INDEX NO. 400016/2018 FILED: SUFFOLK COUNTY CLERK 04/11/2019 11:19 AM NYSCEF DOC. NO. 19 RECEIVED NYSCEF: 04/11/2019 V ersi o n D at e d A pr. 1 0, 2 0 1 9 wit h C ert ai n R e d a cti o ns R e m o v e d P er P arti es' A gr e e m e nt S UP RE ME C O U RT OF T HE ST ATE OF NE W Y O R K C O U NT Y OF S UFF OL K ------------------------------------------------------------------ x T H E P E O P L E O F T H E S T A T E O F N E W Y O R K, : b y L etiti a J a m es, Att or n e y G e n er al of t h e St at e of : N e w Y or k , : : Pl ai ntiff, : : - a g ai nst: : P U R D U E P H A R M A L. P., P U R D U E P H A R M A : : I N C., T H E P U R D U E F R E D E RI C K C O M P A N Y, I N C., T H E P. F. L A B O R A T O RI E S, I N C., P U R D U E : : H O L DI N G S L. P., R O S E B A Y M E DI C A L C O M P A N Y L. P. , T H E B E A C O N C O M P A N Y, P L P : : A S S O CI A T E S H O L DI N G S, L. P., D O E E N TI TI E S : 1 - 1 0, RI C H A R D S. S A C K L E R, J O N A T H A N D. : S A C K L E R, M O R TI M E R D. A. S A C K L E R, K A T H E : A. S A C K L E R, I L E N E S A C K L E R L E F C O U R T, : D A VI D A. S A C K L E R , B E V E R L Y S A C K L E R, : T H E R E S A S A C K L E R, J O H N S O N & J O H N S O N, : J A N S S E N P H A R M A C E U TI C A L S, I N C., O R T H O - : M C N EI L -J A N S S E N P H A R M A C E U TI C A L S, I N C ., : : J A N S S E N P H A R M A C E U TI C A, I N C., : M A L LI N C K R O D T P L C, M A L LI N C K R O D T L L C, : S P E C G X L L C, E N D O I N T E R N A TI O N A L P L C, : E N D O H E A L T H S O L U TI O N S I N C., E N D O : P H A R M A C E U TI C A L S, I N C., P A R : P H A R M A C E U TI C A L, I N C., P A R : P H A R M A C E U TI C A L C O M P A NI E S, I N C., T E V A : P H A R M A C E U TI C A L I N D U S T RI E S LI MI T E D, : T E V A P H A R M A C E U TI C A L S U S A, I N C., : C E P H A L O N, I N C., A L L E R G A N P L C, A L L E R G A N : FI N A N C E, L L C, A C T A VI S P H A R M A, I N C., : A C T A VI S L L C, W A T S O N L A B O R A T O RI E S, : I N C., M C K E S S O N C O R P O R A TI O N, C A R DI N A L : H E A L T H, I N C., A M E RI S O U R C E B E R G E N D R U G : : C O R P O R A TI O N , R O C H E S T E R D R U G : C O O P E R A TI V E, I N C. , : D ef e n d a nts. : ------------------------------------------------------------------x 1 of 258 FI R S T A M E N D E D C O M P L AI N T I n d e x No.: 4 0 0 0 1 6/ 2 0 1 8 INDEX NO. 400016/2018 FILED: SUFFOLK COUNTY CLERK 04/11/2019 11:19 AM NYSCEF DOC. NO. 19 RECEIVED NYSCEF: 04/11/2019 V ersi o n D at e d A pr. 1 0, 2 0 1 9 wit h C ert ai n R e d a cti o ns R e m o v e d P er P arti es' A gr e e m e nt T A B L E OF C O N T E N TS I N T R O D U C TI O N .......................................................................................................................... 1 J U RI S DI C TI O N A N D V E N U E ................................................................................................... 1 3 P A R TI E S ...................................................................................................................................... 1 4 Pl ai ntiff ..................................................................................................................................... 1 4 D ef e n d a nts ................................................................................................................................ 1 4 A. T h e M a n uf a ct ur er D ef e n d a nts ...................................................................................... 1 4 B. T h e Distri b ut or D ef e n d a nts ........................................................................................... 2 2 C. D ef e n d a nts’ A g e nts, S u c c ess ors, a n d P ar e nt - S u bsi di ar y R el ati o ns hi ps ....................... 2 4 F A C T S .......................................................................................................................................... 2 6 I. D ef e n d a nts’ C oll e cti v e P att er n of Mis c o n d u ct t h at S p ar k e d, S pr e a d, a n d S ust ai n e d t h e O pi oi d E pi d e mi c i n N e w Y or k ................................................................................................. 2 6 A. T h e Ori gi n al C o ns e ns us: O pi oi ds ar e P o w erf ul Dr u gs wit h N arr o w M e di c al Us es T h at P os e D a n g er o usl y Hi g h Ris ks of A b us e a n d D e p e n d e n c e .................................................... 2 6 B. Li g hti n g t h e Fir e of a n E pi d e mi c: A S m all Dr u g M a n uf a ct ur er B ets o n E x p a n di n g t h e M ar k et f or O pi oi ds t o S a v e its C or p or at e F ut ur e .................................................................. 2 9 C. T hr o u g h t h e L o o ki n g Gl ass: T h e M a n uf a ct ur er D ef e n d a nts’ C a m p ai g n t o R e v ers e t h e P e r c e pti o n of O pi oi ds ........................................................................................................... 3 0 D. T h e M a n uf a ct ur er D ef e n d a nts’ C at al o g of D e c e pti o n .................................................. 3 2 1. Misr e pr es e nt ati o n # 1: T h e Ris k of A d di cti o n fr o m C hr o ni c O pi oi d T h er a p y is L o w.. .................................................................................................................................. 3 2 2. Misr e pr es e nt ati o n # 2: Si g ns of A d di cti v e B e h a vi or ar e “ Ps e u d o a d di cti o n, ” P ot e nti all y R e q uiri n g M or e O pi oi ds ................................................................................. 3 4 3. Misr e pr es e nt ati o n # 3: T h e Ris k of A d di cti o n C a n B e E asil y I d e ntifi e d a n d M a n a g e d ................................................................................................................................... 3 6 4. Misr e pr es e nt ati o n # 4: O pi oi d Wit h dr a w al C a n B e A v oi d e d b y T a p eri n g ............... 3 7 5. Misr e pr es e nt ati o n # 5: O pi oi d D o s es C a n B e I n cr e as e d wit h o ut Li mits or Gr e at er Ris ks .................................................................................................................................. 3 7 6. Misr e pr es e nt ati o n # 6: L o n g - T er m O pi oi d Us e I m pr o v es F u n cti o ni n g .................... 3 8 7. Misr e pr es e nt ati o n # 7: Alt er n ati v e F or ms of P ai n R eli ef P os e Gr e at er Ris ks t h a n O pi oi ds .............................................................................................................................. 4 1 8. Misr e pr es e nt ati o n # 8: E xt e n d e d- R el e as e Dr u gs Pr o vi d e T w el v e or M or e H o urs of P ai n R eli ef ......................................................................................................................... 4 3 9. Misr e pr es e nt ati o n # 9: N e wl y - D e v el o p e d b ut M or e E x p e nsi v e F or m ul ati o ns of O pi oi ds S u c c essf ull y D et er A b us e .................................................................................... 