(a)(1), (b)(1); 21 C.F.R. § 1301.74(b)-(c).

187

21 C.F.R. § 1303.11(b); 21 C.F.R. § 1303.23.

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 386. Defendants’ illegal scheme was hatched by an association-in-fact enterprise
between the Manufacturer Defendants and the Distributor Defendants, and executed in perfect
harmony by each of them. In particular, each of the RICO Defendants were associated with, and
conducted or participated in, the affairs of the RICO enterprise (defined below and referred to
collectively as the “Opioid Diversion Enterprise”), whose purpose was to engage in the unlawful
sales of opioids, deceive the public and federal and state regulators into believing that the RICO
Defendants were faithfully fulfilling their statutory obligations. The RICO Defendants’ scheme
allowed them to make billions in unlawful sales of opioids and, in turn, increase and/or maintain
high production quotas with the purpose of ensuring unlawfully increasing revenues, profits, and
market share. As a direct result of the RICO Defendants’ fraudulent scheme, course of conduct,
and pattern of racketeering activity, they were able to extract billions of dollars of revenue from
the addicted American public, while entities like the Plaintiff experienced multi-millions of
dollars of injury caused by the reasonably foreseeable consequences of the prescription opioid
addiction epidemic. As explained in detail below, the RICO Defendants’ misconduct violated
Section 1962(c) and Plaintiff is entitled to treble damages for its injuries under 18 U.S.C. §
1964(c).
387. Alternatively, the RICO Defendants were members of a legal entity enterprise
within the meaning of 18 U.S.C. § 1961(4), through which the RICO Defendants conducted their
pattern of racketeering activity in this jurisdiction and throughout the United States. Specifically,
the Healthcare Distribution Alliance (the “HDA”) 188 is a distinct legal entity that satisfies the
definition of a RICO enterprise. The HDA is a non-profit corporation formed under the laws of

188

Health Distribution Alliance, History, Health Distribution Alliance, (last accessed on September 15, 2017),
https://www.healthcaredistribution.org/about/hda-history.

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 the District of Columbia and doing business in Virginia. As a non-profit corporation, HDA
qualifies as an “enterprise” within the definition set out in 18 U.S.C. § 1961(4) because it is a
corporation and a legal entity.
388. On information and belief, each of the RICO Defendants is a member, participant,
and/or sponsor of the HDA and utilized the HDA to conduct the Opioid Diversion Enterprise and
to engage in the pattern of racketeering activity that gives rise to the Count.
389. Each of the RICO Defendants is a legal entity separate and distinct from the HDA.
And, the HDA serves the interests of distributors and manufacturers beyond the RICO
Defendants. Therefore, the HDA exists separately from the Opioid Diversion Enterprise, and
each of the RICO Defendants exists separately from the HDA. Therefore, the HDA may serve as
a RICO enterprise.
390. The legal and association-in-fact enterprises alleged in the previous and subsequent
paragraphs were each used by the RICO Defendants to conduct the Opioid Diversion Enterprise
by engaging in a pattern of racketeering activity. Therefore, the legal and association-in-fact
enterprises alleged in the previous and subsequent paragraphs are pleaded in the alternative and
are collectively referred to as the “Opioid Diversion Enterprise.”
A. THE OPIOID DIVERSION ENTERPRISE
391. Recognizing that there is a need for greater scrutiny over controlled substances due
to their potential for abuse and danger to public health and safety, the United States Congress
enacted the Controlled Substances Act in 1970. 189 The CSA and its implementing regulations
created a closed-system of distribution for all controlled substances and listed chemicals. 190
189

Joseph T. Rannazzisi Decl. ¶ 4, Cardinal Health, Inc. v. Eric Holder, Jr., Attorney General, D.D.C. Case No. 12cv-185 (Document 14-2 February 10, 2012).

190

See H.R. Rep. No. 91-1444, 1970 U.S.C.C.A.N. at 4566.

125

 Congress specifically designed the closed chain of distribution to prevent the diversion of legally
produced controlled substances into the illicit market. 191 As reflected in comments from United
States Senators during deliberation on the CSA, the “[CSA] is designed to crack down hard on
the narcotics pusher and the illegal diverters of pep pills and goof balls.” 192 Congress was
concerned with the diversion of drugs out of legitimate channels of distribution when it enacted
the CSA and acted to halt the “widespread diversion of [controlled substances] out of legitimate
channels into the illegal market.” 193 Moreover, the closed-system was specifically designed to
ensure that there are multiple ways of identifying and preventing diversion through active
participation by registrants within the drug delivery chain. 194 All registrants – manufacturers and
distributors alike – must adhere to the specific security, recordkeeping, monitoring and reporting
requirements that are designed to identify or prevent diversion. 195 When registrants at any level
fail to fulfill their obligations, the necessary checks and balances collapse. 196 The result is the
scourge of addiction that has occurred.
392. In 2006 and 2007, the DEA issued multiple letters to the Distributor Defendants
reminding them of their obligation to maintain effective controls against diversion of particular
controlled substances, design and operate a system to disclose suspicious orders, and to inform
191

Gonzalez v. Raich, 545 U.S. 1, 12-14 (2005); 21 U.S.C. § 801(20; 21 U.S.C. §§ 821-824, 827, 880; H.R. Rep.
No. 91-1444, 1970 U.S.C.C.A.N. 4566, 4572 (Sept. 10, 1970).
192

See H.R. Rep. No. 91-1444, 1970 U.S.C.C.A.N. at 4566; 116 Cong. Rec. 977-78 (Comments of Sen. Dodd, Jan
23, 1970).
193

See Testimony of Joseph T. Rannazzisi before the Caucus on International Narcotics Control, United State
Senate, May 5, 2015 (available at
https://www.drugcaucus.senate.gov/sites/default/files/Rannazzisi%20Testimony_0.pdf).

194

See Statement of Joseph T. Rannazzisi before the Caucus on International Narcotics Control United States
Senate, July 18, 2012 (available at
https://www.justice.gov/sites/default/files/testimonies/witnesses/attachments/07/18/12/07-18-12-dea-rannazzisi.pdf).

195

Id.

196

Joseph T. Rannazzisi Decl. ¶ 10, Cardinal Health, Inc. v. Eric Holder, Jr., Attorney General, D.D.C. Case No.
12-cv-185 (Document 14-2 February 10, 2012).

126

 the DEA of any suspicious orders. 197 The DEA also published suggested questions that a
distributor should ask prior to shipping controlled substances, in order to “know their
customers.” 198
393. Central to the closed-system created by the CSA was the directive that the DEA
determine quotas of each basic class of Schedule I and II controlled substances each year. The
quota system was intended to reduce or eliminate diversion from “legitimate channels of trade”
by controlling the “quantities of the basic ingredients needed for the manufacture of [controlled
substances], and the requirement of order forms for all transfers of these drugs.” 199 When
evaluating production quotas, the DEA was instructed to consider the following information:
a. Information provided by the Department of Health and Human Services;
b. Total net disposal of the basic class by all manufacturers;
c. Trends in the national rate of disposal of the basic class;
d. An applicant’s production cycle and current inventory position;
e. Total actual or estimated inventories of the class and of all substances
manufactured from the class and trends in inventory accumulation; and
f. Other factors such as: changes in the currently accepted medical use of substances
manufactured for a basic class; the economic and physical availability of raw
materials; yield and sustainability issues; potential disruptions to production; and
unforeseen emergencies. 200

197

Joseph T. Rannazzisi, In Reference to Registration # RC0183080 (September 27, 2006); Joseph T. Rannazzisi, In
Reference to Registration # RC0183080 (December 27, 2007).
198

Suggested Questions a Distributor should ask prior to shipping controlled substances, Drug Enforcement
Administration (available at
https://www.deadiversion.usdoj.gov/mtgs/pharm_industry/14th_pharm/levinl_ques.pdf).
199

1970 U.S.C.C.A.N. 4566 at 5490; see also Testimony of Joseph T. Rannazzisi before the Caucus on International
Narcotics Control, United States Senate, May 5, 2015 (available at
https://www.drugcaucus.senate.gov/sites/default/files/Rannazzisi%20Testimony_0.pdf).
200

See Testimony of Joseph T. Rannazzisi before the Caucus on International Narcotics Control, United States
Senate, May 5, 2015 (available at
https://www.drugcaucus.senate.gov/sites/default/files/Rannazzisi%20Testimony_0.pdf).

127

 394. It is unlawful for a registrant to manufacture a controlled substance in Schedule II,
like prescription opioids, that is (1) not expressly authorized by its registration and by a quota
assigned to it by DEA, or (2) in excess of a quota assigned to it by the DEA. 201
395. At all relevant times, the RICO Defendants operated as an association-in-fact
enterprise formed for the purpose of unlawfully increasing sales, revenues and profits by
disregarding their statutory duty to identify, investigate, halt and report suspicious orders of
opioids and diversion of their drugs into the illicit market, in order to unlawfully increase the
quotas set by the DEA and allow them to collectively benefit from the unlawful formation of a
greater pool of prescription opioids from which to profit. The RICO Defendants conducted their
pattern of racketeering activity in this jurisdiction and throughout the United States through this
enterprise.
396. The opioid epidemic has its origins in the mid-1990s when, between 1997 and
2007, per capita purchase of methadone, hydrocodone, and oxycodone increased 13-fold, 4-fold,
and 9-fold, respectively. By 2010, enough prescription opioids were sold in the United States to
medicate every adult in the county with a dose of 5 milligrams of hydrocodone every 4 hours for
1 month. 202 On information and belief, the Opioid Diversion Enterprise has been ongoing for at
least the last decade. 203
397. The Opioid Diversion Enterprise was and is a shockingly successful endeavor. The
Opioid Diversion Enterprise has been conducting business uninterrupted since its genesis. But, it

201

Id. (citing 21 U.S.C. 842(b)).

202

Keyes KM, Cerdá M, Brady JE, Havens JR, Galea S., Understanding the rural-urban differences in nonmedical
prescription opioid use and abuse in the United States, Am J Public Health. 2014;104(2):e52-9.
203

Matthew Perrone, Pro-Painkiller echo chamber shaped policy amid drug epidemic, The Center for Public
Integrity (September 19, 2017, 12:01 a.m.), https://www.publicintegrity.org/2016/09/19/20201/pro-painkiller-echochamber-shaped-policy-amid-drug-epidemic.

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 was not until recently that federal and state regulators finally began to unravel the extent of the
enterprise and the toll that it exacted on the American public.
398. At all relevant times, the Opioid Diversion Enterprise: (a) had an existence separate
and distinct from each RICO Defendant; (b) was separate and distinct from the pattern of
racketeering in which the RICO Defendants engaged; (c) was an ongoing and continuing
organization consisting of legal entities, including each of the RICO Defendants; (d)
characterized by interpersonal relationships among the RICO Defendants; (e) had sufficient
longevity for the enterprise to pursue its purpose; and (f) functioned as a continuing unit.
Turkette, 452 U.S. at 580; Boyle, 556 U.S. at 944 (2009). Each member of the Opioid Diversion
Enterprise participated in the conduct of the enterprise, including patterns of racketeering
activity, and shared in the astounding growth of profits supplied by fraudulently inflating opioid
sales generated as a result of the Opioid Diversion Enterprise’s disregard for their duty to prevent
diversion of their drugs into the illicit market and then requesting the DEA increase production
quotas, all so that the RICO Defendants would have a larger pool of prescription opioids from
which to profit.
399. The Opioid Diversion Enterprise also engaged in efforts to lobby against the
DEA’s authority to hold the RICO Defendants liable for disregarding their duty to prevent
diversion. Members of the Pain Care Forum (described in greater detail below) and the
Healthcare Distribution Alliance lobbied for the passage of legislation to weaken the DEA’s
enforcement authority. The Ensuring Patient Access and Effective Drug Enforcement Act
significantly reduced the DEA’s ability to issue orders to show cause and to suspend and/or

129

 revoke registrations 204 The HDA and other members of the Pain Care Forum contributed
substantial amounts of money to political campaigns for federal candidates, state candidates,
political action committees and political parties. Plaintiff is informed and believes that the Pain
Care Forum and its members, and the HDA, poured millions into lobbying efforts.
400. The Opioid Diversion Enterprise functioned by selling prescription opioids. While
there are some legitimate uses and/or needs for prescription opioids, the RICO Defendants,
through their illegal enterprise, engaged in a pattern of racketeering activity, that involves a
fraudulent scheme to increase revenue by violating state and federal laws requiring the
maintenance of effective controls against diversion of prescription opioids, and the identification,
investigation, and reporting of suspicious orders of prescription opioids destined for the illicit
drug market. The goal of Defendants’ scheme was to increase profits from opioid sales. But,
Defendants’ profits were limited by the production quotas set by the DEA, so the Defendants
refused to identify, investigate and/or report suspicious orders of their prescription opioids being
diverted into the illicit drug market. The end result of this strategy was to increase and maintain
artificially high production quotas of opioids so that there was a larger pool of opioids for
Defendants to manufacture and distribute for public consumption.
401. The Opioid Diversion Enterprise engaged in, and its activities affected, interstate
and foreign commerce because the enterprise involved commercial activities across states lines,
204