4 4 ii 2 of 258 INDEX NO. 400016/2018 FILED: SUFFOLK COUNTY CLERK 04/11/2019 11:19 AM NYSCEF DOC. NO. 19 RECEIVED NYSCEF: 04/11/2019 V ersi o n D at e d A pr. 1 0, 2 0 1 9 wit h C ert ai n R e d a cti o ns R e m o v e d P er P arti es' A gr e e m e nt 3 of 258 INDEX NO. 400016/2018 FILED: SUFFOLK COUNTY CLERK 04/11/2019 11:19 AM NYSCEF DOC. NO. 19 RECEIVED NYSCEF: 04/11/2019 V ersi o n D at e d A pr. 1 0, 2 0 1 9 wit h C ert ai n R e d a cti o ns R e m o v e d P er P arti es' A gr e e m e nt 4 of 258 INDEX NO. 400016/2018 FILED: SUFFOLK COUNTY CLERK 04/11/2019 11:19 AM NYSCEF DOC. NO. 19 RECEIVED NYSCEF: 04/11/2019 V ersi o n D at e d A pr. 1 0, 2 0 1 9 wit h C ert ai n R e d a cti o ns R e m o v e d P er P arti es' A gr e e m e nt 5 of 258 INDEX NO. 400016/2018 FILED: SUFFOLK COUNTY CLERK 04/11/2019 11:19 AM NYSCEF DOC. NO. 19 RECEIVED NYSCEF: 04/11/2019 V ersi o n D at e d A pr. 1 0, 2 0 1 9 wit h C ert ai n R e d a cti o ns R e m o v e d P er P arti es' A gr e e m e nt 6 of 258 INDEX NO. 400016/2018 FILED: SUFFOLK COUNTY CLERK 04/11/2019 11:19 AM NYSCEF DOC. NO. 19 RECEIVED NYSCEF: 04/11/2019 V ersi o n D at e d A pr. 1 0, 2 0 1 9 wit h C ert ai n R e d a cti o ns R e m o v e d P er P arti es' A gr e e m e nt FI F T H C A U S E O F A C TI O N ..................................................................................................... 2 3 9 SI X T H C A U S E O F A C TI O N .................................................................................................... 2 3 9 S E V E N T H C A U S E O F A C TI O N .............................................................................................. 2 4 0 EI G H T H C A U S E O F A C TI O N ................................................................................................. 2 4 1 NI N T H C A U S E O F A C TI O N .................................................................................................... 2 4 1 T E N T H C A U S E O F A C TI O N ................................................................................................... 2 4 2 E L E V E N T H C A U S E O F A C TI O N ........................................................................................... 2 4 3 T W E L F T H C A U S E O F A C TI O N .............................................................................................. 2 4 4 T HI R T E E N T H C A U S E O F A C TI O N ....................................................................................... 2 4 4 F O U R T E E N T H C A U S E O F A C TI O N ...................................................................................... 2 4 5 FI F T E E N T H C A U S E O F A C TI O N ........................................................................................... 2 4 5 SI X T E E N T H C A U S E O F A C TI O N .......................................................................................... 2 4 6 S E V E N T E E N T H C A U S E O F A C TI O N .................................................................................... 2 4 7 P R A Y E R F O R R E LI E F ............................................................................................................. 2 4 9 vii 7 of 258 INDEX NO. 400016/2018 FILED: SUFFOLK COUNTY CLERK 04/11/2019 11:19 AM NYSCEF DOC. NO. 19 RECEIVED NYSCEF: 04/11/2019 V ersi o n D at e d A pr. 1 0, 2 0 1 9 wit h C ert ai n R e d a cti o ns R e m o v e d P er P arti es' A gr e e m e nt Pl ai ntiff , Th e P e o pl e of t h e St at e of N e w Y or k (t h e “ St at e ”), t hr o u g h its att or n e y, L etiti a J a m es, Att or n e y G e n er al of t h e St at e of N e w Y or k, a ll e g es t h e f oll o wi n g, wit h p ers o n al k n o wl e d g e of t h e a cti o ns of t h e Offi c e of t h e Att or n e y G e n er al ( “ O A G ”) a n d u p o n i nf or m ati o n a n d b eli ef as t o t h e a cti o n of ot h ers: I N T R O D U C TI O N 1. N e w Y or k St at e is i n t h e t hr o es of a n o pi oi d 1 e pi d e mi c t h at h as r a v a g e d t h e li v es of its r esi d e nts a n d dr ai n e d its p u bli c c off ers f or m or e t h a n t w o d e c a d es. T his st at e wi d e c at astr o p h e h a p p e n e d b e c a us e t h e D ef e n d a nts i n t his c as e — t h e dr u g m a n uf a ct ur ers a n d distri b ut ors e ntr ust e d u n d er N e w Y or k l a w wit h criti c a l r ol es i n pr e v e nti n g t h e mis us e a n d di v ersi o n of c o ntr oll e d s u bst a n c es— d eli b er at el y b etr a y e d t h os e d uti es t hr o u g h a p ersist e nt c o urs e of fr a u d ul e nt a n d ill e g al mis c o n d u ct, i n or d er t o pr ofit e er fr o m t h e pl a g u e t h e y k n e w w o ul d b e u nl e as h e d. Pl ai ntiff bri n gs t his l a ws uit t o c o m p el t h es e u nr e p e nt a nt c ul prits t o a b at e t h e d a n g ers p os e d b y t h e e n d uri n g p u bli c n uis a n c e t h e y g e n er at e d , e nj oi n t h e o n g oi n g t hr e ats p os e d b y t h eir c o nti n ui n g mis c o n d u ct, a n d h ol d t h e m a c c o u nt a b l e i n l a w a n d e q uit y f or t h e d e v ast ati o n t h e y h a v e i nfli ct e d o n t h e St at e a n d its r esi d e nts. 2. E a c h d a y, m or e t h a n 1 3 0 p e o pl e i n t h e U nit e d St at es , a n d a b o ut ni n e w h o li v e i n N e w Y or k , di e as a r es ult of o pi oi d- r el at e d o v er d os es . T h es e p e o pl e ar e n ot— a n d c a n n ot b e c o m e — j ust st atisti cs. T h e y ar e o ur f a mil y, o ur fri e n ds, our n ei g h b ors. T h e y ar e o ur f at h ers a n d o ur s o ns , o ur m ot h ers a n d o ur d a u g ht ers . T h e y h a v e r e al n a m es a n d t h eir d e at hs h a v e l eft r e al, j a g g e d h ol es i n t h e f a bri c of t h e c o m m u niti es w h er e t h e y us e d t o li v e. As us e d h er ei n, “ o pi oi d(s) ” r ef ers t o t h e e ntir e cl ass of p o w erf ul n ar c oti c p ai n kill ers d eri v e d fr o m o pi u m or t h at mi mi c its eff e cts, i n cl u di n g ol d er, m ostl y n o n -s y nt h eti c dr u gs li k e c o d ei n e, m or p hi n e, a n d h er oi n t h at s o m e s o ur c es s e p ar at el y cl assif y as “ o pi at es, ” as w ell as n e w er, m ostl y -s y nt h eti c dr u gs li k e o x y c o d o n e, h y dr o c o d o n e a n d f e nt a n yl t h at t h os e s o ur c es m a y disti n g uis h as “ o pi oi ds. ” 1 1 8 of 258 INDEX NO. 400016/2018 FILED: SUFFOLK COUNTY CLERK 04/11/2019 11:19 AM NYSCEF DOC. NO. 19 RECEIVED NYSCEF: 04/11/2019 V ersi o n D at e d A pr. 1 0, 2 0 1 9 wit h C ert ai n R e d a cti o ns R e m o v e d P er P arti es' A gr e e m e nt 3. T h e y ar e r e al p e o pl e, li k e S ai g e D e c e m b er E arl e y, of C a z e n o vi a , N e w Y or k, p o p ul ati o n 2, 8 3 5. S h e w as p r es cri b e d o pi oi ds b y t h e d e ntist w h o e xtr a ct e d h er wis d o m t e et h i n s pri n g 2 0 1 7. W h e n t h e pr es cri pti o n, b ut n ot t h e d e p e n d e n c e it h a d l eft h er wit h, h a d e n d e d, s h e t ur n e d t o th e str e ets, a n d h er oi n — a b a n d o ni n g h er t w o -y e ar -ol d s o n t o his gr a n d p ar e nts. A y e ar l at er, aft er c o m mitti n g t o r e c o v er y, S ai g e r et ur n e d h o m e, d et er mi n e d t o st a y s o b er a n d c ar e f or h er c hil d . S h e r e ki n dl e d h er p assi o n f or d a n c e, m usi c, a n d art, a n d r e c o n n e ct e d wit h h er m ot h er o v er h o m e m a d e p e a n ut b utt er c o o ki es a n d l at e -ni g ht m o vi es. B ut aft er a fri e n d di e d fr o m a n o v er d os e, s h e r el a ps e d. K n o wi n g s h e w as i n crisis, s h e b o o k e d h ers elf i nt o a tr e at m e nt f a cilit y i n C alif or ni a. S h e n e v er m a d e it. S h e di e d in a b at hr o o m st all at t h e S yr a c u s e air p ort t er mi n al wit h a n e e dl e i n h er ar m, a n d h er b o ar di n g p a ss i n h er h a n d. [ S ai g e] n e e d e d t o r u n. B ut s h e al w a ys w a nt e d t o r et ur n, t o m a k e us l a u g h, t o l o v e h er b a b y, t o s h o w us t his cr u el y et f as ci n ati n g w orl d t hr o u g h h er e y es. S h e r a n a g ai n l ast w e e k e n d …. j ust a littl e t o o f ar t his ti m e. S h e l eft a tri b e t h at l o v e d h er a n d t h at tri b e will k e e p h er m e m or y a n d s pirit ali v e as w e c ar e f or h er s o n. S ai g e D e c e m b er E arl e y w as 2 3 y e ars ol d .2 4. T h es e i n di vi d u al st ori es a d d u p t o a t erri bl e t oll. Si n c e 1 9 9 9, t h e s c o ur g e of o pi oi d a d di cti o n u nl e as h e d b y t h e Def e n d a nts i n t his a cti o n h as t a k e n n e arl y 4 0 0, 0 0 0 li v es:3 S ai g e D e c e m b er E arl e y O bit u ar y , S yr a c us e P ost St a n d ar d, S e pt. 1 9, 2 0 1 8, a v ail a bl e at htt p:// o bits.s yr a c us e. c o m/ o bit u ari es/s yr a c us e/ o bit u ar y. as p x ? n =s ai g e -d e c e m b er e arl e y & pi d = 1 9 0 2 6 5 5 6 4 &f hi d = 2 2 2 0 6. 3 U n d erst a n di n g t h e E pi d e mi c , Ctrs. f or Dis e as e C o ntr ol a n d Pr e v e nti o n ( D e c. 1 9, 2 0 1 8), htt ps:// w w w. c d c. g o v/ dr u g o v er d os e/ e pi d e mi c/i n d e x ht ml (l ast visit e d M ar. 2 5, 2 0 1 9). 2 2 9 of 258 INDEX NO. 400016/2018 FILED: SUFFOLK COUNTY CLERK 04/11/2019 11:19 AM NYSCEF DOC. NO. 19 RECEIVED NYSCEF: 04/11/2019 V ersi o n D at e d A pr. 1 0, 2 0 1 9 wit h C ert ai n R e d a cti o ns R e m o v e d P er P arti es' A gr e e m e nt 4 S o d e e p a n d wi d e is t h e s w at h c ut b y t h es e c or p or at e wr o n g d o ers t h at f or t h e first ti m e si n c e t h e Sec o n d W orl d W ar, t h e a v er a g e lif e e x p e ct a n c y of a n A m eri c a n h as n o w f all e n— f or t hr e e c o ns e c uti v e y e ars . T h e O ri gi n a n d E x pl osi o n of t h e O pi oi d C risis 5. T h e t a pr o ot of t h e o pi oi d e pi d e mi c is e as y t o i d e ntif y: O x y C o nti n. I n 1 9 9 6, Pur d u e l a u n c h e d its “r e v ol uti o n ar y ” n e w o pi oi d dr u g wit h a n ati o n wi d e m ar k eti n g c a m p ai g n t h at r eli e d o n d e c e pti o n a n d i nsi d er p a y offs t o o v er c o m e a l o n g -est a blis h e d m e di c al u n d erst a n di n g t h at o pi oi ds S e e O pi oi d O v er d os e Crisis , N at’l I nst. o n Dr u g A b us e ( R e v’ d J a n. 2 0 1 9) ( S u p p orti n g D at a D o c u m e nt, i d e ntif yi n g 4 2, 2 4 9 o pi oi d r el at e d d e at hs i n 2 0 1 6, a n d 4 9, 0 6 9 s u c h d e at hs f or 2 0 1 7), htt ps:// w w w. dr u g a b us e. g o v/ dr u gs a b us e/ o pi oi ds/ o pi oi d -o v er d os e -crisis # o n e (l ast visit e d M ar. 2 5, 2 0 1 9) . 4 3 10 of 258 INDEX NO. 400016/2018 FILED: SUFFOLK COUNTY CLERK 04/11/2019 11:19 AM NYSCEF DOC. NO. 19 RECEIVED NYSCEF: 04/11/2019 V ersi o n D at e d A pr. 1 0, 2 0 1 9 wit h C ert ai n R e d a cti o ns R e m o v e d P er P arti es' A gr e e m e nt p os e d a hi g h ris k of a d di cti o n a n d a b us e, a n d s h o ul d o nl y b e pr es cri b e d f or s h ort-t er m a c ut e p ai n, c a n c er, or e n d - of-lif e c ar e. P ur d u e’s c o m p etit ors q ui c kl y f oll o w e d s uit. 6. T o g et h er, t h es e dr u g m a n uf a ct ur ers (t h e “ M a n uf a ct ur er D ef e n d a nts ”) c oll a b or at e d t o f als el y d e n y t h e s eri o us ris ks of o pi oi d a d di cti o n g e n er all y, a n d hi g h -d os e o pi oi d pr es cri pti o ns s p e cifi c all y. At t h e s a m e ti m e, t h e y c r e ate d a n d pr o m ot e d t h e c o n c e pt of “ps e u d o a d di cti o n ” — a m a d e -u p t er m d esi g n e d t o r e-c ast f a mili ar s y m pt o ms of a d di cti o n as si g ns t h at p ati e nts n e e d e d m or e o pi oi d dr u g s. Th e y f als el y cl ai m e d t h at t h eir o pi oi d dr u gs c o ul d b e c o u nt e d o n t o i m pr o v e c hr o ni c p ai n p ati e nts’ f u n cti o n a n d q u alit y of lif e, a n d t h at t h eir e xt e n d e d -r el e as e o pi oi d f or m ul ati o ns w o ul d pr o vi d e eff e cti v e p ai n r eli ef f or 1 2 h o urs, w h e n t h e y k n e w t h er e w as n o s ci e ntifi c s u p p ort f or t h os e cl ai ms. A n d t h e y misl e a di n gl y s u g g est e d t h at ot h er p ai n r eli ef m et h o ds w er e ris ki er t h a n o pi oi ds, w hil e f als el y cl ai mi n g t h at o pi oi d d e p e n d e n c e a n d wit h dr a w al c o ul d b e e asil y m a n a g e d a n d eff e cti v el y pr e v e nt e d wit h u n pr o v e n s cr e e ni n g t o ols a n d m a n a g e m e nt t e c h ni q u es. 7. E a c h M a n uf a ct ur er D ef e n d a nt s p e nt milli o ns of d oll ars o v er t h e f oll o wi n g d e c a d e t o p us h t h es e fr a u d ul e nt m ess a g es . T h e y p us h e d t h eir o w n n a m e-br a n d dr u gs b y “ d et aili n g ” t h eir sal es r e pr es e nt ati v es t o t ar g et s us c e pti bl e d o ct ors wit h i n -p ers o n visits, fl o o di n g m e di c al p u bli c ati o ns wit h d e c e pti v e a d v ertis e m e nts, a n d off eri n g c o ns u m ers dis c o u nt c ar ds t o e nti c e t h e m t o r e q u est tr e at m e nt wit h t h eir pr o d u cts. A n d t h e y c oll a b or at e d t o pr o m ot e t h e o v er all e x p a nsi o n of t h e o pi oi d m ar k et b y s p o ns ori n g misl e a di n g C o nti n ui n g M e di c al E d u c ati o n ( “ C M E ” ) s e mi n ars a n d m a ni p ul ati n g s e e mi n gl y i n d e p e n d e nt or g a ni z ati o ns ( “ F r ont Gr o u ps ”) t h at t h e m a n uf a ct ur ers f u n d e d a n d dis g uis e d as “ u n bi as e d ” s o ur c es of c utti n g-e d g e m e di c al r es e ar c h a n d i nf or m ati o n . B ot h t h e Fr o nt Gr o u ps a n d C M E s e mi n ars d e p e n d e d o n c o - o pt e d d o ct ors —s o-c all e d “ K e y O pi ni o n L e a d ers ” ( “ K O Ls ”) —t h at t h e m a n uf a ct ur ers r e cr uit e d a n d p ai d. 4 11 of 258 INDEX NO. 400016/2018 FILED: SUFFOLK COUNTY CLERK 04/11/2019 11:19 AM NYSCEF DOC. NO. 19 8. RECEIVED NYSCEF: 04/11/2019 V ersi o n D at e d A pr. 1 0, 2 0 1 9 wit h C ert ai n R e d a cti o ns R e m o v e d P er P arti es' A gr e e m e nt T h e s c h e m e w as s p e ct a c ul arl y s u c c essf ul . Fr o m 2 0 0 0 t hr o u g h 2 0 11 , t h e n u m b er of pr es cri pti o ns f or t h e M a n uf a ct ur er D ef e n d a nts’ o pi oi d dr u gs m or e t h a n q u a dr u pl e d n ati o n wi d e, e v e n t h o u g h t h er e w as n o s ci e ntifi c b asi s f or a n y si g nifi c a nt i n cr e as e i n o pi oi d tr e at m e nt as m e di c all y n e c ess ar y or a p pr o pri at e . This s c h e m e w as p arti c ul arl y eff e cti v e i n N e w Y or k, w h er e o pi oi d pr es cri pti o ns r os e ni n ef ol d d uri n g t h e s a m e ti m e p eri o d. 5 9. T his first w a v e of t h e o pi oi d e pi d e mi c c o ul d n ot h a v e cr est e d s o hi g h, h o w e v er, wit h o ut t h e fr a u d, willf ul mis c o n d u ct , a n d/ or gr oss n e gli g e n c e of t h e p h ar m a c e uti c al distri b ut ors n a m e d as d ef e n d a nts i n t his a cti o n (t h e “ Distri b ut or D ef e n d a nts ”), w h o b u y c o ntr oll e d s u bst a n c es i n b ul k fr o m t h e M a n uf a ct ur er D ef e n d a nts a n d t h e n s ell t h e m t o i n di vi d u al p h ar m a ci es a n d ot h er li c e ns e d dis p e ns ers. A R C O S R et ail Dr u g S u m m ar y R e p orts , Dr u g E nf or c e m e nt A d mi n. Di v ersi o n C o ntr ol Di v., htt ps:// w w w. d e a di v ersi o n. us d oj. g o v/ ar c os/r et ail _ dr u g _s u m m ar y (l ast visit e d M ar. 2 5, 2 0 1 9); P o p ul ati o n a n d H o usi n g U nit Esti m at es , U. S. C e ns us B ur e a u, htt ps:// w w w. c e ns us. g o v/ pr o gr a ms-s ur v e ys/ p o p est. ht ml (l ast visit e d M ar. 2 5, 2 0 1 9). 