See HDMA is now the Healthcare Distribution Alliance, Pharmaceutical Commerce, (June 13, 2016, updated
July 6, 2016), http://pharmaceuticalcommerce.com/business-and-finance/hdma-now-healthcare-distributionalliance/; Lenny Bernstein & Scott Higham, Investigation: The DEA Slowed Enforcement While the Opioid
Epidemic Grew Out of Control, Wash. Post, Oct. 22, 2016, https://www.washingtonpost.com/investigations/the-deaslowed-enforcement-while-the-opioid-epidemic-grew-out-of-control/2016/10/22/aea2bf8e-7f71-11e6-8d13d7c704ef9fd9_story.html; Lenny Bernstein & Scott Higham, Investigation: U.S. Senator Calls for Investigation of
DEA Enforcement Slowdown Amid Opioid Crisis, Wash. Post, Mar. 6, 2017,
https://www.washingtonpost.com/investigations/us-senator-calls-for-investigation-of-dea-enforcementslowdown/2017/03/06/5846ee60-028b-11e7-b1e9-a05d3c21f7cf_story.html; Eric Eyre, DEA Agent: “We Had no
Leadership” in WV Amid Flood of Pain Pills, Charleston Gazette-Mail, Feb. 18, 2017,
http://www.wvgazettemail.com/news/20170218/dea-agent-we-had-no-leadership-in-wv-amid-flood-of-pain-pills-.

130

 such as manufacture, sale, distribution, and shipment of prescription opioids throughout the CityParish and this jurisdiction, and the corresponding payment and/or receipt of money from the
sale of the same.
402. Within the Opioid Diversion Enterprise, there were interpersonal relationships and
common communication by which the RICO Defendants shared information on a regular basis.
These interpersonal relationships also formed the organization of the Opioid Diversion
Enterprise. The Opioid Diversion Enterprise used their interpersonal relationships and
communication network for the purpose of conducting the enterprise through a pattern of
racketeering activity.
403. Each of the RICO Defendants had a systematic link to each other through joint
participation in lobbying groups, trade industry organizations, contractual relationships and
continuing coordination of activities. The RICO Defendants participated in the operation and
management of the Opioid Diversion Enterprise by directing its affairs, as described herein.
While the RICO Defendants participated in, and are members of, the enterprise, they each have a
separate existence from the enterprise, including distinct legal statuses, different offices and
roles, bank accounts, officers, directors, employees, individual personhood, reporting
requirements, and financial statements.
404. The RICO Defendants exerted substantial control over the Opioid Diversion
Enterprise by their membership in the Pain Care Forum, the HDA, and through their contractual
relationships.
405. The Pain Care Forum (“PCF”) has been described as a coalition of drugmakers,
trade groups and dozens of non-profit organizations supported by industry funding. The PCF
recently became a national news story when it was discovered that lobbyists for members of the

131

 PCF quietly shaped federal and state policies regarding the use of prescription opioids for more
than a decade.
406. The Center for Public Integrity and The Associated Press obtained “internal
documents shed[ding] new light on how drugmakers and their allies shaped the national response
to the ongoing wave of prescription opioid abuse.” 205 Specifically, PCF members spent over
$740 million lobbying in the nation’s capital and in all 50 statehouses on an array of issues,
including opioid-related measures. 206
407. Not surprisingly, each of the RICO Defendants who stood to profit from lobbying
in favor of prescription opioid use is a member of and/or participant in the PCF. 207 In 2012,
membership and participating organizations included the HDA (of which all RICO Defendants
are members), Endo, Purdue, Johnson & Johnson (the parent company for Janssen
Pharmaceuticals), Actavis (i.e., Allergan), and Teva (the parent company of Cephalon). 208 Each
of the Manufacturer Defendants worked together through the PCF to advance the interests of the
enterprise. But, the Manufacturer Defendants were not alone. The Distributor Defendants
actively participated, and continue to participate in the PCF, at a minimum, through their trade
organization, the HDA. 209 Plaintiff is informed and believes that the Distributor Defendants
participated directly in the PCF as well.
205

Matthew Perrone, Pro-Painkiller echo chamber shaped policy amid drug epidemic, The Center for Public
Integrity (September 19, 2017, 12:01 a.m.), https://www.publicintegrity.org/2016/09/19/20201/pro-painkiller-echochamber-shaped-policy-amid-drug-epidemic (emphasis added).
206

Id.

207

PAIN CARE FORUM 2012 Meetings Schedule, (last updated December 2011),
https://assets.documentcloud.org/documents/3108982/PAIN-CARE-FORUM-Meetings-Schedule-amp.pdf
208
Id. Plaintiff is informed and believes that Mallinckrodt became an active member of the PCF sometime after
2012.
209

Id. The Executive Committee of the HDA (formerly the HDMA) currently includes the Chief Executive Officer,
Pharmaceutical Segment for Cardinal Health, Inc., the Group President, Pharmaceutical Distribution and Strategic
Global Source for AmerisourceBergen Corporation, and the President, U.S. Pharmaceutical for McKesson

132

 408. The 2012 Meeting Schedule for the Pain Care Forum is particularly revealing on
the subject of the Defendants’ interpersonal relationships. The meeting schedule indicates that
meetings were held in the D.C. office of Powers Pyles Sutter & Verville on a monthly basis,
unless otherwise noted. Local members were “encouraged to attend in person” at the monthly
meetings. And, the meeting schedule indicates that the quarterly and year-end meetings included
a “Guest Speaker.”
409. The 2012 Pain Care Forum Meeting Schedule demonstrates that each of the
Defendants participated in meetings on a monthly basis, either directly or through their trade
organization, in a coalition of drugmakers and their allies whose sole purpose was to shape the
national response to the ongoing prescription opioid epidemic, including the concerted lobbying
efforts that the PCF undertook on behalf of its members.
410. Second, the HDA – or Healthcare Distribution Alliance – led to the formation of
interpersonal relationships and an organization between the RICO Defendants. Although the
entire HDA membership directory is private, the HDA website confirms that each of the
Distributor Defendants and the Manufacturer Defendants named in the Complaint, including
Actavis (i.e., Allergan), Endo, Purdue, Mallinckrodt and Cephalon were members of the
HDA. 210 And, the HDA and each of the Distributor Defendants, eagerly sought the active
membership and participation of the Manufacturer Defendants by advocating that one of the
benefits of membership included the ability to develop direct relationships between
Manufacturers and Distributors at high executive levels.

Corporation. Executive Committee, Healthcare Distribution Alliance (accessed on September 14, 2017),
https://www.healthcaredistribution.org/about/executive-committee.
210

Manufacturer Membership, Healthcare Distribution Alliance, (accessed on September 14, 2017),
https://www.healthcaredistribution.org/about/membership/manufacturer.

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 411. In fact, the HDA touted the benefits of membership to the Manufacturer
Defendants, advocating that membership included the ability to, among other things, “network
one on one with manufacturer executives at HDA’s members-only Business and Leadership
Conference,” “networking with HDA wholesale distributor members,” “opportunities to host and
sponsor HDA Board of Directors events,” “participate on HDA committees, task forces and
working groups with peers and trading partners,” and “make connections.” 211 Clearly, the HDA
and the Distributor Defendants believed that membership in the HDA was an opportunity to
create interpersonal and ongoing organizational relationships between the Manufacturers and
Defendants.
412. The application for manufacturer membership in the HDA further indicates the
level of connection that existed between the RICO Defendants. 212 The manufacturer membership
application must be signed by a “senior company executive,” and it requests that the
manufacturer applicant identify a key contact and any additional contacts from within its
company. The HDA application also requests that the manufacturer identify its current
distribution information and its most recent year end net sales through any HDA distributors,
including but not limited to, Defendants AmerisourceBergen, Cardinal Health, and McKesson. 213
413. After becoming members, the Distributors and Manufacturers were eligible to
participate on councils, committees, task forces and working groups, including:

211

Manufacturer Membership Benefits, Healthcare Distribution Alliance, (accessed on September 14, 2017),
https://www.healthcaredistribution.org/~/media/pdfs/membership/manufacturer-membership-benefits.ashx?la=en.
212

Manufacturer Membership Application, Healthcare Distribution Alliance, (accessed on September 14, 2017),
https://www.healthcaredistribution.org/~/media/pdfs/membership/manufacturer-membershipapplication.ashx?la=en.
213

Id.

134

 a. Industry Relations Council: “This council, composed of distributor and
manufacturer members, provides leadership on pharmaceutical distribution and
supply chain issues.” 214
b. Business Technology Committee: “This committee provides guidance to HDA
and its members through the development of collaborative e-commerce business
solutions. The committee’s major areas of focus within pharmaceutical
distribution include information systems, operational integration and the impact of
e-commerce.”
Participation in this committee includes distributors and
manufacturer members. 215
c. Health, Beauty and Wellness Committee: “This committee conducts research, as
well as creates and exchanges industry knowledge to help shape the future of the
distribution for health, beauty and wellness/consumer products in the healthcare
supply chain.” Participation in this committee includes distributors and
manufacturer members. 216
d. Logistics Operation Committee: “This committee initiates projects designed to
help members enhance the productivity, efficiency and customer satisfaction
within the healthcare supply chain. Its major areas of focus include process
automation, information systems, operational integration, resource management
and quality improvement.” Participation in this committee includes distributors
and manufacturer members. 217
e. Manufacturer Government Affairs Advisory Committee: “This committee
provides a forum for briefing HDA’s manufacturer members on federal and state
legislative and regulatory activity affecting the pharmaceutical distribution
channel. Topics discussed include such issues as prescription drug traceability,
distributor licensing, FDA and DEA regulation of distribution, importation and
Medicaid/Medicare reimbursement.” Participation in this committee includes
manufacturer members. 218
f. Bar Code Task Force: Participation includes Distributor, Manufacturer and
Service Provider Members. 219

214

Councils and Committees, Healthcare Distribution Alliance, (accessed on September 14, 2017),
https://www.healthcaredistribution.org/about/councils-and-committees
215

Id.

216

Id.

217

Id.

218

Id.

219

Id.

135

 g. eCommerce Task Force: Participation includes Distributor, Manufacturer and
Service Provider Members. 220
h. ASN Working Group: Participation includes Distributor, Manufacturer and
Service Provider Members. 221
i. Contracts and Chargebacks Working Group: “This working group explores how
the contract administration process can be streamlined through process
improvements or technical efficiencies. It also creates and exchanges industry
knowledge of interest to contract and chargeback professionals.” Participation
includes Distributor and Manufacturer Members. 222
414. The councils, committees, task forces and working groups provided the
Manufacturer and Distributor Defendants with the opportunity to work closely together in
shaping their common goals and forming the enterprise’s organization.
415. The HDA also offers a multitude of conferences, including annual business and
leadership conferences. The HDA, and the Distributor Defendants advertise these conferences to
the Manufacturer Defendants as an opportunity to “bring together high-level executives, thought
leaders and influential managers . . . to hold strategic business discussions on the most pressing
industry issues.” 223 The conferences also gave the Manufacturer and Distributor Defendants
“unmatched opportunities to network with [their] peers and trading partners at all levels of the
healthcare distribution industry.” 224 The HDA and its conferences were significant opportunities
for the Manufacturer and Distributor Defendants to interact at a high-level of leadership. And, it

220

Id.

221

Id.

222

Id.

223

Business and Leadership Conference – Information for Manufacturers, Healthcare Distribution Alliance,
(accessed on September 14, 2017), https://www.healthcaredistribution.org/events/2015-business-and-leadershipconference/blc-for-manufacturers.
224

Id.