5 5 12 of 258 INDEX NO. 400016/2018 FILED: SUFFOLK COUNTY CLERK 04/11/2019 11:19 AM NYSCEF DOC. NO. 19 RECEIVED NYSCEF: 04/11/2019 V ersi o n D at e d A pr. 1 0, 2 0 1 9 wit h C ert ai n R e d a cti o ns R e m o v e d P er P arti es' A gr e e m e nt 1 0. I n d e e d, b ot h t h e M a n uf a ct ur er D ef e n d a nts a n d t h e Distri b ut or D ef e n d a nts k n e w t h at t h eir i nt er n al c o m pli a n c e s yst e ms w er e t ot all y i n a d e q u at e t o pr o vi d e t h e a nti-di v ersi o n m o nit ori n g f u n cti o n t h at w as ( a n d is) l e g all y r e q uir e d of all c o m p a ni es s elli n g c o ntr oll e d s u bst a n c es i n N e w Y or k. A n d e v e n t h o u g h t h eir c ust o m ers w er e dis pl a yi n g a c o nti n u o us p ar a d e of r e d fl a gs i n di c ati n g ille g al a cti vit y , t h e y c o nti n u e d t o p o ur e n or m o us v ol u m es of o pi oi d dr u gs i nt o t h os e c ust o m ers’ dis p e ns ari es . All t h e w hil e, t h e y li e d t o N e w Y or k r e g ul at ors, b ot h affir m ati v el y a n d b y o missi o n, a b o ut t h es e a n d ot h er vi ol ati o ns of t h e N e w Y or k C o ntr oll e d S u bst a n c e A ct , N. Y. P u bli c H e alt h L a w ( “ P H L ”) § § 3 3 0 0 et s e q. (t h e “N Y C S A ”) , i n or d er t o m ai nt ai n t h eir li c e ns es. 1 1. W hil e t h e M a n uf a ct ur er D ef e n d a nts m a y h a v e i n v e nt e d a n d p er p et u at e d t h e fr a u d ul e nt m ess a gi n g ai m e d at d o ct ors a n d p ati e nts, t h e Distri b ut or D ef e n d a nts w er e t h e o n es t h at j a m m e d o p e n t h e fl o o d g at es, s at ur ati n g t h e St at e’s p h ar m a ci es wit h t h e M a n uf a ct ur er D ef e n d a nts’ o pi oi ds . T his s at ur ati o n e n a bl e d t h e “ pill mill ” pr es cri b ers w h o h a d b e e n st o k e d b y t h e fr a u d ul e nt m ar k eti n g c a m p ai g n t o h a v e m assi v e pr es cri pti o ns f or t h eir a d di ct e d p ati e nts fill e d b y t h e Distri b ut or D ef e n d a nts’ p h ar m a c y c ust o m ers wit h o ut dr a wi n g a n y m e a ni n gf ul s cr uti n y. 1 2. T h e s e c o n d w a v e of t h e o pi oi d crisis w as tri g g er e d i n A u g ust 2 0 1 0 w h e n P ur d u e r el e as e d a p ur p ort e dl y “ a b us e d et err e nt ” v ersi o n of O x y C o nti n, a n d wit h dr e w t h e ori gi n al f or m ul ati o n fr o m t h e m ar k et. T h e r el e as e of t his r ef or m ul ati o n, c o v er e d b y a n e w p at e nt, all o w e d P ur d u e t o k e e p its hi g hl y -pr ofit a bl e a n d h e a vil y m ar k et e d dr u g “ o n br a n d, ” e ns u ri n g t h at it c o ul d c o nti n u e t o c h ar g e a pr e mi u m, r at h er t h a n h a v e pri c es sli p i n t h e f a c e of c o m p etiti o n fr o m g e n eri c v ersi o ns pr o d u c e d b y ot h er m a n uf a ct ur ers. O t h er m a n uf a ct ur ers i m m e di at el y f oll o w e d P ur d u e’s l e a d— a g ai n — wit h si mil ar r ef or m ul ati o ns of t h eir o w n o pi oi d pr o d u cts. N ot wit hst a n di n g t h e i m pli cit c o n c essi o n of t h es e r ef or m ul ati o ns t h at t h e first w a v e of o pi oi d dr u gs w er e d a n g er o usl y 6 13 of 258 INDEX NO. 400016/2018 FILED: SUFFOLK COUNTY CLERK 04/11/2019 11:19 AM NYSCEF DOC. NO. 19 RECEIVED NYSCEF: 04/11/2019 V ersi o n D at e d A pr. 1 0, 2 0 1 9 wit h C ert ai n R e d a cti o ns R e m o v e d P er P arti es' A gr e e m e nt a d di cti v e a n d s u bj e ct t o mis us e , n o n e of t h e D ef e n d a nts c h a n g e d t h eir b e h a vi or , e x c e pt f or t h e w ors e. 1 3. T h e M a n uf a ct ur er D ef e n d a nts di d n ot st o p l yi n g a b o ut t h e ris ks a n d all e g e d b e n efits of o pi oi ds, r ef or m t h eir a nti-di v ersi o n p oli ci es a n d pr a cti c es, or t ell N e w Y or k r e g ul at ors t h e tr ut h a b o ut t h eir vi ol ati o ns of t h e N Y C S A. I nst e a d, t h e y si m pl y a d d e d n e w f als e h o o ds a b o ut t h e eff e cti v e n ess of t h e n e w f or m ul ati o ns t o t h e fr a u d ul e nt r e p ert oir e e m pl o y e d b y t h eir s al es r e pr es e nt ati v es, s p e a k er’s pr o gr a ms, a n d fr o nt gr o u ps. M e a n w hil e, t h e M a n uf a ct ur er D ef e n d a nts l o b bi e d st at e a n d f e d er al r e g ul at ors t o m a n d at e t h e us e of t h eir br a n d -pr ot e ct e d “ a b us e d et err e nt ” f or m ul ati o ns, d es pit e t h e pills c osti n g n e arl y t wi c e as m u c h as t h e ori gi n al v ersi o ns. 6 1 4. M e a n w hil e, t h e Distri b ut or D ef e n d a nts c o nti n u e d t o t ur n a bli n d e y e t o t h eir o b vi o us c o m pli a n c e d efi ci e n ci es w hil e c o m p eti n g wit h e a c h ot h er t o t a k e o n hi g h -ris k p h ar m a ci es i n N e w Y or k as c ust o m ers. I n d e e d, b y t his ti m e, t w o of t h e f o ur Distri b ut or D ef e n d a nts h a d w ei g h e d d o w n t h eir alr e a d y d ef e cti v e c o m pli a n c e s yst e ms wit h a c q uisiti o ns of s m all er , r e gi o n al c o m p a ni es wit h e v e n s h o d di er s af e g u ar ds, a n d w h os e N e w Y or k c ust o m ers e x hi bit e d a n e v e n hi g h er n u m b er of u nr es ol v e d w ar ni n g si g ns t h a n t h eir e xisti n g c ust o m er b as es. 1 5. As a r es ult, pr es cri pt i o ns i n N e w Y or k f or t h e M a n uf a ct ur er D ef e n d a nts’ o pi oi d dr u gs c o nti n u e d t o cli m b , a n d t o b e e asil y fill e d b y t h e Distri b ut or D ef e n d a nts’ p h ar m a c y c ust o m ers , e v e n as t h e d a n g ers of o pi oi d mis us e b e c a m e s o o b vi o us as t o pr o m pt r ef or m ul ati o n of t h os e dr u gs , a n d e v e n as t h e pills t h e ms el v es b e c a m e m or e e x p e nsi v e. 1 6. T o t h e e xt e nt t h e M a n uf a ct ur er D ef e n d a nts’ “ a b us e d et err e nt ” o pi oi ds h a d a n i m p a ct, it w as o n e t h at w as dir e, if pr e di ct a bl e: dri vi n g p ati e nts t o a c h e a p er a n d m or e a v ail a bl e alt er n ati v e Dr u g m a k ers Pr o m ot e Pr ofit a bl e, b ut U n pr o v e n, O pi oi d S ol uti o ns , C B S N e ws, D e c. 1 5, 2 0 1 6, a v ail a bl e at htt ps:// w w w. c bs n e ws. c o m/ n e ws/ o pi o i d-e pi d e mi c -dr u g m a k ers -pr o m ot e -pr ofit a bl e -b ut -u n pr o v e n -s ol uti o n. 6 7 14 of 258 INDEX NO. 400016/2018 FILED: SUFFOLK COUNTY CLERK 04/11/2019 11:19 AM NYSCEF DOC. NO. 19 RECEIVED NYSCEF: 04/11/2019 V ersi o n D at e d A pr. 1 0, 2 0 1 9 wit h C ert ai n R e d a cti o ns R e m o v e d P er P arti es' A gr e e m e nt t h at c o ul d b e c o u nt e d o n t o d eli v er t h e fi x t h e m a n uf a ct ur ers h a d h o o k e d t h e m o n i n t h e first pl a c e— h er oi n. I n d e e d, as m a n y as 8 0 % of all h er oi n us ers first b e c a m e d e p e n d e nt o n o pi oi ds as a r es ult of a “l e giti m at e ” pr es cri pti o n f or t h e D ef e n d a nts’ pr o d u cts. 7 O v er t h e n e xt t hr e e y e ars, w hil e t h e D ef e n d a nts all c o nti n u e d t o g or g e t h e ms el v es o n pr ofits fr o m i n cr e asi n g o pi oi d s al es, t h e m or e d es p er at e of t h eir vi cti ms, u n a bl e t o “s c or e ” fr o m t h eir ori gi n al “ d e al ers, ” f u el e d a t hr e ef ol d i n cr e as e i n h er oi n -r el at e d f at aliti es a m o n g N e w Y or k ers. 1 7. I n 2 0 1 3, a n e v e n m or e t errif yi n g t hir d w a v e of t h e o pi oi d crisis, u n d er w hi c h N e w Y or k ers ar e still dr o w ni n g, w as s et off b y a n e xt e nsi o n of t h e h er oi n-s u bstit uti o n tr a p i nt o w hi c h t h e Def e n d a nts s h o ul d h a v e k n o w n t h e ir vi cti ms w o ul d f all. S p e cifi c all y, h er oi n d e al ers b e g a n pr ofit e eri n g b y “ c utti n g ” t h eir pr o d u ct wit h m assi v e i n cr e as es of i n a cti v e a d ult er a nts, a n d att e m pti n g t o a c hi e v e t h e s a m e i nt o xi c ati n g a n d a d di cti v e eff e cts b y i ntr o d u ci n g s m all q u a ntiti es of f e nt a n yl, a s ynt h eti c o pi oi d t h at is t e n ti m es c h e a p er b ut 5 0 ti m es m or e p o w erf ul t h e n h er oi n its elf.8 1 8. O pi oi d us ers b e g a n d yi n g at a n u n pr e c e d e nt e d r at e as t h e y o v er d os e d o n t h e u n pr e di ct a bl e, u n c o ntr oll a bl e , a n d u n d et e ct a bl e a m o u nts of f e nt a n yl c o nt ai n e d i n a n y gi v e n b at c h of str e et h er oi n. T his, i n t ur n, l e d t o a fl o uris hi n g n e w m ar k et f or c o u nt erf eit o pi oi d pills a m o n g t h os e s e e ki n g t h e r el ati v e “s af et y ” of t h e D ef e n d a nts’ pr o d u cts — a cr u el h o a x, gi v e n t h at t h e c o u nt erf eits ar e t h e ms el v es l a c e d wit h d e a dl y f e nt a n yl. At t h e s a m e ti m e, m or e a n d m or e p ati e nts C hrist o p h er M. J o n es, H er oi n Us e a n d H er oi n Us e Ris k B e h a vi ors A m o n g N o n m e di c al Us ers of Pr es cri pti o n O pi oi d P ai n R eli e v ers — U nit e d St at es, 2 0 0 2 -2 0 0 4 a n d 2 0 0 8 -2 0 1 0 , 1 3 2 Dr u g Al c o h ol D e p e n d e n c e 9 5-1 0 0 ( 2 0 1 3); Pr a di p K. M u h uri et al., Ass o ci ati o ns of N o n m e di c al P ai n R eli e v er Us e a n d I niti ati o n of H er oi n Us e i n t h e U nit e d St at es , C B HS Q D at a R e vi e w ( A u g. 2 0 1 3), a v ail a bl e at htt ps:// w w w.s a m hs a. g o v/ d at a/sit es/ d ef a ult/fil e s/ D R 0 0 6/ D R 0 0 6/ n o n m e di c al -p ai n -r eli e v er- us e-2 0 1 3 ht m . 8 S y nt h eti c O pi oi d O v er d os e D at a , Ctrs. F or Dis e as e C o ntr ol a n d Pr e v e nti o n ( D e c. 1 9. 2 0 1 8), htt ps:// w w w. c d c. g o v/ dr u g o v er d os e/ d at a/f e nt a n yl ht ml, (l ast visit e d M ar. 2 5, 2 0 1 9) . 7 8 15 of 258 INDEX NO. 400016/2018 FILED: SUFFOLK COUNTY CLERK 04/11/2019 11:19 AM NYSCEF DOC. NO. 19 RECEIVED NYSCEF: 04/11/2019 V ersi o n D at e d A pr. 1 0, 2 0 1 9 wit h C ert ai n R e d a cti o ns R e m o v e d P er P arti es' A gr e e m e nt w er e p us h e d i nt o t his d e at h tr a p b y t h e M a n uf a ct ur er D ef e n d a nts, w h o i n cr e as e d t h e pri c es f or t h eir br a n d e d o pi oi d dr u gs b y m or e t h a n 5 0 % b et w e e n 2 0 1 3 a n d 2 0 1 6. 9 1 9. T his l at est s ur g e of t h e o pi oi d crisis h as b e e n t h e d e a dli est a n d m ost i ntr a ct a bl e: o pi oi d r el at e d o v er d os e f at aliti es i n t h e St at e h a v e m or e t h a n d o u bl e d si n c e 2 0 1 3 — wit h a 3 0- f ol d i n cr e as e i n f e nt a n yl-r el at e d d e at hs i n N e w Y or k Cit y 1 0 — e v e n t h o u g h o pi oi d pr es cri pti o ns i n N e w Y or k h a v e b e e n d e cr e a si n g si n c e t h at s a m e y e ar, w h e n t h e st at e b e g a n i m pl e m e nti n g a Pr es cri pti o n Dr u g M o nit ori n g Pr o gr a m ( “ P D M P ”) t h at r e q uir es pr es cri b ers t o c h e c k a d at a b as e r e c or di n g all of t h eir p ati e nts’ ot h er pr es cri pti o ns f or c o ntr oll e d s u bst a n c es : 11 9 U. S. F o o d a n d Dr u g A d mi n., F D A A n al ysis of L o n g -T er m Tr e n ds i n Pr es cri pti o n O pi oi d A n al g esi c Pr o d u cts: Q u a ntit y, S al es, and Pri c e Tr e n ds ( M ar. 1, 2 0 1 8), a v ail a bl e at htt ps:// w w w.f d a. g o v/ d o w nl o a ds/ A b o ut F D A/ R e p orts M a n u als F or ms/ R e p orts/ U C M 5 9 8 8 9 9. p df. 10 C o d y C ol o n -B er e zi n et al., O v er d os e D e at hs I n v ol vi n g F e nt a n yl a n d F e nt a n yl A n al o gs — N e w Y or k Cit y, 2 0 0 0 – 2017, 68 M or bi dit y & M ort alit y W kl y. R e p. 37–40 (J a n. 1 8, 2 0 1 9), a v ail a bl e at htt ps:// w w w. c d c. g o v/ m m wr/ v ol u m es/ 6 8/ wr/ m m 6 8 0 2 a 3 ht m. 11 Ctrs. f or Dis e as e C o ntr ol a n d Pr e v e nti o n Wi d e -R a n g i n g O nli n e D at a f or E pi d e mi ol o gi c R es e ar c h ( C D C W O N D E R), htt ps:// w o n d er. c d c. g o v/ ( d at a a c c ess e d F e b. 5, 2 0 1 9); A R C O S R et ail Dr u g S u m m ar y R e p orts , Dr u g E nf or c e m e nt A d mi n. Di v ersi o n C o ntr ol Di v., htt ps:// w w w. d e a di v ersi o n. us d oj. g o v/ ar c os/r et ail _ dr u g _s u m m ar y (l ast 9 16 of 258 INDEX NO. 400016/2018 FILED: SUFFOLK COUNTY CLERK 04/11/2019 11:19 AM NYSCEF DOC. NO. 19 RECEIVED NYSCEF: 04/11/2019 V ersi o n D at e d A pr. 1 0, 2 0 1 9 wit h C ert ai n R e d a cti o ns R e m o v e d P er P arti es' A gr e e m e nt 2 0. It is n o w cl e ar t h at n o b o d y i n t h e St at e is s af e fr o m D ef e n d a nts’ d e pr e d ati o ns. N ot t h e el d erl y, w h o ar e h os pit ali z e d m or e t h a n fi v e ti m es as oft e n f or o pi oi d o v er us e as t h e y w er e w h e n O x y C o nti n e x pl o d e d o nt o t h e m ar k et. 12 N ot o ur St at e’s v et er a ns, w h o ar e t wi c e as li k el y t o di e fr o m a n o pi oi ds o v er d os e as t h os e w h o h a v e n ot s er v e d i n t h e milit ar y. 1 3 N ot e v e n o ur f a mili es’ n e w b or ns, w h o ar e n o w m or e t h a n f o ur ti m es as li k el y t o s uff er fr o m N e o n at al A bsti n e n c e S y n dr o m e — f or c e d t o e n d ur e p h ysi c al wit h dr a w al fr o m o pi oi ds as t h e y str u g gl e t o t a k e t h eir first br e at hs a n d o p e n t h eir e y es t o t h e w orl d — t h a n t h e y w er e j ust a d e c a d e a g o. 2 1. A s t h e e n or mit y of t h e D ef e n d a nts’ mis c o n d u ct h as b e g u n t o b e u n c o v er e d t hr o u g h t h e c o urs e of m ulti pl e g o v er n m e nt al i n v esti g ati o n s, t h ey h a v e m a d e c os m eti c a n d i n c o ns e q u e nti al c h a n g es t o t h eir pr a cti c es t o s ettl e t h os e i n v esti g ati o ns a n d t o d efl e ct p u bli c o utr a g e. N o n et h el ess, t h e y r e m ai n d efi a nt a n d u n a c c o u nt a bl e f or t h e i m m e ns e d a m a g e t h e y h a v e d o n e, a n d i n diff er e nt t o t h eir c or p or at e r es p o nsi biliti es m o vi n g f or w ar d. T h e M a n uf a ct ur er D ef e n d a nts m a y h a v e c urt ail e d t h eir d e c e pti v e-m ar k eti n g s pr e e, b ut t h e y h a v e d o n e n ot hi n g t o c orr e ct t h e mis i nf or m ati o n t h e y pr o p a g at e d i n t h e m e di c al c o m m u nit y, w hi c h s p ar k e d th e crisis i n t h e first pl a c e, a n d is still p utti n g p ati e nts at ris k. Li k e wis e, t h e D istri b ut or D ef e n d a nts ar e n o w p a yi n g li p s er vi c e t o t h eir l e g al d uti es u n d er t h e N Y C S A t o pr e v e nt t h e di v ersi o n of o pi oi ds, b ut t h eir c o m pli a n c e s yst e ms r e m ai n d e e pl y fl a w e d i n w a ys t h at ar e c onti n ui n g t o e n a bl e a n d p er p et u at e t h e o v ers u p pl y of t h es e d e a dl y a n d a d di cti v e dr u gs at p h ar m a ci es t hr o u g h o ut t h e S t at e. visit e d M ar. 2 5, 2 0 1 9); P o p ul ati o n and H o usi n g U nit Esti m at es , U. S. C e ns us B ur e a u, htt ps:// w w w. c e ns us. g o v/ pr o gr a ms -s ur v e ys/ p o p est. ht ml (l ast visit e d M ar. 2 5, 2 0 1 9). 12 U m a S ur y a d e v ar a et al., O pi oi d Us e i n t h e El d erl y , Ps y c hi atri c Ti m es, J a n. 3 0, 2 0 1 8, a v ail a bl e at htt ps:// w w w. ps y c hi atri cti m es. c o m/s p e ci al -r e p orts/ o pi oi d-us e -el d erl y. 13 B ar b ar a G ol d b er g, O pi oi d A b us e Crisis T a k es H e a v y T oll o n U. S. V et er a ns , R e ut ers, N o v. 1 0, 2 0 1 7, a v ail a bl e at htt ps:// w w w.r e ut ers. c o m/ arti cl e/ us -us a -v et er a ns -o pi oi ds/ o pi oi d- a b us e -crisis -t a k es-h e a v y -t oll-o n - u-s-v et er a ns i d U S K B N 1 D A 1 B 2. 