136

 is clear that the Manufacturer Defendants embraced this opportunity by attending and sponsoring
these events. 225
416. Third, the RICO Defendants maintained their interpersonal relationships by
working together and exchanging information and driving the unlawful sales of their opioids
through their contractual relationships, including chargebacks and vault security programs.
417. The Manufacturer Defendants engaged in an industry-wide practice of paying
rebates and/or chargebacks to the Distributor Defendants for sales of prescription opioids.226 As
reported in the Washington Post, identified by Senator McCaskill, and acknowledged by the
HDA, there is an industry-wide practice whereby the Manufacturers paid the Distributors rebates
and/or chargebacks on their prescription opioid sales. 227 On information and belief, these
contracts were negotiated at the highest levels, demonstrating ongoing relationships between the
Manufacturer and Distributor Defendants. In return for the rebates and chargebacks, the
Distributor Defendants provided the Manufacturer Defendants with detailed information
regarding their prescription opioid sales, including purchase orders, acknowledgements, ship
notices, and invoices. 228 The Manufacturer Defendants used this information to gather high-level

225

2015 Distribution Management Conference and Expo, Healthcare Distribution Alliance, (accessed on September
14, 2017), https://www.healthcaredistribution.org/events/2015-distribution-management-conference.
226

Lenny Bernstein & Scott Higham, The government’s struggle to hold opioid manufacturers accountable, The
Washington Post, (April 2, 2017), https://www.washingtonpost.com/graphics/investigations/deamallinckrodt/?utm_term=.b24cc81cc356; see also, Letter from Sen. Claire McCaskill, (July 27, 2017),
https://www.mccaskill.senate.gov/imo/media/image/july-opioid-investigation-letter-manufacturers.png; Letter from
Sen. Claire McCaskill, (July 27, 2017), https://www.mccaskill.senate.gov/imo/media/image/july-opioidinvestigation-letter-manufacturers.png; Letters From Sen. Claire McCaskill, (March 28, 2017),
https://www.mccaskill.senate.gov/opioid-investigation; Purdue Managed Markets, Purdue Pharma, (accessed on
September 14, 2017), http://www.purduepharma.com/payers/managed-markets/.
227

Id.

228

Webinars, Healthcare Distribution Alliance, (accessed on September 14, 2017),
https://www.healthcaredistribution.org/resources/webinar-leveraging-edi.

137

 data regarding overall distribution and direct the Distributor Defendants on how to most
effectively sell the prescription opioids.
418. The contractual relationships among the RICO Defendants also include vault
security programs. The RICO Defendants are required to maintain certain security protocols and
storage facilities for the manufacture and distribution of their opiates. Plaintiff is informed and
believes that manufacturers negotiated agreements whereby the Manufacturers installed security
vaults for Distributors in exchange for agreements to maintain minimum sales performance
thresholds. Plaintiff is informed and believes that these agreements were used by the RICO
Defendants as a tool to violate their reporting and diversion duties in order to reach the required
sales requirements.
419. Taken together, the interaction and length of the relationships between and among
the Manufacturer and Distributor Defendants reflects a deep level of interaction and cooperation
between two groups in a tightly knit industry. The Manufacturer and Distributor Defendants
were not two separate groups operating in isolation or two groups forced to work together in a
closed system. The RICO Defendants operated together as a united entity, working together on
multiple fronts, to engage in the unlawful sale of prescription opioids. The HDA and the Pain
Care Forum are but two examples of the overlapping relationships, and concerted joint efforts to
accomplish common goals and demonstrates that the leaders of each of the RICO Defendants
was in communication and cooperation.
420. According to articles published by the Center for Public Integrity and The
Associated Press, the Pain Care Forum – whose members include the Manufacturers and the
Distributors’ trade association – has been lobbying on behalf of the Manufacturers and

138

 Distributors for “more than a decade.” 229 And, from 2006 to 2016 the Distributors and
Manufacturers worked together through the Pain Care Forum to spend over $740 million
lobbying in the nation’s capital and in all 50 statehouses on issues including opioid-related
measures. 230 Similarly, the HDA has continued its work on behalf of Distributors and
Manufacturers, without interruption, since at least 2000, if not longer. 231
421. As described above, the RICO Defendants began working together as early as 2006
through the Pain Care Forum and/or the HDA to promote the common purpose of their
enterprise. Plaintiff is informed and believes that the RICO Defendants worked together as an
ongoing and continuous organization throughout the existence of their enterprise.
B. CONDUCT OF THE OPIOID DIVERSION ENTERPRISE
422. During the time period alleged in this Complaint, the RICO Defendants exerted
control over, conducted and/or participated in the Opioid Diversion Enterprise by fraudulently
failing to comply with their federal and state obligations to identify, investigate and report
suspicious orders of opioids in order to prevent diversion of those highly addictive substances
into the illicit market, to halt such unlawful sales and, in doing so, to increase production quotas
and generate unlawful profits, as follows:
423. Defendants disseminated false and misleading statements to the public claiming
that they were complying with their obligations to maintain effective controls against diversion
of their prescription opioids.

229

Matthew Perrone, Pro-Painkiller echo chamber shaped policy amid drug epidemic, The Center for Public
Integrity (September 19, 2017, 12:01 a.m.), https://www.publicintegrity.org/2016/09/19/20201/pro-painkiller-echochamber-shaped-policy-amid-drug-epidemic.
230

Id.

231

HDA History, Healthcare Distribution Alliance, (accessed on September 14, 2017),
https://www.healthcaredistribution.org/about/hda-history.

139

 424. Defendants disseminated false and misleading statements to the public claiming
that they were complying with their obligations to design and operate a system to disclose to the
registrant suspicious orders of their prescription opioids.
425. Defendants disseminated false and misleading statements to the public claiming
that they were complying with their obligation to notify the DEA of any suspicious orders or
diversion of their prescription opioids.
426. Defendants paid nearly $800 million dollars to influence local, state and federal
governments through joint lobbying efforts as part of the Pain Care Forum. The RICO
Defendants were all members of their Pain Care Forum either directly or indirectly through the
HDA. The lobbying efforts of the Pain Care Forum and its members included efforts to pass
legislation making it more difficult for the DEA to suspend and/or revoke the Manufacturers’
and Distributors’ registrations for failure to report suspicious orders of opioids.
427. The RICO Defendants exercised control and influence over the distribution
industry by participating and maintaining membership in the HDA.
428. The RICO Defendants applied political and other pressure on the DOJ and DEA to
halt prosecutions for failure to report suspicious orders of prescription opioids and lobbied
Congress to strip the DEA of its ability to immediately suspend registrations pending
investigation by passing the “Ensuring Patient Access and Effective Drug Enforcement Act.” 232

232

See HDMA is now the Healthcare Distribution Alliance, Pharmaceutical Commerce, (June 13, 2016, updated
July 6, 2016), http://pharmaceuticalcommerce.com/business-and-finance/hdma-now-healthcare-distributionalliance/; Lenny Bernstein & Scott Higham, Investigation: The DEA Slowed Enforcement While the Opioid
Epidemic Grew Out of Control, Wash. Post, Oct. 22, 2016, https://www.washingtonpost.com/investigations/the-deaslowed-enforcement-while-the-opioid-epidemic-grew-out-of-control/2016/10/22/aea2bf8e-7f71-11e6-8d13d7c704ef9fd9_story.html; Lenny Bernstein & Scott Higham, Investigation: U.S. Senator Calls for Investigation of
DEA Enforcement Slowdown Amid Opioid Crisis, Wash. Post, Mar. 6, 2017,
https://www.washingtonpost.com/investigations/us-senator-calls-for-investigation-of-dea-enforcementslowdown/2017/03/06/5846ee60-028b-11e7-b1e9-a05d3c21f7cf_story.html; Eric Eyre, DEA Agent: “We Had no

140

 429. The RICO Defendants engaged in an industry-wide practice of paying rebates and
chargebacks to incentivize unlawful opioid prescription sales. Plaintiff is informed and believes
that the Manufacturer Defendants used the chargeback program to acquire detailed high-level
data regarding sales of the opioids they manufactured. And, Plaintiff is informed and believes
that the Manufacturer Defendants used this high-level information to direct the Distributor
Defendants’ sales efforts to regions where prescription opioids were selling in larger volumes.
430. The Manufacturer Defendants lobbied the DEA to increase Aggregate Production
Quotas, year after year by submitting net disposal information that the Manufacturer Defendants
knew included sales that were suspicious and involved the diversion of opioids that had not been
properly investigated or reported by the RICO Defendants.
431. The Distributor Defendants developed “know your customer” questionnaires and
files. This information, compiled pursuant to comments from the DEA in 2006 and 2007 was
intended to help the RICO Defendants identify suspicious orders or customers who were likely to
divert prescription opioids. 233 On information and belief, the “know your customer”
questionnaires informed the RICO Defendants of the number of pills that the pharmacies sold,
how many non-controlled substances are sold compared to controlled substances, whether the
pharmacy buys from other distributors, the types of medical providers in the area, including pain
clinics, general practitioners, hospice facilities, cancer treatment facilities, among others, and
these questionnaires put the recipients on notice of suspicious orders.
Leadership” in WV Amid Flood of Pain Pills, Charleston Gazette-Mail, Feb. 18, 2017,
http://www.wvgazettemail.com/news/20170218/dea-agent-we-had-no-leadership-in-wv-amid-flood-of-pain-pills-.
233

Suggested Questions a Distributor should ask prior to shipping controlled substances, Drug Enforcement
Administration (available at
https://www.deadiversion.usdoj.gov/mtgs/pharm_industry/14th_pharm/levinl_ques.pdf); Richard Widup, Jr.,
Kathleen H. Dooley, Esq. Pharmaceutical Production Diversion: Beyond the PDMA, Purdue Pharma and McQuite
Woods LLC, (available at https://www.mcguirewoods.com/newsresources/publications/lifesciences/product_diversion_beyond_pdma.pdf).

141

 432. The RICO Defendants refused to identify, investigate and report suspicious orders
to the DEA when they became aware of the same despite their actual knowledge of drug
diversion rings. The RICO Defendants refused to identify suspicious orders and diverted drugs
despite the DEA issuing final decisions against the Distributor Defendants in 178 registrant
actions between 2008 and 2012 234 and 117 recommended decision in registrant actions from The
Office of Administrative Law Judges. These numbers include 76 actions involving orders to
show cause and 41 actions involving immediate suspension orders -- all for failure to report
suspicious orders. 235
433. Defendants’ scheme had decision-making structure that was driven by the
Manufacturer Defendants and corroborated by the Distributor Defendants. The Manufacturer
Defendants worked together to control the state and federal Government’s response to the
manufacture and distribution of prescription opioids by increasing production quotas through a
systematic refusal to maintain effective controls against diversion, and identify suspicious orders
and report them to the DEA.
434. The RICO Defendants worked together to control the flow of information and
influence state and federal governments and political candidates to pass legislation that was proopioid. The Manufacturer and Distributor Defendants did this through their participation in the
Pain Care Forum and Healthcare Distributors Alliance.
435. The RICO Defendants also worked together to ensure that the Aggregate
Production Quotas, Individual Quotas and Procurement Quotas allowed by the DEA stayed high
and ensured that suspicious orders were not reported to the DEA. By not reporting suspicious
234

Evaluation and Inspections Div., Office of the Inspector Gen., U.S. Dep’t of Justice, The Drug Enforcement
Administration’s Adjudication of Registrant Actions 6 (2014), https://oig.justice.gov/reports/2014/e1403.pdf.
235

Id.

142

 orders or diversion of prescription opioids, the RICO Defendants ensured that the DEA had no
basis for refusing to increase or decrease the production quotas for prescription opioids due to
diversion of suspicious orders. The RICO Defendants influenced the DEA production quotas in
the following ways:
a. The Distributor Defendants assisted the enterprise and the Manufacturer
Defendants in their lobbying efforts through the Pain Care Forum;
b. The Distributor Defendants invited the participation, oversight and control of the
Manufacturer Defendants by including them in the HDA, including on the
councils, committees, task forces, and working groups;
c. The Distributor Defendants provided sales information to the Manufacturer
Defendants regarding their prescription opioids, including reports of all opioid
prescriptions filled by the Distributor Defendants;
d. The Manufacturer Defendants used a chargeback program to ensure delivery of
the Distributor Defendants’ sales information;
e. The Manufacturer Defendants obtained sales information from QuintilesIMS
(formerly IMS Health) that gave them a “stream of data showing how individual
doctors across the nation were prescribing opioids.” 236
f. The Distributor Defendants accepted rebates and chargebacks for orders of
prescription opioids;
g. The Manufacturer Defendants used the Distributor Defendants’ sales information
and the data from QuintilesIMS to instruct the Distributor Defendants to focus
their distribution efforts to specific areas where the purchase of prescription
opioids was most frequent;
h. The RICO Defendants identified suspicious orders of prescription opioids and
then continued filling those unlawful orders, without reporting them, knowing that
they were suspicious and/or being diverted into the illicit drug market;
i. The RICO Defendants refused to report suspicious orders of prescription opioids
despite repeated investigation and punishment of the Distributor Defendants by
the DEA for failure to report suspicious orders; and

236

Harriet Ryan, et al., More than 1 million OxyContin pills ended up in the hands of criminals and addicts. What
the drugmaker knew, Los Angeles Times, (July 10, 2016), http://www.latimes.com/projects/la-me-oxycontin-part2/

143

 j. The RICO Defendants withheld information regarding suspicious orders and
illicit diversion from the DEA because it would have revealed that the “medical
need” for and the net disposal of their drugs did not justify the production quotas
set by the DEA.
436. The scheme devised and implemented by the RICO Defendants amounted to a
common course of conduct characterized by a refusal to maintain effective controls against
diversion, and all designed and operated to ensure the continued unlawful sale of controlled
substances.
C. PATTERN OF RACKETEERING ACTIVITY.
437. The RICO Defendants conducted and participated in the conduct of the Opioid
Diversion Enterprise through a pattern of racketeering activity as defined in 18 U.S.C. §
1961(1)(B), including mail fraud (18 U.S.C. § 1341) and wire fraud (18 U.S.C. § 1343); and 18
U.S.C. § 1961(1)(D) by the felonious manufacture, importation, receiving, concealment buying
selling, or otherwise dealing in a controlled substance or listed chemical (as defined in section
102 of the Controlled Substance Act), punishable under any law of the United States.
1. The RICO Defendants Engaged in Mail and Wire Fraud.
438. The RICO Defendants carried out, or attempted to carry out, a scheme to defraud
federal and state regulators, and the American public by knowingly conducting or participating
in the conduct of the Opioid Diversion Enterprise through a pattern of racketeering activity
within the meaning of 18 U.S.C. § 1961(1) that employed the use of mail and wire facilities, in
violation of 18 U.S.C. § 1341 (mail fraud) and § 1343 (wire fraud).
439. The RICO Defendants committed, conspired to commit, and/or aided and abetted in
the commission of at least two predicate acts of racketeering activity (i.e. violations of 18 U.S.C.
§§ 1341 and 1343) within the past ten years. The multiple acts of racketeering activity that the
RICO Defendants committed, or aided and abetted in the commission of, were related to each

144

 other, posed a threat of continued racketeering activity, and therefore constitute a “pattern of
racketeering activity.” The racketeering activity was made possible by the RICO Defendants’
regular use of the facilities, services, distribution channels, and employees of the Opioid
Diversion Enterprise. The RICO Defendants participated in the scheme to defraud by using mail,
telephone and the Internet to transmit mailings and wires in interstate or foreign commerce.
440. The RICO Defendants used, directed the use of, and/or caused to be used,
thousands of interstate mail and wire communications in service of their scheme through
virtually uniform misrepresentations, concealments and material omissions regarding their
compliance with their mandatory reporting requirements and the actions necessary to carry out
their unlawful goal of selling prescription opioids without reporting suspicious orders or the
diversion of opioids into the illicit market.
441. In devising and executing the illegal scheme, the RICO Defendants devised and
knowingly carried out a material scheme and/or artifice to defraud by means of materially false
or fraudulent pretenses, representations, promises, or omissions of material facts. For the purpose
of executing the illegal scheme, the RICO Defendants committed these racketeering acts, which
number in the thousands, intentionally and knowingly with the specific intent to advance the
illegal scheme.
442. The RICO Defendants’ predicate acts of racketeering (18 U.S.C. § 1961(1))
include, but are not limited to:
a. Mail Fraud: The RICO Defendants violated 18 U.S.C. § 1341 by sending or
receiving, or by causing to be sent and/or received, materials via U.S. mail or
commercial interstate carriers for the purpose of executing the unlawful scheme to
design, manufacture, market, and sell the prescription opioids by means of false
pretenses, misrepresentations, promises, and omissions.
b. Wire Fraud: The RICO Defendants violated 18 U.S.C. § 1343 by transmitting
and/or receiving, or by causing to be transmitted and/or received, materials by

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 wire for the purpose of executing the unlawful scheme to design, manufacture,
market, and sell the prescription opioids by means of false pretenses,
misrepresentations, promises, and omissions.
443. The RICO Defendants’ use of the mail and wires includes, but is not limited to, the
transmission, delivery, or shipment of the following by the Manufacturers, Distributors, or third
parties that were foreseeably caused to be sent as a result of the RICO Defendants’ illegal
scheme, including but not limited to:
a. The prescription opioids themselves;
b. Documents and communications that facilitated the manufacture, purchase and
unlawful sale of prescription opioids;
c. Defendants’ DEA registrations;
d. Documents and communications that supported and/or facilitated Defendants’
DEA registrations;
e. Documents and communications that supported and/or facilitated the Defendants’
request for higher aggregate production quotas, individual production quotas, and
procurement quotas;
f. Defendants’ records and reports that were required to be submitted to the DEA
pursuant to 21 U.S.C. § 827;
g. Documents and communications related to the Defendants’ mandatory DEA
reports pursuant to 21 U.S.C. § 823 and 21 C.F.R. § 1301.74;
h. Documents intended to facilitate the manufacture and distribution of Defendants’
prescription opioids, including bills of lading, invoices, shipping records, reports
and correspondence;
i. Documents for processing and receiving payment for prescription opioids;
j. Payments from the Distributors to the Manufacturers;
k. Rebates and chargebacks from the Manufacturers to the Distributors;
l. Payments to Defendants’ lobbyists through the Pain Care Forum;
m. Payments to Defendants’ trade organizations, like the HDA, for memberships
and/or sponsorships;

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 n. Deposits of proceeds from Defendants’ manufacture and distribution of
prescription opioids; and
o. Other documents and things, including electronic communications.
444. On information and belief, the RICO Defendants (and/or their agents), for the
purpose of executing the illegal scheme, sent and/or received (or caused to be sent and/or
received) by mail or by private or interstate carrier, shipments of prescription opioids and related
documents by mail or by private carrier affecting interstate commerce, including the following:
445. Purdue manufactures multiple forms of prescription opioids, including but not
limited to: OxyContin, MS Contin, Dilaudid/Dilaudid HP, Butrans, Hysingla ER, and Targiniq
ER. Purdue manufactured and shipped these prescription opioids to the Distributor Defendants in
this jurisdiction.
446. The Distributor Defendants shipped Purdue’s prescription opioids throughout this
jurisdiction.
447. Cephalon manufactures multiple forms of prescription opioids, including but not
limited to: Actiq and Fentora. Cephalon manufactured and shipped these prescription opioids to
the Distributor Defendants in this jurisdiction.
448. The Distributor Defendants shipped Teva’s prescription opioids throughout this
jurisdiction.
449. Janssen manufactures prescription opioids known as Duragesic. Janssen
manufactured and shipped its prescription opioids to the Distributor Defendants in this
jurisdiction.
450. The Distributor Defendants shipped Janssen’s prescription opioids throughout this
jurisdiction.

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 451. Endo manufactures multiple forms of prescription opioids, including but not
limited to: Opana/Opana ER, Percodan, Percocet, and Zydone. Endo manufactured and shipped
its prescription opioids to the Distributor Defendants in the State.
452. The Distributor Defendants shipped Janssen’s prescription opioids throughout this
jurisdiction.
453. Actavis manufactures multiple forms of prescription opioids, including but not
limited to: Kadin and Norco, as well as generic versions of the drugs known as Kadian,
Duragesic and Opana. Actavis manufactured and shipped its prescription opioids to the
Distributor Defendants in this jurisdiction.
454. The Distributor Defendants shipped Actavis’ prescription opioids throughout this
jurisdiction.
455. Mallinckrodt manufactures multiple forms of prescription opioids, including but
not limited to: Exalgo and Roxicodone.
456. The Distributor Defendants shipped Mallinckrodt’s prescription opioids throughout
this jurisdiction.
457. The RICO Defendants also used the internet and other electronic facilities to carry
out their scheme and conceal the ongoing fraudulent activities. Specifically, the RICO
Defendants made misrepresentations about their compliance with federal and state laws requiring
them to identify, investigate and report suspicious orders of prescription opioids and/or diversion
of the same into the illicit market.
458. At the same time, the RICO Defendants misrepresented the superior safety features
of their order monitoring programs, ability to detect suspicious orders, commitment to preventing

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 diversion of prescription opioids and that they complied with all state and federal regulations
regarding the identification and reporting of suspicious orders of prescription opioids.
459. Plaintiff is also informed and believes that the RICO Defendants utilized the
internet and other electronic resources to exchange communications, to exchange information
regarding prescription opioid sales, and to transmit payments and rebates/chargebacks.
460. The RICO Defendants also communicated by U.S. Mail, by interstate facsimile,
and by interstate electronic mail and with various other affiliates, regional offices, regulators,
distributors, and other third-party entities in furtherance of the scheme.
461. The mail and wire transmissions described herein were made in furtherance of
Defendants’ scheme and common course of conduct to deceive regulators and the public that
Defendants were complying with their state and federal obligations to identify and report
suspicious orders of prescription opioids all while Defendants were knowingly allowing millions
of doses of prescription opioids to divert into the illicit drug market. The RICO Defendants’
scheme and common course of conduct was intended to increase or maintain high production
quotas for their prescription opioids from which they could profit.
462. Many of the precise dates of the fraudulent uses of the U.S. mail and interstate wire
facilities have been deliberately hidden, and cannot be alleged without access to Defendants’
books and records. But, Plaintiff has described the types of, and in some instances, occasions on
which the predicate acts of mail and/or wire fraud occurred. They include thousands of
communications to perpetuate and maintain the scheme, including the things and documents
described in the preceding paragraphs.
463. The RICO Defendants did not undertake the practices described herein in isolation,
but as part of a common scheme. These actions violate 18 U.S.C. § 1962(c). Various other

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 persons, firms, and corporations, including third-party entities and individuals not named as
defendants in this Complaint, may have contributed to and/or participated in the scheme with the
RICO Defendants in these offenses and have performed acts in furtherance of the scheme to
increase revenues, increase market share, and /or minimize the losses for the RICO Defendants.
464. The RICO Defendants aided and abetted others in the violations of the above laws,
thereby rendering them indictable as principals in the 18 U.S.C. §§ 1341 and 1343 offenses.
465. The RICO Defendants hid from the general public, and suppressed and/or ignored
warnings from third parties, whistleblowers and governmental entities, about the reality of the
suspicious orders that the RICO Defendants were filling on a daily basis – leading to the
diversion of hundreds of millions of doses of prescriptions opioids into the illicit market.
466. The RICO Defendants, with knowledge and intent, agreed to the overall objective
of their fraudulent scheme and participated in the common course of conduct to commit acts of
fraud and indecency in manufacturing and distributing prescription opioids.
467. Indeed, for the Defendants’ fraudulent scheme to work, each of the Defendants had
to agree to implement similar tactics regarding marketing prescription opioids and refusing to
report suspicious orders.
468. As described herein, the RICO Defendants engaged in a pattern of related and
continuous predicate acts for years. The predicate acts constituted a variety of unlawful
activities, each conducted with the common purpose of obtaining significant monies and
revenues from the sale of their highly addictive and dangerous drugs. The predicate acts also had
the same or similar results, participants, victims, and methods of commission. The predicate acts
were related and not isolated events.