10 17 of 258 INDEX NO. 400016/2018 FILED: SUFFOLK COUNTY CLERK 04/11/2019 11:19 AM NYSCEF DOC. NO. 19 RECEIVED NYSCEF: 04/11/2019 V ersi o n D at e d A pr. 1 0, 2 0 1 9 wit h C ert ai n R e d a cti o ns R e m o v e d P er P arti es' A gr e e m e nt T h e D a n g e r Still L o o mi n g, t h e D a m a g e D o n e, a n d t h e R e m e di es R e q ui r e d 2 2. First a n d f or e m ost, Pl ai ntiff s e e ks t o pr ot e ct t h e St at e a n d its r esi d e nts fr o m t h e o n g oi n g t hr e at p os e d b y t h e p u bli c n uis a n c e D ef e n d a nts h a v e cr e at e d, a n d t h e l a wl ess pr a cti c es t h e y ar e b o u n d t o c o nti n u e if n ot r estr ai n e d. T h e d a n g ers p os e d b y t h e D ef e n d a nts’ e n d uri n g i m p a ct i n w ar pi n g t h e p er c e pti o n a n d a v ail a bilit y of o pi oi ds will r e m ai n e m b e d d e d i n t h e l a n ds c a p e of t h e St at e u ntil a n d u nl ess t h e y ar e c o m p ell e d t o r o ot it o ut. I n d e e d, N e w Y or k alr e a d y s p e n ds h u n dr e ds of milli o ns a n n u all y o n s u p p ort, tr e at m e nt, a n d r e c o v er y pr o gr a ms, r esi d e nti al s er vi c es, 2 4/ 7 ur g e nt a c c ess c e nt ers, c o m m u nit y c o aliti o ns, f a mil y s u p p ort n a vi g at ors, a n d o v er d os e-r e v ersi n g n al o x o n e kits a n d tr ai ni n g. Y et d es pit e t h es e eff orts, t h e St at e’s r at e of o pi oi d -r el at e d d eat hs c o n ti n u es its st e a d y cli m b: 1 4 S e e als o N. Y. St at e Offi c e of Al c o h olis m a n d S u bst a n c e A b us e S er vi c es ( O A S A S), N e w Y or k St at e E pi d e mi ol o gi c al Pr ofil e: S u bst a n c e A b us e a n d Ot h er M e nt al, E m oti o n al, a n d B e h a vi or al ( M E B) Dis or d ers ( N o v. 2 0 1 8) a v ail a bl e at htt ps:// w w w. o as as n y. g o v/ pr e v e nti o n/ d o c u m e nts/ N Y S _ E pi d e mi ol o gi c al _ Pr ofil e _ 1 2 _ 1 8. p df ( n oti n g t h at o pi oi d o v er d os e d e at hs i n cr e as e d st at e wi d e b y 1 9 2. 4 % fr o m 2 0 0 7 – 1 6); Offi c e of t h e N. Y. St at e C o m ptr oll er, Pr es cri pti o n O pi oi d A b us e a n d H er oi n A d di cti o n i n N e w Y or k St at e 1 –2 (J u n e 2 0 1 6), a v ail a bl e at htt ps:// w w w. os c.st at e. n y. us/ pr ess/r el e as es/j u n e 1 6/ h er oi n _ a n d _ o pi oi ds. p df . 14 11 18 of 258 INDEX NO. 400016/2018 FILED: SUFFOLK COUNTY CLERK 04/11/2019 11:19 AM NYSCEF DOC. NO. 19 RECEIVED NYSCEF: 04/11/2019 V ersi o n D at e d A pr. 1 0, 2 0 1 9 wit h C ert ai n R e d a cti o ns R e m o v e d P er P arti es' A gr e e m e nt 2 3. H o w e v er, pr os p e cti v e r e m e di es al o n e will n ot s uffi c e t o w or k j usti c e h er e. T h e St at e a n d its r esi d e nts h a v e alr e a d y s uff er e d a st a g g eri n g t oll as a r es ult of t h e D ef e n d a nts’ mis c o n d u ct: t h o us a n ds of li v es l ost, t h o us a n ds m or e f a mili es d estr o y e d, a n d c o m m u niti es br o k e n i n e v er y p art of t h e St at e . 2 4. F r o m s o m e of t h es e i nj uri es c ert ai n m e as ur es of e c o n o mi c l oss c a n b e distill e d, i n cl u di n g, f or e x a m pl e: s u ms s p e nt b y t h e S t at e o n fr a u d ul e ntl y- i n d u c e d r ei m b urs e m e nts of i m pr o p er o pi oi d pr es cri pti o ns; l ost pr o d u cti vit y a m o n g st at e w or k ers i m p a ct e d b y t h e o pi oi d crisis ; a n d i n cr e as e d p u bli c h e alt h a n d p u bli c s af et y e x p e n dit ur es. 2 5. Ot h er i nj uri es i nfli ct e d b y t h e D ef e n d a nts, t h o u g h, c a n o nl y a d dr ess e d, h o w e v er i m pr e cis ely , t hr o u g h t h e i m p ositi o n of stri ct li a bilit y f or t h e p er s e st at ut or y p e n alti es t h e D ef e n d a nts k n o wi n gl y c o urt e d b y vi ol ati n g t h eir l e g al d uti es, or b y r es ort i n g t o t h e fl e xi bilit y of t h e e q uit a bl e r e m e di es a v ail a bl e t o Pl ai ntiff a n d t h e C o urt. 12 19 of 258 INDEX NO. 400016/2018 FILED: SUFFOLK COUNTY CLERK 04/11/2019 11:19 AM NYSCEF DOC. NO. 19 RECEIVED NYSCEF: 04/11/2019 V ersi o n D at e d A pr. 1 0, 2 0 1 9 wit h C ert ai n R e d a cti o ns R e m o v e d P er P arti es' A gr e e m e nt 2 6. A c c or di n gl y, t h e St at e of N e w Y or k bri n gs t his a cti o n t o pr ot e ct its r esi d e nts, f a mili es, a n d c o m m u niti es , e n d t his c o nti n ui n g tr a g e d y pl a yi n g o ut a cr oss t h e St at e, a n d bri n g a c c o u nt a bilit y t o t h os e r es p o nsi bl e f or c a usi n g t his crisis. 2 7. S p e cifi c all y, Pl ai ntiff s e e ks a n or d er: (i) r e q uiri n g D ef e n d a nts t o e n d o w a n a b at e m e nt f u n d wit h s uffi ci e nt c a pit al t o eli mi n at e t h e p u bli c n uis a n c e t h e y h a v e cr e at e d; (ii) e nj oi ni n g D ef e n d a nts fr o m m ar k eti n g or distri b uti n g o pi oi ds i n N e w Y or k u nl ess t h e y c o m pl y wit h h ei g ht e n e d a n d i n d e p e n d e ntl y -m o nit or e d s af e g u ar ds a g ai nst t h e r e c urr e n c e of t h eir fr a u d ul e nt a n d ill e g al pr a cti c es; (iii) c o m p elli n g D ef e n d a nts t o c orr e ct t h e ir f als e a n d misl e a di n g p u bli c st at e m e nts a n d o missi o ns c o n c er ni n g t h os e pr a cti c es; (i v) a w ar di n g Pl ai ntiff m o n et ar y d a m a g es f or t h e f ull r a n g e of e c o n o mi c i nj uri es D ef e n d a nts’ mis c o n d u ct h as i nfli ct e d o n N e w Y or k St at e; ( v) a w ar di n g Pl ai ntiff st at ut or y p e n alti es f or e a c h a n d e v er y vi ol ati o n of N e w Y or k’s c o ntr oll e d -s u bst a n c e a n d c o ns u m er- pr ot e cti o n l a ws b y D ef e n d a nts ; ( vi) d e cl ari n g t h e D ef e n d a nts’ li c e ns es t o m a n uf a ct ur e a n d/ or distri b ut e c o ntr oll e d s u bst a n c es v oi d a b i niti o o n t h e gr o u n ds t h at t h os e li c e ns es w er e i m pr o p erl y pr o c ur e d; ( vii) f as hi o ni n g a p pr o pri at e e q uit a bl e r e m e di es, i n cl u di n g, wit h o ut li mit ati o n, dis g or g e m e nt of all ill -g ott e n g ai ns a n d r estit uti o n w h er e a n d w h e n it c a n pr a cti c a bl y b e m a d e ; ( viii) a w ar di n g Pl ai ntiff p u niti v e d a m a g es d u e t o t h e e gr e gi o us n at ur e of d ef e n d a nts’ fr a u d, willf ul mis c o n d u ct , a n d/ or gr oss n e gli g e n c e; a n d (i x) gr a nti n g s u c h ot h er r eli ef as t h e C o urt m a y d e e m j ust. J U RI S DI C TI O N A N D V E N U E 2 8. T his C o urt h as j uris di cti o n p urs u a nt t o N e w Y or k C o nstit uti o n, Arti cl e VI, § 7( a), a n d J u di ci ar y L a w § 1 4 0- b. N o cl ai m or s u bst a nti al q u esti o n of f e d er al l a w is all e g e d. 2 9. T his C o urt h as p ers o n al j uris di cti o n o v er e a c h d ef e n d a nt p urs u a nt t o Ci vil Pr a cti c e L a w a n d R ul es § § 3 0 1 a n d 3 0 2. E a c h D ef e n d a nt tr a ns a cts s u bst a nti al b usi n es s wit hi n t h e St at e a n d h as c o m mitt e d a n d c o nti n u es t o c o m mit t orti o us a cts wit hi n t h e St at e; a n d s e v er al o w n, us e, or p oss ess r e al pr o p ert y sit u at e d wit hi n t h e St at e. 13 20 of 258 INDEX NO. 400016/2018 FILED: SUFFOLK COUNTY CLERK 04/11/2019 11:19 AM NYSCEF DOC. NO. 19 RECEIVED NYSCEF: 04/11/2019 V ersi o n D at e d A pr. 1 0, 2 0 1 9 wit h C ert ai n R e d a cti o ns R e m o v e d P er P arti es' A gr e e m e nt 21 of 258 INDEX NO. 400016/2018 FILED: SUFFOLK COUNTY CLERK 04/11/2019 11:19 AM NYSCEF DOC. NO. 19 RECEIVED NYSCEF: 04/11/2019 V ersi o n D at e d A pr. 1 0, 2 0 1 9 wit h C ert ai n R e d a cti o ns R e m o v e d P er P arti es' A gr e e m e nt 3 7. D ef e n d a nt T h e P ur d u e Fr e d eri c k C o m p a n y, I n c. is a N e w Y or k c or p or ati o n . Its pri n ci p al pl a c e of b usi n ess is St a mf or d, C o n n e cti c ut. 3 8. D ef e n d a nt T h e P. F. L a b or a t ori