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 469. The predicate acts all had the purpose of generating significant revenue and profits
for the RICO Defendants while Plaintiff was left with substantial injury to its business through
the damage that the prescription opioid epidemic caused. The predicate acts were committed or
caused to be committed by the RICO Defendants through their participation in the Opioid
Diversion Enterprise and in furtherance of its fraudulent scheme.
470. The pattern of racketeering activity alleged herein and the Opioid Diversion
Enterprise are separate and distinct from each other. Likewise, Defendants are distinct from the
enterprise.
471. The pattern of racketeering activity alleged herein is continuing as of the date of
this Complaint and, upon information and belief, will continue into the future unless enjoined by
this Court.
472. Many of the precise dates of the RICO Defendants’ criminal actions at issue here
have been hidden and cannot be alleged without access to Defendants’ books and records.
Indeed, an essential part of the successful operation of the Opioid Diversion Enterprise alleged
herein depended upon secrecy.
473. Each instance of racketeering activity alleged herein was related, had similar
purposes, involved the same or similar participants and methods of commission, and had similar
results affecting similar victims, the Plaintiff and Plaintiff’s Community. Defendants calculated
and intentionally crafted the Opioid Diversion Enterprise and their scheme to increase and
maintain their increased profits, without regard to the effect such behavior would have on
consumers in this jurisdiction, its citizens or the Plaintiff. In designing and implementing the
scheme, at all times Defendants were cognizant of the fact that those in the manufacturing and
distribution chain rely on the integrity of the pharmaceutical companies and ostensibly neutral

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 third parties to provide objective and reliable information regarding Defendants’ products and
their manufacture and distribution of those products. The Defendants were also aware that
Plaintiff and the citizens of this jurisdiction rely on the Defendants to maintain a closed system
and to protect against the non-medical diversion and use of their dangerously addictive opioid
drugs.
474. By intentionally refusing to report and halt suspicious orders of their prescription
opioids, Defendants engaged in a fraudulent scheme and unlawful course of conduct constituting
a pattern of racketeering activity.
475. It was foreseeable to Defendants that refusing to report and halt suspicious orders,
as required by the CSA and Code of Federal Regulations, would harm Plaintiff by allowing the
flow of prescriptions opioids from appropriate medical channels into the illicit drug market.
476. The last racketeering incident occurred within five years of the commission of a
prior incident of racketeering.
2. The RICO Defendants Manufactured, Sold and/or Dealt in
Controlled Substances and Their Crimes Are Punishable as
Felonies.
477. The RICO Defendants conducted and participated in the conduct of the affairs of
the Opioid Diversion Enterprise through a pattern of racketeering activity as defined in 18 U.S.C.
§ 1961(1)(D) by the felonious manufacture, importation, receiving, concealment, buying, selling,
or otherwise dealing in a controlled substance or listed chemical (as defined in section 102 of the
Controlled Substance Act), punishable under any law of the United States.
478. The RICO Defendants committed crimes that are punishable as felonies under the
laws of the United States. Specifically, 21 U.S.C. § 483(a)(4) makes it unlawful for any person to
knowingly or intentionally furnish false or fraudulent information in, or omit any material
information from, any application, report, record or other document required to be made, kept or
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 filed under this subchapter. A violation of section 483(a)(4) is punishable by up to four years in
jail, making it a felony. 21 U.S.C. § 483(d)(1).
479. Each of the RICO Defendants qualify as registrants under the CSA. Their status as
registrants under the CSA requires that they maintain effective controls against diversion of
controlled substances in schedule I or II, design and operate a system to disclose to the registrant
suspicious orders of controlled substances, and inform the DEA of suspicious orders when
discovered by the registrant. 21 U.S.C. § 823; 21 C.F.R. § 1301.74(b).
480. Pursuant to the CSA and the Code of Federal Regulations, the RICO Defendants
were required to make reports to the DEA of any suspicious orders identified through the design
and operation of their system to disclose suspicious orders.
481. The RICO Defendants knowingly and intentionally furnished false or fraudulent
information in their reports to the DEA about suspicious orders, and/or omitted material
information from reports, records and other document required to be filed with the DEA
including the Manufacturer Defendants’ applications for production quotas. Specifically, the
RICO Defendants were aware of suspicious orders of prescription opioids and the diversion of
their prescription opioids into the illicit market, and failed to report this information to the DEA
in their mandatory reports and their applications for production quotas.
482. For example, The DEA and DOJ began investigating McKesson in 2013 regarding
its monitoring and reporting of suspicious controlled substances orders. On April 23, 2015,
McKesson filed a Form-8-K announcing a settlement with the DEA and DOJ wherein it admitted

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 to violating the CSA and agreed to pay $150 million and have some of its DEA registrations
suspended on a staggered basis. The settlement was finalized on January 17, 2017. 237
483. Purdue’s experience in Los Angeles is another striking example of Defendants’
willful violation of the CSA and Code of Federal Regulations as it relates to reporting suspicious
orders of prescription opioids. In 2016, the Los Angeles Times reported that Purdue was aware
of a pill mill operating out of Los Angeles yet failed to alert the DEA. 238 The LA Times
uncovered that Purdue began tracking a surge in prescriptions in Los Angeles, including one
prescriber in particular. A Purdue sales manager spoke with company officials in 2009 about the
prescriber, asking “Shouldn’t the DEA be contacted about this?” and adding that she felt “very
certain this is an organized drug ring.” 239 Despite knowledge of the staggering amount of pills
being issued in Los Angeles, and internal discussion of the problem, “Purdue did not shut off the
supply of highly addictive OxyContin and did not tell authorities what it knew about Lake
Medical until several years later when the clinic was out of business and its leaders indicted. By
that time, 1.1 million pills had spilled into the hands of Armenian mobsters, the Crips gang and
other criminals.” 240
484. Finally, Mallinckrodt was recently the subject of a DEA and Senate investigation
for its opioid practices. Specifically, in 2011, the DEA targeted Mallinckrodt arguing that it
ignored its responsibility to report suspicious orders as 500 million of its pills ended up in

237
McKesson, McKesson Finalizes Settlement with U.S. Department of Justice and U.S. Drug Enforcement
Administration to Resolve Past Claims, About McKesson / Newsroom / Press Releases, (January 17, 2017),
http://www.mckesson.com/about-mckesson/newsroom/press-releases/2017/mckesson-finalizes-settlement-with-dojand-dea-to-resolve-past-claims/.
238
Harriet Ryan, et al., More than 1 million OxyContin pills ended up in the hands of criminals and addicts. What
the drugmaker knew, Los Angeles Times, (July 10, 2016), http://www.latimes.com/projects/la-me-oxycontin-part2/.
239

Id.

240

Id.

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 Florida between 2008 and 2012. 241 After six years of DEA investigation, Mallinckrodt agreed to
a settlement involving a $35 million fine. Federal prosecutors summarized the case by saying
that Mallinckrodt’s response was that everyone knew what was going on in Florida but they had
no duty to report it. 242
485. Plaintiff is informed and believes that the foregoing examples reflect the RICO
Defendants’ pattern and practice of willfully and intentionally omitting information from their
mandatory reports to the DEA as required by 21 C.F.R. § 1301.74. This conclusion is supported
by the sheer volume of enforcement actions available in the public record against the Distributor
Defendants. 243 For example:
a. On April 24, 2007, the DEA issued an Order to Show Cause and Immediate
Suspension Order against the AmerisourceBergen Orlando, Florida distribution
center (“Orlando Facility”) alleging failure to maintain effective controls against
diversion of controlled substances. On June 22, 2007, AmerisourceBergen entered
into a settlement that resulted in the suspension of its DEA registration;
b. On November 28, 2007, the DEA issued an Order to Show Cause and Immediate
Suspension Order against the Cardinal Health Auburn, Washington Distribution
Center (“Auburn Facility”) for failure to maintain effective controls against
diversion of hydrocodone;
c. On December 5, 2007, the DEA issued an Order to Show Cause and Immediate
Suspension Order against the Cardinal Health Lakeland, Florida Distribution
Center (“Lakeland Facility”) for failure to maintain effective controls against
diversion of hydrocodone;
d. On December 7, 2007, the DEA issued an Order to Show Cause and Immediate
Suspension Order against the Cardinal Health Swedesboro, New Jersey
Distribution Center (“Swedesboro Facility”) for failure to maintain effective
controls against diversion of hydrocodone;
241

Lenny Bernstein & Scott Higham, The government’s struggle to hold opioid manufacturers accountable, The
Washington Post, (April 2, 2017), https://www.washingtonpost.com/graphics/investigations/deamallinckrodt/?utm_term=.b24cc81cc356. This number accounted for 66% of all oxycodone sold in the state of
Florida during that time.
242

Id.

243

Evaluation and Inspections Div., Office of the Inspector Gen., U.S. Dep’t of Justice, The Drug Enforcement
Administration’s Adjudication of Registrant Actions 6 (2014), https://oig.justice.gov/reports/2014/e1403.pdf.

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 e. On January 30, 2008, the DEA issued an Order to Show Cause and Immediate
Suspension Order against the Cardinal Health Stafford, Texas Distribution Center
(“Stafford Facility”) for failure to maintain effective controls against diversion of
hydrocodone;
f. On May 2, 2008, McKesson Corporation entered into an Administrative
Memorandum of Agreement (“2008 MOA”) with the DEA which provided that
McKesson would “maintain a compliance program designed to detect and prevent
the diversion of controlled substances, inform DEA of suspicious orders required
by 21 C.F.R. § 1301.74(b), and follow the procedures established by its
Controlled Substance Monitoring Program”;
g. On September 30, 2008, Cardinal Health entered into a Settlement and Release
Agreement and Administrative Memorandum of Agreement with the DEA related
to its Auburn Facility, Lakeland Facility, Swedesboro Facility and Stafford
Facility. The document also referenced allegations by the DEA that Cardinal
failed to maintain effective controls against the diversion of controlled substances
at its distribution facilities located in McDonough, Georgia (“McDonough
Facility”), Valencia, California (“Valencia Facility”) and Denver, Colorado
(“Denver Facility”);
h. On February 2, 2012, the DEA issued an Order to Show Cause and Immediate
Suspension Order against the Cardinal Health Lakeland, Florida Distribution
Center (“Lakeland Facility”) for failure to maintain effective controls against
diversion of oxycodone;
i. On December 23, 2016, Cardinal Health agreed to pay a $44 million fine to the
DEA to resolve the civil penalty portion of the administrative action taken against
its Lakeland, Florida Distribution Center; and
j. On January 5, 2017, McKesson Corporation entered into an Administrative
Memorandum Agreement with the DEA wherein it agreed to pay a $150,000,000
civil penalty for violation of the 2008 MOA as well as failure to identify and
report suspicious orders at its facilities in Aurora CO, Aurora IL, Delran NJ,
LaCrosse WI, Lakeland FL, Landover MD, La Vista NE, Livonia MI, Methuen
MA, Santa Fe Springs CA, Washington Courthouse OH and West Sacramento
CA.
486. These actions against the Distributor Defendants confirm that the Distributors knew
they had a duty to maintain effective controls against diversion, design and operate a system to
disclose suspicious orders, and to report suspicious orders to the DEA. These actions also
demonstrate, on information and belief, that the Manufacturer Defendants were aware of the

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 enforcement against their Distributors and the diversion of the prescription opioids and a
corresponding duty to report suspicious orders.
487. The pattern of racketeering activity alleged herein is continuing as of the date of
this Complaint and, upon information and belief, will continue into the future unless enjoined by
this Court.
488. Many of the precise dates of Defendants’ criminal actions at issue herein were
hidden and cannot be alleged without access to Defendants’ books and records. Indeed, an
essential part of the successful operation of the Opioid Diversion Enterprise depended upon the
secrecy of the participants in that enterprise.
489. Each instance of racketeering activity alleged herein was related, had similar
purposes, involved the same or similar participants and methods of commission, and had similar
results affecting similar victims, including consumers in this jurisdiction and the Plaintiff.
Defendants calculated and intentionally crafted the diversion scheme to increase and maintain
profits from unlawful sales of opioids, without regard to the effect such behavior would have on
this jurisdiction, its citizens or the Plaintiff. The Defendants were aware that Plaintiff and the
citizens of this jurisdiction rely on the Defendants to maintain a closed system of manufacturing
and distribution to protect against the non-medical diversion and use of their dangerously
addictive opioid drugs.
490. By intentionally refusing to report and halt suspicious orders of their prescription
opioids, Defendants engaged in a fraudulent scheme and unlawful course of conduct constituting
a pattern of racketeering activity.

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 491. It was foreseeable to Defendants that refusing to report and halt suspicious orders,
as required by the CSA and Code of Federal Regulations would harm Plaintiff by allowing the
flow of prescriptions opioids from appropriate medical channels into the illicit drug market.
492. The last racketeering incident occurred within five years of the commission of a
prior incident of racketeering.
D. DAMAGES
493. The RICO Defendants’ violations of law and their pattern of racketeering activity
directly and proximately caused Plaintiff injury in its business and property because Plaintiff
paid for costs associated with the opioid epidemic, as described above in allegations expressly
incorporated herein by reference.
494. Plaintiff’s injuries, and those of her citizens, were proximately caused by
Defendants’ racketeering activities. But for the RICO Defendants’ conduct, Plaintiff would not
have paid the health services and law enforcement services and expenditures required as a result
of the plague of drug-addicted residents.
495. Plaintiff’s injuries and those of her citizens were directly caused by the RICO
Defendants’ racketeering activities.
496. Plaintiff was most directly harmed and there is no other Plaintiff better suited to
seek a remedy for the economic harms at issue here.
497. Plaintiff seeks all legal and equitable relief as allowed by law, including inter alia
actual damages, treble damages, equitable relief, forfeiture as deemed proper by the Court,
attorney’s fees and all costs and expenses of suit and pre- and post-judgment interest.

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 COUNT III
RACKETEER INFLUENCED AND CORRUPT ORGANIZATIONS ACT
18 U.S.C. § 1962(d), et seq.
(Against All Defendants)
498. Plaintiff hereby incorporates by reference all other paragraphs of this Complaint as
if fully set forth herein, and further alleges as follows.
499. Plaintiff brings this claim on its own behalf against all RICO Defendants. At all
relevant times, the RICO Defendants were associated with the Opioid Diversion Enterprise and
agreed and conspired to violate 18 U.S.C. § 1962(c), that is, they agreed to conduct and
participate, directly and indirectly, in the conduct of the affairs of the Opioid Diversion
Enterprise through a pattern of racketeering activity in violation of 18 U.S.C. § 1962(d). Under
Section 1962(d) it is unlawful for “any person to conspire to violate” Section 1962(d), among
other provisions. 18 U.S.C. § 1962(d).
500. Defendants conspired to violate Section 1962(c), as alleged more fully above, by
conducting the affairs of the Opioid Diversion Enterprise through a pattern of racketeering
activity, as incorporated by reference below.
A. THE OPIOID DIVERSION ENTERPRISE.
501. For efficiency and avoiding repetition, for purposes of this claim, Plaintiff
incorporates by reference the paragraphs set out above concerning the “Opioid Diversion
Enterprise.”
B. CONDUCT OF THE OPIOID DIVERSION ENTERPRISE.
502. For efficiency and avoiding repetition, for purposes of this claim, Plaintiff
incorporates by reference the paragraphs set out above concerning the “Conduct of the Opioid
Diversion Enterprise.”
C. PATTERN OF RACKETEERING ACTIVITY.

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 503. For efficiency and avoiding repetition, for purposes of this claim, Plaintiff
incorporates by reference the paragraphs set out above concerning the “Pattern of Racketeering
Activity.”
D. DAMAGES.
504. The RICO Defendants’ violations of law and their pattern of racketeering activity
directly and proximately caused Plaintiff injury in its business and property because Plaintiff
paid for costs associated with the opioid epidemic, as described above in allegations expressly
incorporated herein by reference.
505. Plaintiff’s injuries, and those of her citizens, were proximately caused by the RICO
Defendants’ racketeering activities. But for the RICO Defendants’ conduct, Plaintiff would not
have paid the health services and law enforcement services and expenditures required as a result
of the plague of drug-addicted residents.
506. Plaintiff’s injuries and those of her citizens were directly caused by the RICO
Defendants’ racketeering activities.
507. Plaintiff was most directly harmed and there is no other Plaintiff better suited to
seek a remedy for the economic harms at issue here.
508. Plaintiff seeks all legal and equitable relief as allowed by law, including inter alia
actual damages, treble damages, equitable relief, forfeiture as deemed proper by the Court,
attorney’s fees and all costs and expenses of suit and pre- and post-judgment interest.
COUNT IV
WISCONSIN DECEPTIVE TRADE PRACTICES ACT,
Wis. Stat. Ann. § 100.18
(Against All Defendants)
509. Plaintiff incorporates by reference all other paragraphs of this Complaint as if fully
set forth here, and further alleges as follows.

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 510. Plaintiff brings this count under the “Fraudulent representations” section of
Wisconsin’s Deceptive Trade Practices Act. Wis. Stat. Ann. § 100.18. “Any person suffering
pecuniary loss because of a violation of this section by any other person may sue in any court of
competent jurisdiction and shall recover such pecuniary loss.” Wis. Stat. Ann. § 100.18(11)(b).
511. Section 100.18 provides that “[n]o person, firm, corporation or association, . . .
with intent to sell, distribute, increase the consumption of any . . . merchandise . . . to the public
for sale, . . . or other distribution, . . . shall make, publish, disseminate, circulate, or place before
the public, or cause, directly or indirectly, to be made, published, disseminated, circulated, or
placed before the public, in this state, in a newspaper, magazine or other publication, or in the
form of a book, notice, handbill, poster, bill, circular, pamphlet, letter, sign, placard, card, label,
or over any radio or television station . . . an advertisement, announcement, statement or
representation of any kind . . . which. . . is untrue, deceptive or misleading.” Wis. Stat. Ann. §
100.18(1).
512. The elements of a claim under section 100.18(1) are: 1) the defendant made a
representation to the public with the intent to induce an obligation, 2) the representation was
untrue, deceptive or misleading, and 3) the representation caused a pecuniary loss to the plaintiff.
See, e.g., Novell v. Migliaccio, 309 Wis.2d 132, 150, 749 N.W.2d 544, 552 (cits. om.) “[T]he
purpose of § 100.18 is to deter sellers from making false and misleading representations in order
to protect the public.” Id., at 145, 749 N.W.2d at 550.
513. Defendants violated section 100.18(1) by making repeated representations to the
public that were untrue, deceptive and misleading, with the intent to sell or induce the sale of
prescription opioids. These representations caused pecuniary losses to Plaintiff and Plaintiff’s
Community.

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 514. Each Defendant failed to report suspicious orders of and/or prevent the diversion of
highly addictive prescription drugs to illegal sources.
515. Because of the dangerously addictive nature of these drugs, the Defendants’
marketing, sales, and/or distribution practices unlawfully caused an opioid and heroin plague and
epidemic in the State and Plaintiff’s Community. Each Defendant had a non-delegable duty to
guard against and prevent the diversion of prescription opioids to other than legitimate medical,
scientific, and industrial channels.
516. The Defendants failed to disclose and mispresented the material facts that inter alia
they were not in compliance with laws and regulations requiring that they maintain a system to
prevent diversion, protect against addiction and severe harm, and specifically monitor,
investigate, report, and refuse suspicious orders. But for these material factual omissions and
misrepresentations, the Defendants would not have been able to sell opioids, and the Defendants
would not have been able to receive and renew licenses to sell opioids.
517. As evidenced by the conduct detailed above, the Defendants falsely misrepresented
to the public that Defendants were complying with their legal obligations to monitor, detect,
investigate, refuse to fill, and report suspicious orders of prescription opioids.
518. As alleged herein, each Manufacturer Defendant wrongfully represented to the
public that the opioid prescription medications they manufactured, marketed, distributed and sold
had characteristics, uses and benefits that they do not have.
519. The Manufacturer Defendants also wrongfully represented to the public that the
opioid prescription medications were safe and effective when such representations were untrue,
false and misleading.

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 520. The Manufacturer Defendants also used exaggeration and/or ambiguity as to
material facts and omitted material facts, which tended to deceive and/or did in fact deceive the
public.
521. Because of the dangerously addictive nature of these drugs, which the
Manufacturer Defendants concealed and misrepresented, they lacked medical value, and in fact
caused addiction and overdose deaths; therefore, Defendants’ sales and marketing of opioids to
the public constituted a violation of State law.
522. The Manufacturer Defendants made deceptive representations to the public about
the use of opioids to treat chronic non-cancer pain. Each Manufacturer Defendant also omitted or
concealed material facts and failed to correct prior misrepresentations and omissions to the
public about the risks and benefits of opioids. Each Defendant’s omissions rendered even their
seemingly truthful statements about opioids deceptive.
523. The Manufacturer Defendants also made untrue, false, and misleading statements
that included, but were not limited to:
a. Claiming or implying that opioids would improve patients’ function and quality
of life;
b. Mischaracterizing the risk of opioid addiction and abuse, including by stating or
implying the opioids were rarely addictive, that “steady state” and abuse-resistant
properties meant the drugs were less likely to be addictive or abused, and that
specific opioid drugs were less addictive or less likely to be abused than other
opioids;
c. Claiming or implying that addiction can be avoided or successfully managed
through the use of screening and other tools;
d. Promoting the misleading concept of pseudoaddiction, thus concealing the true
risk of addiction;
e. Mischaracterizing the difficulty of discontinuing opioid therapy, including by
mischaracterizing the prevalence and severity of withdrawal symptoms;

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 f. Claiming of implying that increased doses of opioids pose no significant
additional risk;
g. Misleadingly depicting the safety profile of opioids prescribed by minimizing
their risks and adverse effects while emphasizing or exaggerating the risks of
competing products, including NSAIDs; and
h. In the case of Purdue, mischaracterizing OxyContin’s onset of action and duration
of efficacy to imply that the drug provided a full 12 hours of pain relief.
524. Defendants’ unfair, deceptive, and unconscionable representations, concealments,
and omissions are reasonably calculated to deceive the State, the public, Plaintiff’s Community,
and Plaintiff.
525. As described more specifically above, Defendants’ representations, concealments,
and omissions constitute a willful course of conduct which continues to this day.
526. The damages which Plaintiff seeks to recover were sustained as a direct and
proximate cause of the Defendants’ intentional and/or unlawful actions.
527. The Defendants’ actions and omissions to the public in the course of marketing,
selling, and distributing prescriptions opioids constitute deceptive trade practices under
Wisconsin law.
528. Defendants have engaged and are engaging in repeated and willful unfair or
deceptive acts or practices, and unconscionable trade practices, in the conduct of commerce in
this State and in Plaintiff’s Community.
529. Defendants acted intentionally and/or unlawfully.
530. Defendants’ actions were directed toward the public, the Plaintiff and Plaintiff’s
Community, and proximately caused injury to Plaintiff, as alleged herein.
531. The Defendants egregiously, knowingly, willfully and/or unlawfully engaged in the
deceptive trade practices described herein.
532. The Defendants’ actions offend established public policy.

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 533. Defendants’ actions affected commerce and constituted commercial activity.
534. Plaintiff has been damaged, and is likely to be further damaged in the future, by the
misrepresentations described herein.
535. Plaintiff seeks all damages pursuant to Wis. Stat. Ann. § 100.18(11)(b) including
costs and attorney fees, for injuries sustained because of Defendants’ violations of Wis. Stat.
Ann. § 100.18.
536. Plaintiff seeks all legal and equitable relief as allowed by law, other than such
damages disavowed herein, including inter alia injunctive relief, restitution, disgorgement of
profits, compensatory damages, attorney fees and costs, and pre- and post-judgment interest.
COUNT V
NEGLIGENCE AND NEGLIGENT MISREPRESENTATION
(Against All Defendants)
537. Plaintiff incorporates by reference all other paragraphs of this Complaint as if fully
set forth here, and further alleges as follows.
538. Plaintiff seeks economic damages which were the foreseeable result of the
Defendants’ intentional and/or unlawful actions and omissions.
539. Under State law, to establish actionable negligence, one must show: the existence
of a duty to conform to a standard of conduct for the protection of others against unreasonable
risks, a breach of that duty, and injury resulting proximately therefrom and/or that was
substantially caused thereby. All such essential elements exist here.
540. Defendants could have reasonably foreseen the probable harm as a result of their
negligence. Padilla v. Bydalek, 56 Wis. 2d 772, 778, 203 N.W.2d 15, 19 (1973) (citations
omitted). Defendants’ acts and omissions were a substantial factor in causing harm to Plaintiff
and Plaintiff’s Community. See Morgan v. Pennsylvania Gen. Ins. Co., 87 Wis. 2d 723, 735-36,
275 N.W.2d 660, 666 (1979).
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 541. Further, as Section 302B of the Restatement of Torts provides: “An act or an
omission may be negligent if the actor realizes or should realize that it involves an unreasonable
risk of harm to another through the conduct of the other or a third person which is intended to
cause harm, even though such conduct is criminal.”
542. Each Defendant had an obligation to exercise reasonable care in manufacturing,
marketing, selling, and distributing highly dangerous opioid drugs to the State and Plaintiff’s
Community.
543. Each Defendant had an obligation to exercise due care in manufacturing,
marketing, selling, and distributing highly dangerous opioid drugs in the State and Plaintiff’s
Community.
544. Each Defendant owed a duty to the Plaintiff, and to the public in Plaintiff’s
Community, because the injury was foreseeable, and in fact foreseen, by the Defendants.
545. Reasonably prudent manufacturers and distributors of prescription opioids would
have anticipated that the scourge of opioid addiction would wreak havoc on communities and
impose significant costs upon the governmental entities associated with those communities. The
closed system of opioid distribution whereby wholesale distributors are the gatekeepers between
manufacturers and pharmacies, and wherein all links in the chain have a duty to prevent
diversion, exists for the purpose of controlling dangerous substances such as opioids and
preventing diversion and abuse.
546. Reasonably prudent manufacturers of pharmaceutical products would know that
aggressively pushing highly addictive opioids for chronic pain would result in the severe harm of
addiction, foreseeably causing patients to seek increasing levels of opioids, frequently turning to

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 the illegal drug market as a result of a drug addiction that was foreseeable to the Manufacturer
Defendants.
547. Moreover, law enforcement repeatedly warned Defendants of the unlawfulness and
consequences of their actions and omissions.
548. The escalating amounts of addictive drugs flowing through Defendants’ businesses,
and the sheer volume of these prescription opioids, further alerted Defendants that addiction was
fueling increased consumption and that legitimate medical purposes were not being served.
549. As described above in allegations expressly incorporated herein, Distributor
Defendants breached their duties to exercise due care in the business of wholesale distribution of
dangerous opioids, which are Schedule II Controlled Substances, by failing to monitor for,
failing to report, and filling highly suspicious orders time and again. Because the very purpose of
these duties was to prevent the resulting harm – diversion of highly addictive drugs for nonmedical purposes – the causal connection between Defendants’ breach of duties and the ensuing
harm was entirely foreseeable.
550. The elements of negligent misrepresentation in Wisconsin are: (1) a duty of care or
voluntary assumption of a duty on the part of the defendant; (2) a breach of that duty, i.e., failure
to exercise ordinary care in making the representation or in ascertaining the facts; (3) a causal
link between the conduct and the injury; and (4) actual loss or damage as a result of the injury.
D'Huyvetter v. A.O. Smith Harvestore Prod., 164 Wis. 2d 306, 331, 475 N.W.2d 587, 596 (Ct.
App. 1991) (cit. om.). The representation must be of a fact and made by the defendant, the
representation of fact must be untrue, and the plaintiff must believe such representation and rely
to its detriment. Kailin v. Armstrong, 252 Wis. 2d 676, 708, n. 23, 643 N.W.2d 132, 148 (citing
Ollerman v. O'Rourke Co., 94 Wis. 2d 17, 25, 288 N.W.2d 95, 99 (1980)).

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 551. As described elsewhere in the Complaint in allegations expressly incorporated
herein, Distributor Defendants misrepresented their compliance with their duties under the law
and concealed their noncompliance and shipments of suspicious orders of opioids to Plaintiff’s
Community and destinations from which they knew opioids were likely to be diverted into
Plaintiff’s Community, in addition to other misrepresentations alleged and incorporated herein.
552. As described elsewhere in the Complaint in allegations expressly incorporated
herein, Manufacturer Defendants breached their duties to exercise due care in the business of
pharmaceutical manufacturers of dangerous opioids, which are Schedule II Controlled
Substances, by misrepresenting the nature of the drugs and aggressively promoting them for
chronic pain for which they knew the drug were not safe or suitable.
553. The Manufacturer Defendants misrepresented and concealed the addictive nature of
prescription opioids and their lack of suitability for chronic pain, in addition to other
misrepresentations alleged and incorporated herein.
554. All Defendants breached their duties to prevent diversion and report and halt
suspicious orders, and they misrepresented their compliance with their legal duties.
555. The Defendants’ breaches were intentional and/or unlawful, and their conduct was
willful, wanton, malicious, reckless, oppressive, and/or fraudulent.
556. Plaintiff justifiably relied on Defendants’ representations and/or concealments, both
directly and indirectly. This reliance proximately caused Plaintiff’s injuries.
557. The causal connection between the Defendants’ breaches of their duties and
misrepresentations and the ensuing harm was entirely foreseeable.

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 558. As described above in allegations expressly incorporated herein, Defendants’
breaches of duty and misrepresentations caused, bear a causal connection with and/or
proximately resulted in the damages sought herein.
559. The Defendants’ breaches of their duties and misrepresentations were the cause-infact of Plaintiff’s injuries.
560. The risk of harm to Plaintiff and Plaintiff’s Community and the harm caused should
have been reasonably foreseen by Defendants. The Defendants’ conduct was substantial factor
in causing Plaintiff’s injuries.
561. The Defendants were selling dangerous drugs statutorily categorized as posing a
high potential for abuse and severe dependence. The Defendants knowingly traded in drugs that
presented a high degree of danger if prescribed incorrectly or diverted to other than medical,
scientific, or industrial channels. However, the Defendants breached their duties to monitor for,
report, and halt suspicious orders, breached their duties to prevent diversion, and, further,
misrepresented what their duties were and their compliance with their legal duties.
562. The Defendants failed to disclose the material facts that inter alia they were not in
compliance with laws and regulations requiring that they maintain a system to prevent diversion,
protect against addiction and severe harm, and specifically monitor, investigate, report, and
refuse suspicious orders. But for these material factual omissions, the Defendants would not have
been able to sell opioids.
563. As alleged herein, each Manufacturer Defendant wrongfully represented that the
opioid prescription medications they manufactured, marketed and sold had characteristics, uses
or benefits that they do not have. The Manufacturer Defendants also wrongfully misrepresented

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 that the opioids were safe and effective when the Manufacturer Defendants knew, or should have
known, such representations were untrue, false and misleading.
564. Because of the dangerously addictive nature of these drugs, which the
Manufacturer Defendants concealed and misrepresented, they lacked medical value and in fact
caused addiction and overdose deaths.
565. The Manufacturer Defendants made deceptive representations about the use of
opioids to treat chronic non-cancer pain. Each Manufacturer Defendant also omitted or
concealed material facts and failed to correct prior misrepresentations and omissions about the
risks and benefits of opioids. Each Defendant’s omissions rendered even their seemingly truthful
statements about opioids deceptive.
566. The Defendants’ unlawful and/or intentional actions create a rebuttable
presumption of negligence and negligent misrepresentations under State law.
567. Plaintiff seeks economic losses (direct, incidental, or consequential pecuniary
losses) resulting from the Defendants’ actions and omissions.
568. Plaintiff seeks all legal and equitable relief as allowed by law, other than such
damages disavowed herein, including inter alia injunctive relief, restitution, disgorgement of
profits, compensatory and punitive damages, and all damages allowed by law to be paid by the
Defendants, attorney fees and costs, and pre- and post-judgment interest.
COUNT VI
NEGLIGENCE PER SE
(Against All Defendants)
569. Plaintiff incorporates by reference all other paragraphs of this Complaint as if fully
set forth here, and further alleges as follows.
570. Wisconsin law recognizes the doctrine of negligence per se: “When a statute
provides that under certain circumstances particular acts shall or shall not be done, it may be
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 interpreted as fixing a standard . . . from which it is negligence to deviate.” Bennett v. Larsen
Co., 118 Wis. 2d 681, 693–94, 348 N.W.2d 540, 548–49 (1984) (quoting Prosser on Torts sec.
36 at 190 and citing Restatement (Second) of Torts sec. 285 (1965)).
571. Violations of statutes and regulations support a cause of action for negligence per
se where the plaintiff is within the class of persons the statute was designed to protect, the harm
sustained is the type sought to be prevented and there is legislative intent that the statute become
a basis for the imposition of civil liability. Antwaun A.ex. rel. Muwonge v. Heritage Mut. Ins.
Co., 228 Wis. 2d 44, 66-67, 596 N.W.2d 456, 466 (Wis. 1999) (citing Tatur v. Solsrund, 174
Wis. 2d 735, 743, 498 N.E.2d 232 (Wis. 1993)).
572. Defendants were required under Wisconsin law to be licensed by the Wisconsin
Pharmacy Examining Board. Wis. Stat. Ann. § 450.071(1). See also Wis. Stat. Ann. § 961.31;
Wis. Admin. Code §§ Phar 13.01 et seq.
573. Wisconsin’s minimum requirement for controlled substance manufacture and
wholesale drug distribution is that they must comply with “applicable federal, state, and local
laws and regulations.” Wis. Admin. Code § Phar 13.17(1). See also Wis. Stat. Ann. §
450.10(1)(a)(2); Wis. Admin. Code § Phar 13.17(2); Wis. Admin. Code § Phar 8.02(2); Wis.
Admin. Code § Phar 12.05.
574. The Pharmacy Examining Board makes a determination of what is in the interest of
public health and safety when it decides whether to register manufacturers and distributors of
controlled substances. Wis. Admin. Code § Phar 13.06(8).
575. The Wisconsin Pharmacy Examining Board may deny, revoke or suspend a license
to manufacture or distribute a controlled substance if licensee has “[e]ngaged in unprofessional
conduct.” Wis. Stat. Ann. § 450.10(1)(b)(1). Unprofessional conduct includes, inter alia, making

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 material false statements “or giving materially false information in connection with an
application for a license[.]” Wis. Stat. Ann. § 450.10(1)(a)(1).
576. Federal and Wisconsin laws and regulations require Defendants to act as
gatekeepers guarding against the diversion of the highly addictive, dangerous opioid drugs. See,
e.g., Wis. Admin. Code §§ Phar 13.10(5); 13.02(8); 13.15.
577. The federal mandates incorporated into Wisconsin law require that Defendants
must maintain “effective control against diversion of particular controlled substances into other
than legitimate medical, scientific, and industrial channels.” 21 U.S.C. §§ 823(a)(1), (b)(1).
These federal regulations impose a non-delegable duty upon both manufacturers and distributors
to “design and operate a system to disclose to the registrant suspicious orders of controlled
substances. The registrant [distributor or manufacturer] shall inform the Field Division Office of
the Administration in his area of suspicious orders when discovered by the registrant. Suspicious
orders include orders of unusual size, orders deviating substantially from a normal pattern, and
orders of unusual frequency.” 21 C.F.R. § 1301.74(b).
578. In addition to reporting all suspicious orders, distributors must also stop shipment
on any order which is flagged as suspicious and only ship orders which were flagged as
potentially suspicious if, after conducting due diligence, the distributor can determine that the
order is not likely to be diverted into illegal channels. See Southwood Pharm., Inc., 72 Fed. Reg.
36,487, 36,501 (Drug Enf’t Admin. July 3, 2007); Masters Pharm., Inc. v. Drug Enf’t Admin.,
861 F.3d 206 (D.C. Cir. 2017). Regardless, all flagged orders must be reported. Id.
579. Defendants violated section 961.41 of the Wisconsin Uniform Controlled
Substances Act, which provides that, “Except as authorized by this chapter, it is unlawful for any

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 person any person to manufacture, distribute or deliver a controlled substance.” Wis. Stat. Ann. §
961.41(1).
580. Defendants’ actions were not “authorized” by the Wisconsin Uniform Controlled
Substances Act because Defendants did not comply with the mandatory terms of the licenses
issued to them by the Wisconsin Pharmacy Examining Board or with federal requirements
incorporated by reference, as further detailed in this Complaint.
581. Defendants also violated section 961.42 of the Wisconsin Uniform Controlled
Substances Act, which provides that, “It is unlawful for any person knowingly to keep or
maintain any . . . warehouse, . . . building, . . . or other structure or place, . . . which is used for
manufacturing, keeping or delivering [controlled substances] in violation of this chapter.” Wis.
Stat. Ann. § 961.42(1).
582. Defendants also violated section 961.43 of the Wisconsin Uniform Controlled
Substances Act, which provides that it is unlawful for any person to “acquire or obtain
possession of a controlled substance by misrepresentation, fraud, forgery, deception or
subterfuge.” Wis. Stat. Ann. § 961.43(1)(a).
583. Defendants also violated regulations promulgated by the Wisconsin Pharmacy
Examining Board by violating the requirements for distributors to receive a license, including,
inter alia, reporting all suspicious orders (Wis. Admin. Code § Phar 8.10) and complying with
“applicable federal, state, and local laws and regulations.” Wis. Admin. Code § Phar 13.17(1).
584. Section 961.53 of the Wisconsin Uniform Controlled Substances Act provides that
“Violations of this chapter constitute public nuisances under ch. 823, irrespective of any criminal
prosecutions which may be or are commenced based on the same acts.” Wis. Stat. Ann. § 961.53.
The Wisconsin Legislature expressly contemplated that violations of the Wisconsin Uniform

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 Controlled Substances Act would become a basis for the imposition of civil liability, because
section 961.53 expressly states that these violations constitute a nuisance under Chapter 823 of
the Wisconsin Statutes, which authorizes civil actions by persons injured by nuisances.
585. The Wisconsin Uniform Controlled Substances Act further provides that “[a]ny
penalty imposed for violation of this chapter is in addition to, and not in lieu of, any civil or
administrative penalty or sanction otherwise authorized by law.” Wis. Stat. Ann. § 961.44.
586. The Wisconsin Legislature authorized the Wisconsin Pharmacy Examining Board
to specify through regulations precisely how the manufacturers and distributors were to comply
with the Wisconsin Uniform Controlled Substances Act. See Wis. Stat. Ann. § 961.31. The
Legislature also has found that “the abuse of controlled substances constitutes a serious problem
for society” that the “manufacture, distribution, delivery, possession and use of controlled
substances for other than legitimate purposes have a substantial and detrimental effect on the
health and general welfare of the people of this state.” Wis. Stat. § 961.001 and Wis. Stat. §
961.001(1m). Thus, violations of the rules implementing the Wisconsin Uniform Controlled
Substances Act, to the extent that they were intended to protect public safety, are a basis for the
imposition of civil liability under Wisconsin law.
587. Plaintiff is within the class intended to be protected by the public safety statutes
and regulations concerning controlled substances.
588. Defendants’ violations of these public safety laws are prima facie evidence of
negligence per se. Each Defendant had a duty under inter alia these laws to maintain effective
controls against diversion of prescription opioids and to guard against, prevent, and report
suspicious orders of opioids. Defendants’ violations of the law constitute negligence per se.

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 Defendants breached mandatory, non-delegable legal duties and did not act reasonably under the
circumstances.
589. As described above in allegations expressly incorporated herein, Defendants
breached their duties to maintain effective controls against diversion of dangerously addictive
opioids, including violating public safety statutes and regulations requiring that as wholesale
drug distributors, Defendants could only distribute these dangerous drugs under a closed system
– a system Defendants were responsible for guarding.
590. As described above in allegations expressly incorporated herein, Defendants’
breach of statutory and regulatory duties caused, bears a causal connection with, is and was a
substantial factor contributing to, and/or proximately resulted in, harm and damages to Plaintiff.
591. The injuries and damages sustained are those which the Wisconsin statutes and
regulations were designed to prevent.
592. Defendants’ violations of the Wisconsin statutes and public safety regulations cited
herein were and are substantial factors in the injuries and damages sustained.
593. It was foreseeable that Defendants’ breaches of statutory and regulatory duties
described herein would result in the damages sustained.
594. Plaintiff seeks economic losses (direct, incidental, or consequential pecuniary
losses) resulting from Defendants’ negligence per se. Plaintiff does not seek damages for
physical, personal injury or any physical damage to property caused by Defendants’ actions.
595. Plaintiff seeks all legal and equitable relief as allowed by law, except as expressly
disavowed herein, including inter alia injunctive relief, restitution, disgorgement of profits,
compensatory and punitive damages, and all damages allowed by law to be paid by the
Defendants, attorneys’ fees and costs, and pre- and post-judgment interest.

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 COUNT VII
FRAUD AND FRAUDULENT MISREPRESENTATION
(Against All Defendants)
596. Plaintiff incorporates by reference all other paragraphs of this Complaint as if fully
set forth here, and further alleges as follows.
597. In Wisconsin, the tort of fraud or intentional misrepresentation has five elements:
1) the defendant must have made a representation of fact to the plaintiff; 2) the representation of
fact must be false; and 3) the plaintiff must have believed and relied on the misrepresentation to
his detriment or damage. Intentional misrepresentation “carries the following additional
elements: 4) the defendant must have made the misrepresentation with knowledge that it was
false or recklessly without caring whether it was true or false; and 5) the defendant must have
made the misrepresentation with intent to deceive and to induce the plaintiff to act on it to his
detriment or damage.” Tietsworth v. Harley-Davidson, Inc., 270 Wis. 2d 146, 157, 677 N.W.2d
233, 239 (citing Ollerman v. O'Rourke Co., 94 Wis. 2d 17, 24-25, 288 N.W.2d 95, 99 (1980)).
598. Defendants violated their general duty not to actively deceive, have made
knowingly false statements and have omitted and/or concealed information which made
statements Defendants did make knowingly false. Defendants acted intentionally and/or
unlawfully.
599. As alleged herein, Defendants made false statements regarding their compliance
with state and federal law regarding their duties to prevent diversion, their duties to monitor,
report and halt suspicious orders, and/or concealed their noncompliance with these requirements.
600. As alleged herein, the Manufacturer Defendants engaged in false representations
and concealments of material fact regarding the use of opioids to treat chronic, non-cancer pain.
601. As alleged herein, the Defendants knowingly and/or intentionally made
representations that were false. Defendants had a duty to disclose material facts and concealed
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 them. These false representations and concealed facts were material to the conduct and actions at
issue. Defendants made these false representations and concealed facts with knowledge of the
falsity of their representations, and did so with the intent of misleading Plaintiff, Plaintiff’s
Community, the public, and persons on whom Plaintiff relied.
602. These false representations and concealments were reasonably calculated to
deceive Plaintiff, Plaintiff’s Community, and the physicians who prescribed opioids for persons
in Plaintiff’s Community, were made with the intent to deceive, and did in fact deceive these
persons, Plaintiff, and Plaintiff’s Community.
603. Plaintiff, Plaintiff’s Community, and the physicians who prescribed opioids
reasonably relied on these false representations and concealments of material fact.
604. Plaintiff justifiably relied on Defendants’ representations and/or concealments, both
directly and indirectly. Plaintiff’s injuries were proximately caused by this reliance.
605. The injuries alleged by Plaintiff herein were sustained as a direct and proximate
cause of the Defendants’ fraudulent conduct.
606. Plaintiff seeks economic losses (direct, incidental, or consequential pecuniary
losses) resulting from Defendants’ fraudulent activity, including fraudulent misrepresentations
and fraudulent concealment.
607. Plaintiff seeks all legal and equitable relief as allowed by law, except as expressly
disavowed herein, including inter alia injunctive relief, restitution, disgorgement of profits,
compensatory damages and punitive damages, and all damages allowed by law to be paid by the
Defendants, attorney fees and costs, and pre- and post-judgment interest.

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 COUNT VIII
UNJUST ENRICHMENT
(Against All Defendants)
608. Plaintiff incorporates by reference all other paragraphs of this Complaint as if fully
set forth here, and further alleges as follows.
609. Defendants have unjustly retained a benefit to Plaintiff’s detriment, and the
Defendants’ retention of the benefit violates the fundamental principles of justice, equity, and
good conscience.
610. By illegally and deceptively promoting opioids to treat chronic pain, directly
through their control of third parties, and by acting in concert with third parties, Defendants have
unjustly enriched themselves at Plaintiff’s expense. Plaintiff has made payments for opioid
prescriptions, and Defendants benefitted from those payments. Because of their deceptive
promotion of opioids, Defendants obtained enrichment they would not otherwise have obtained.
The enrichment was without justification and Plaintiff lacks a remedy provided by law.
611. By reason of Defendants unlawful acts, Plaintiff has been damaged and continues
to be damaged, in a substantial amount to be determined at trial.
612. Plaintiff seeks all legal and equitable relief as allowed by law, except as expressly
disavowed herein, including inter alia injunctive relief, restitution, disgorgement of profits,
compensatory and punitive damages, and all damages allowed by law to be paid by the
Defendants, attorney fees and costs, and pre- and post-judgment interest.
PUNITIVE DAMAGES
613. Plaintiff incorporates by reference all other paragraphs of this Complaint as if fully
set forth herein, and further alleges as follows.
614. By engaging in the above-described intentional and/or unlawful acts or practices,
Defendants acted maliciously towards Plaintiff and with an intentional disregard of the Plaintiff’s
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 rights. Defendants acted with conscious disregard for the rights of others and/or in a reckless,
wanton, willful or grossly negligent manner. Defendants acted with a prolonged intentional
disregard to the adverse consequences of their actions and/or omissions. Defendants acted with a
conscious disregard for the rights and safety of others in a manner that had a great probability of
causing substantial harm. Defendants acted toward the Plaintiff with malice and were grossly
negligent in failing to perform the duties and obligations imposed upon them under applicable
federal and state statutes and common law.
615. Defendants were selling and/or manufacturing dangerous drugs statutorily
categorized as posing a high potential for abuse and severe dependence. Thus, Defendants
knowingly traded in drugs that presented a high degree of danger if prescribed incorrectly or
diverted to other than legitimate medical, scientific or industrial channels. Because of the severe
level of danger posed by, and indeed visited upon the State and Plaintiff’s Community by, these
dangerous drugs, Defendants owed a high duty of care to ensure that these drugs were only used
for proper medical purposes. Defendants chose profit over prudence and the safety of the
community, and an award of punitive damages is appropriate as punishment and a deterrence.
Punitive damages should be awarded pursuant to the common law and Wis. Stat. Ann.
§ 895.043.

616. By engaging in the above-described wrongful conduct, Defendants also engaged in

willful misconduct and gross negligence and exhibited an entire want of care that would raise the
presumption of a conscious indifference to consequences.
RELIEF
WHEREFORE, the Plaintiff respectfully prays that this Court grant the following relief:
617. Entering Judgment in favor of the Plaintiff in a final order against each of the
Defendants;
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 618. Enjoining the Defendants and their employees, officers, directors, agents,
successors, assignees, merged or acquired predecessors, parent or controlling entities,
subsidiaries, and all other persons acting in concert or participation with it, from engaging in
unfair or deceptive practices in violation of law and ordering temporary, preliminary or
permanent injunction;
619. Order that Defendants compensate the Plaintiff for past and future costs to abate the
ongoing public nuisance caused by the opioid epidemic, including restitution;
620. Order Defendants to fund an “abatement fund” for the purposes of abating the
opioid nuisance;
621. Awarding actual damages, treble damages, injunctive and equitable relief,
forfeiture as deemed proper by the Court, and attorney fees and all costs and expenses of suit
pursuant to Plaintiff’s racketeering claims;
622. Awarding the Plaintiff the damages caused by the opioid epidemic, including (A)
costs for providing medical care, additional therapeutic and prescription drug purchases, and
other treatments for patients suffering from opioid-related addiction or disease, including
overdoses and deaths; (B) costs for providing treatment, counseling, and rehabilitation services;
(C) costs for providing treatment of infants born with opioid-related medical conditions; (D)
costs for providing care for children whose parents suffer from opioid-related disability or
incapacitation; and (E) costs associated with law enforcement and public safety relating to the
opioid epidemic.
623. Enter a judgment against the Defendants requiring Defendants to pay punitive
damages;
624. Granting the Plaintiff

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 1. The cost of investigation, reasonable attorneys’ fees, and all costs and expenses;
2. Pre-judgment and post-judgment interest; and,
3. All other relief as provided by law and/or as the Court deems appropriate and just.
Dated: March 14, 2018

Respectfully Submitted,
MILWAUKEE COUNTY, WISCONSIN,
Plaintiff

Margaret Daun
Corporation Counsel
Milwaukee County
901 N. 9th Street
Milwaukee, WI 53233
Tel: 414-278-4315
Margaret.Daun@milwaukeecountywi.gov

By: /s/ K. Scott Wagner
K. Scott Wagner
Andrew Frank
KERKMAN, WAGNER & DUNN
839 N. Jefferson St. Ste. 400A
Milwaukee, Wisconsin 53202
Tel: 414-277-8200
swagner@kwdlaw.com

Nelson Phillips
Emery Harlan
MWH LAW GROUP LLP
735 N. Water St., Ste 610
Milwaukee, WI 53202
Tel: 414-509-7489
Fax: 414-436-0354
nelson.phillips@mwhlawgroup.com

J. Burton LeBlanc, IV
BARON & BUDD, P.C.
3102 Oak Lawn Avenue, Suite 1100
Dallas, TX 75219
Tel.: 214-521-3605
Fax: 214-520-1181
bleblanc@baronbudd.com
James C. Peterson
HILL, PETERSON, CARPER,
BEE & DEITZLER, PLLC
NorthGate Business Park
500 Tracy Way
Charleston, WV 25311
Tel.: 304-345-5667
Fax: 304-345-1519
jcpeterson@hpcbd.com

Paul J. Scoptur
AIKEN & SCOPTUR S.C.
2600 N. Mayfair Rd., Suite 1030
Wauwatosa, WI 53226
Tel: 414-225-0260
paul@aikenandscoptur.com
Peter J. Mougey
Archie C. Lamb, Jr.
LEVIN, PAPANTONIO, THOMAS, MITCHELL,
RAFFERTY & PROCTOR, P.A.
316 S. Baylen Street, Suite 600
Pensacola, FL 32502-5996
Tel.: 850-435-7068
Fax: 850-436-6068
pmougey@levinlaw.com

Anthony J. Majestro
POWELL & MAJESTRO, PLLC
405 Capitol Street, Suite P-1200
Charleston, WV 25301
Tel.: 304-346-2889
Fax: 304-346-2895
amajestro@powellmajestro.com

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 Michael J. Fuller, Jr.
Amy Quezon
MCHUGH FULLER LAW GROUP, PLLC
97 Elias Whiddon Rd.
Hattiesburg, MS 39402
Tel.: 601-261-2220
Fax: 601-261-2481
mike@mchughfuller.com
amy@mchughfuller.com

Paul T. Farrell, Jr.
GREENE, KETCHUM, FARRELL,
BAILEY & TWEEL, LLP
419 - 11th Street (25701)/ P.O. Box 2389
Huntington, West Virginia 25724-2389
Tel.: 800-479-0053 or 304-525-9115
Fax: 304-529-3284
paul@greeneketchum.com

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