es, I n c. ( “ P F L a bs ”) is a N e w J ers e y c or p or ati o n. Its pri n ci p al pl a c e of b usi n ess is T ot o w a, N e w J ers e y. 3 9. T h e a b o v e-i d e ntifi e d Def e n d a nts a n d t h eir D E A r e gistr a nt s u bsi di ari es a n d affili at es ar e c oll e cti v el y ar e r ef err e d t o as “ P ur d u e. ” 4 0. At all r el e v a nt ti m es, P ur d u e, w hi c h is a c oll e cti o n of pri v at e c o m p a ni es, h as b e e n c o ntr oll e d b y m e m b ers of t h e e xt e n d e d S a c kl er f a mil y, w h o ar e t h e ulti m at e i nt e n d e d b e n efi ci ari es of virt u all y all of P ur d u e’s pr ofit distri b uti o ns . T h e i n di vi d u al D ef e n d a nts n a m e d i n t h is a cti o n ar e t h e r e m ai ni n g li vi n g S a c kl er f a mil y m e m b ers w h o s er v e d o n t h e b o ar d of P ur d u e P h ar m a, I n c. (t h e “ P ur d u e b o ar d ”), w hi c h f u n cti o n e d as t h e n e x us of d e cisi o n - m a ki n g f or all of P ur d u e. A c c or di n g t o P ur d u e’s B y-L a ws, t h e c o m p a n y c o n d u ct e d its B o a r d m e eti n gs eit h er i n N e w Y or k or C o n n e cti c ut. 4 1. D ef e n d a nt Ri c h ar d S. S a c kl er b e c a m e a m e m b er of t h e P ur d u e b o ar d i n 1 9 9 0 a n d b e c a m e its c o -c h air i n 2 0 0 3, w hi c h h e r e m ai n e d u ntil h e l eft t h e b o ar d i n 2 0 1 8 . H e w as als o P ur d u e’s h e a d of r es e ar c h a n d d e v el o p m e nt fr o m at l e ast 1 9 9 0 t hr o u g h 1 9 9 9, a n d its pr esi d e nt fr o m 1 9 9 9 t hr o u g h 2 0 0 3. H e r esi d es i n N e w Y or k, Fl ori d a, a n d T e x as . H e c urr e ntl y h ol ds a n a cti v e li c e ns e t o pr a cti c e m e di ci n e iss u e d b y t h e N e w Y or k St at e E d u c ati o n D e p art m e nt. H e is a tr ust e e of t h e S a c kl er S c h o ol of M e di ci n e, a d ir e ct or a n d t h e vi c e p r esi d e nt o f t h e R a y m o n d a n d B e v erl y S a c kl er F o u n d ati o n , a n d a d ir e ct or a n d th e p r esi d e nt a n d tr e as ur er of t h e Ri c h ar d a n d B et h S a c kl er F o u n d ati o n I n c. , all t hr e e of w hi c h a r e N e w Y or k N ot -f or-Pr ofit C or p or ati o n s. I n S e pt e m b er 2 0 1 7, t hr o u g h a tr ust h e ulti m at el y c o ntr ols f or t h e b e n efit of his c hil dr e n a n d gr a n d c hil dr e n, a n d wit h pr o c e e ds fr o m his i nt er ests i n P ur d u e, h e p ur c h as e d a c o n d o mi ni u m o n M a n h att a n’s E ast Si d e f or 15 22 of 258 INDEX NO. 400016/2018 FILED: SUFFOLK COUNTY CLERK 04/11/2019 11:19 AM NYSCEF DOC. NO. 19 RECEIVED NYSCEF: 04/11/2019 V ersi o n D at e d A pr. 1 0, 2 0 1 9 wit h C ert ai n R e d a cti o ns R e m o v e d P er P arti es' A gr e e m e nt $ 3. 2 2 5 milli o n. 4 2. D ef e n d a nt J o n at h a n D. S a c kl er w as a m e m b er of P ur d u e’s b o ar d fr o m 1 9 9 0 t hr o u g h 2 0 1 8. H e r esi d es i n C o n n e cti c ut. H e is a tr ust e e of t h e S a c kl er S c h o ol of M e di ci n e, t h e pr esi d e nt a n d C E O of t h e R a y m o n d a n d B e v erl y S a c kl er F o u n d ati o n, a n d t h e vi c e pr esi d e nt of t h e Ri c h ar d a n d B et h S a c kl er F o u n d ati o n I n c ., all t hr e e of w hi c h ar e N e w Y or k N ot-f or- Pr ofit C or p or ati o ns. 4 3. D ef e n d a nt M orti m er D. A. S a c kl er h as b e e n a m e m b er of P ur d u e’s b o ar d si n c e 1 9 9 3. H e r esi d es i n N e w Y or k. M orti m er is a dir e ct or a n d t h e pr esi d e nt of t h e M orti m er a n d J a c q u eli n e S a c kl er F o u n d ati o n, a n d a dir e ct or a n d t h e vi c e pr esi d e nt a n d tr e as ur er of t h e M orti m er D. S a c kl er F o u n d ati o n, I n c., b ot h of w hi c h ar e N e w Y or k N ot -f or-Pr ofit C or p or ati o ns. 4 4. D ef e n d a nt K at h e A. S a c kl er w as a m e m b er of P ur d u e’s b o ar d fr o m 1 9 9 0 t hr o u g h 2 0 1 8. S h e r esi d es i n N e w Y or k a n d C o n n e cti c ut , a n d o w ns a n est at e i n S uff ol k C o u nt y v al u e d at a p pr o xi m at el y $ 5 milli o n . K at h e is a dir e ct or a n d pr esi d e nt of t h e S h a c k S a c kl er F o u n d ati o n, a dir e ct or a n d t h e vi c e pr esi d e nt a n d s e cr et ar y of t h e M orti m er D. S a c kl er F o u n d ati o n I n c., a n d is a g o v er n or of t h e N e w Y or k A c a d e m y of S ci e n c es, all t hr e e of w hi c h ar e N e w Y or k N ot -f or-Pr ofit C or p or ati o ns. 4 5. D ef e n d a nt Il e n e S a c kl er L ef c o urt w as a m e m b er of P ur d u e’s b o ar d b et w e e n 1 9 9 0 a n d 2 0 1 8. S h e r esi d es i n N e w Y or k. S h e is a dir e ct or of C ol u m bi a U ni v ersit y a n d is t h e pr esi d e nt of t h e S a c kl er L ef c o urt C e nt er f or C hil d D e v el o p m e nt I n c., b ot h of w hi c h ar e N e w Y or k N ot -f orPr ofit C or p or ati o ns. 4 6. D ef e n d a nt D a vi d A. S a c kl er w as a m e m b er of P ur d u e’s b o ar d fr o m 2 0 1 2 t hr o u g h 2 0 1 8. H e r esi d es i n N e w Y or k. I n 2 0 1 2, h e p ur c h as e d a $ 6 milli o n a p art m e nt o n M a n h att a n’s E ast Si d e wit h t h e pr o c e e ds fr o m his i nt er ests i n P ur d u e. 4 7. D ef e n d a nt B e v erl y S a c kl er w a s a m e m b er of P ur d u e’s b o ar d fr o m 1 9 9 3 t hr o u g h 2 0 1 7. 16 23 of 258 INDEX NO. 400016/2018 FILED: SUFFOLK COUNTY CLERK 04/11/2019 11:19 AM NYSCEF DOC. NO. 19 RECEIVED NYSCEF: 04/11/2019 V ersi o n D at e d A pr. 1 0, 2 0 1 9 wit h C ert ai n R e d a cti o ns R e m o v e d P er P arti es' A gr e e m e nt S h e r esi d es i n C o n n e cti c ut. B e v erl y S a c kl er s er v es as a Dir e ct or a n d t h e S e cr et ar y a n d Tr e as ur er of t h e R a y m o n d a n d B e v erl y S a c kl er F o u n d ati o n, a N e w Y or k N ot -f or- Pr ofit C or p or ati o n. 4 8. D ef e n d a nt T h er es a S a c kl er w as a m e m b er of P ur d u e’s b o ar d fr o m 1 9 9 3 t hr o u g h 2 0 1 8. S h e r esi d es i n N e w Y or k a n d t h e U nit e d Ki n g d o m . I n 2 0 1 1, s h e p ur c h as e d a m ulti milli o n-d oll ar a p art m e nt o n M a n h att a n’s Fift h A v e n u e wit h t h e pr o c e e ds fr o m h er i nt er ests i n P ur d u e. 4 9. T h es e i n di vi d u al D ef e n d a nts us e d a n u m b er of k n o w n a n d u n k n o w n e ntiti es n a m e d as D ef e n d a nts h er ei n as v e hi cl es t o tr a nsf er f u n ds fr o m P ur d u e dir e ctl y or i n dir e ctl y t o t h e ms el v es. T h es e i n cl u d e: 5 0. D ef e n d a nt P L P Ass o ci at es H ol di n gs L. P. , w hi c h is a D el a w ar e l i mit e d p art n ers hi p a n d a li mit e d p art n er of P ur d u e H ol di n gs L. P. Its p art n ers ar e P L P Ass o ci at es H ol di n gs I n c. a n d B R H ol di n gs Ass o ci at es L. P. 5 1. D ef e n d a nt R os e b a y M e di c al C o m p a n y L. P., w hi c h is a D el a w ar e li mit e d p art n ers hi p ulti m at el y o w n e d b y tr usts f or t h e b e n efit of o n e or m or e of t h e i n di vi d u al D ef e n d a nts. Its g e n er al p art n er is R os e b a y M e di c al C o m p a n y, I n c., a citi z e n of D el a w ar e a n d C o n n e cti c ut. T h e B o ar d of Dir e ct ors of R os e b a y M e di c al C o m p a n y, I n c. i n cl u d es b o ar d m e m b ers Ri c h ar d S. S a c kl er, a n d J on at h a n D. S a c kl er. 5 2. D ef e n d a nt B e a c o n C o m p a n y, w hi c h is a D el a w ar e g e n er al p art n ers hi p ulti m at el y o w n e d b y tr usts f or t h e b e n efit of m e m b ers of o n e or m or e of t h e i n di vi d u al D ef e n d a nts. 5 3. D ef e n d a nt D o e E ntiti es 1 -1 0, w hi c h ar e u n k n o w n tr usts, p art n ers hi ps, c o m p a ni es, a n d/ or ot h er l e g al e ntiti es, w hi c h ar e ulti m at el y o w n e d a n d/ or c o ntr oll e d b y, a n d t h e i d e ntiti es of w hi c h ar e p arti c ul arl y wit hi n t h e k n o wl e d g e of, o n e or m or e of t h e i n di vi d u al D ef e n d a nts. 5 4. T h e f or e g oi n g i n di vi d u al D ef e n d a nts ar e r ef err e d t o c oll e cti v el y as “t h e S a c kl ers. ” T h e f or e g oi n g e ntiti es t h e y us e d as v e hi cl es t o tr a nsf er f u n ds fr o m P ur d u e dir e ctl y or i n dir e ctl y t o 17 24 of 258 INDEX NO. 400016/2018 FILED: SUFFOLK COUNTY CLERK 04/11/2019 11:19 AM NYSCEF DOC. NO. 19 RECEIVED NYSCEF: 04/11/2019 V ersi o n D at e d A pr. 1 0, 2 0 1 9 wit h C ert ai n R e d a cti o ns R e m o v e d P er P arti es' A gr e e m e nt t h e ms el v es ar e r ef err e d t o as “t h e S a c kl er E ntiti es. ” T o g et h er, t h e S a c kl ers a n d t h e S a c kl er E ntiti es ar e r ef err e d t o c oll e cti v el y as t h e “ S a c kl er D ef e n d a nts. ” 2. J a ns s e n 5 5. D ef e n d a nt J o h ns o n & J o h ns o n ( “J &J ”) is a N e w J ers e y c or p or ati o n wit h its pri n ci p al pl a c e of b usi n ess i n N e w Br u ns wi c k, N e w J ers e y. 5 6. D ef e n d a nt J a nss e n P h ar m a c e uti c als, I n c. ( “J a nss e n P h ar m a c e uti c als ”) is a P e n ns yl v a ni a c or p or ati o n wit h its pri n ci p al pl a c e of b usi n ess i n Tit us vill e, N e w J ers e y . J a nss e n P h ar m a c e uti c als is a w h oll y o w n e d s u bsi di ar y of J &J. J a nss e n P h ar m a c e uti c als, I n c. w as f or m erl y k n o w n as Ort h o -M c N eil -J a nss e n P h ar m a c e uti c als, I n c., w hi c h i n t ur n w as f or m erl y k n o w n as J a nss e n P h ar m a c e uti c a, I n c. 5 7. D ef e n d a nt Ort h o -M c N eil -J a nss e n P h ar m a c e uti c als, I n c. ( “ O M P ”), n o w k n o w n as J a nss e n P h ar m a c e uti c als, I n c., is a P e n ns yl v a ni a c or p or ati o n wit h a pri n ci p al pl a c e of b usi n ess i n Tit us vill e, N e w J ers e y. 5 8. D ef e n d a nt J a nss e n P h ar m a c e uti c a, I n c. ( “J a nss e n P h ar m a c e uti c a ”), n o w k n o w n as J a nss e n P h ar m a c e uti c als, I n c., is a P e n ns yl v a ni a c or p or ati o n wit h its pri n ci p al pl a c e of b usi n ess i n Tit us vill e, N e w J ers e y. 5 9. T h e a b o v e-i d e ntifi e d d ef e n d a nts a n d t h eir D E A r e gistr a nt s u bsi di ari es a n d affili at es ar e r ef err e d t o c oll e cti v el y as “ J a nss e n. ” 3. M alli n c k r o dt 6 0. D ef e n d a nt M alli n c kr o dt pl c is a n Iris h p u bli c li mit e d c o m p a n y, wit h h e a d q u art ers i n St ai n es - U p o n-T h a m es, S urr e y, U nit e d Ki n g d o m. Wit hi n t h e U nit e d St at es, M alli n c kr o dt pl c o p er at es u n d er t h e n a m e M alli n c kr o dt P h ar m a c e uti c als, a n d m ai nt ai ns its U. S. h e a d q u art ers i n H a z el w o o d, Miss o uri. M alli n c kr o dt pl c w as i n c or p or at e d i n J a n u ar y 2 0 1 3 f or t h e p ur p os e of 18 25 of 258 INDEX NO. 400016/2018 FILED: SUFFOLK COUNTY CLERK 04/11/2019 11:19 AM NYSCEF DOC. NO. 19 RECEIVED NYSCEF: 04/11/2019 V ersi o n D at e d A pr. 1 0, 2 0 1 9 wit h C ert ai n R e d a cti o ns R e m o v e d P er P arti es' A gr e e m e nt h ol di n g t h e p h ar m a c e uti c als b usi n ess of C o vi di e n pl c, w hi c h w as f ull y tr a nsf err e d t o M alli n c kr o dt pl c i n J u n e of t h at y e ar. 6 1. S h ar es of M alli n c kr o dt pl c ar e tr a d e d o n t h e N e w Y or k St o c k E x c h a n g e (s y m b ol: M N K). I n its m ost r e c e nt F or m 1 0-K fil e d wit h t h e U nit e d St at es S e c uriti es a n d E x c h a n g e C o m missi o n ( “ S E C ”), M alli n c kr o dt pl c st at e d t h at its pr o d u cts c o m p et e pri m aril y i n t h e U. S . m ar k et, w hi c h a c c o u nt e d f or al m ost 9 0 % of t h e c o m p a n y’s $ 3. 2 billi o n i n n et s al es d uri n g t h e fis c al y e ar e n d e d D e c e m b er 2 8, 2 0 1 8. M alli n c kr o dt pl c r e g ul arl y c o n d u cts b usi n ess i n N e w Y or k. 6 2. D ef e n d a nt M alli n c kr o dt L L C is a D el a w ar e c or p or ati o n wit h a pri n ci p al pl a c e of b usi n ess i n H a z el w o o d, Miss o uri. Si n c e J u n e 2 8, 2 0 1 3, M alli n c kr o dt L L C h as b e e n a w h oll y o w n e d s u bsi di ar y of M alli n c kr o dt, pl c. Pri or t o J u n e 2 8, 2 0 1 3 M alli n c kr o dt, L L C w as a w h oll y o w n e d s u bsi di ar y of C o vi di e n pll c. 6 3. D ef e n d a nt S p e c G x L L C is a D el a w ar e li mit e d li a bilit y c o m p a n y wit h a pri n ci p al pl a c e of b usi n ess i n Cl a yt o n, Miss o uri . S p e c G x w as f or m e d o n N o v e m b er 1 4, 2 0 1 6 as a w h oll y o w n e d s u bsidi ar y of M alli n c kr o dt L L C. 6 4. M alli n c kr o dt L L C a n d S p e c G x L L C o p er at e a n o pi oi ds m a n uf a ct uri n g f a cilit y i n H o b art, N e w Y or k . 6 5. T h e a b o v e-i d e ntifi e d d ef e n d a nts a n d t h eir D E A r e gistr a nt s u bsi di ari es a n d affili at es ar e r ef err e d t o c oll e cti v el y as “ M alli n c kr o dt. ” 4. E n d o 6 6. D ef e n d a nt E n d o I nt er n ati o n al pl c is a n Iris h p u bli c li mit e d c o m p a n y, wit h gl o b al h e a d q u art ers i n D u bli n, Ir el a n d a n d U. S. h e a d q u art ers i n M al v er n, P e n ns yl v a ni a. Endo I nt er n ati o n al pl c o p er at es i n t h e U. S. as E n d o P h ar m a c e uti c als. 6 7. S h ar es of E n d o I nt er n ati o n al pl c ar e tr a d e d o n N A S D A Q (s y m b ol: E N D P). I n its m ost r e c e nt F or m 1 0-K fil e d wit h t h e S E C, E n d o I nt er n ati o n al pl c st at e d t h at its s al es a n d m ar k eti n g 19 26 of 258 INDEX NO. 400016/2018 FILED: SUFFOLK COUNTY CLERK 04/11/2019 11:19 AM NYSCEF DOC. NO. 19 RECEIVED NYSCEF: 04/11/2019 V ersi o n D at e d A pr. 1 0, 2 0 1 9 wit h C ert ai n R e d a cti o ns R e m o v e d P er P arti es' A gr e e m e nt a cti viti es ar e pri m aril y b as e d i n t h e U. S., a n d t h at its U. S. b usi n ess s e g m e nts a c c o u n t e d f or m or e t h a n 9 5 % of t h e c o m p a n y’s $ 2. 9 billi o n i n t ot al n et r e v e n u e d uri n g t h e y e ar e n d e d D e c e m b er 31, 2 0 1 8. E n d o I nt er n ati o n al pl c r e g ul arl y c o n d u cts b usi n ess i n N e w Y or k. 6 8. D ef e n d a nt E n d o H e alt h S ol uti o ns I n c. ( “ E H S ”) is a D el a w ar e c or p or ati o n wit h i ts pri n ci p al pl a c e of b usi n ess i n M al v er n, P e n ns yl v a ni a. E H S is a w h oll y o w n e d s u bsi di ar y of E n d o I nt er n ati o n al pl c. 6 9. D ef e n d a nt E n d o P h ar m a c e uti c als, I n c. ( “ E PI ”) is a w h oll y o w n e d s u bsi di ar y of E H S a n d is a D el a w ar e c or p or ati o n wit h its pri n ci p al pl a c e of b usi n ess i n M al v er n, P e n ns yl v a ni a. 7 0. D ef e n d a nt P ar P h ar m a c e uti c al, I n c. is a D el a w ar e c or p or ati o n wit h its pri n ci p al pl a c e of b usi n ess l o c at e d i n C h est n ut Ri d g e, N e w Y or k. P ar P h ar m a c e uti c al, I n c. is a w h oll y o w n e d s u bsi di ar y of P ar P h ar m a c e uti c al C o m p a ni es, I n c. f/ k/ a P ar P h ar m a c e uti c al H ol di n gs, I n c. 7 1. D ef e n d a nt P ar P h ar m a c e uti c al C o m p a ni es, I n c. is a D el a w ar e c or p or ati o n wit h its pri n ci p al pl a c e of b usi n ess l o c at e d i n C h est n ut Ri d g e, N e w Y or k. P ar P h ar m a c e uti c al, I n c. a n d P ar P h ar m a c e uti c al C o m p a ni es, I n c. ar e r ef err e d t o c oll e cti v el y “ P ar P h ar m a c e uti c al . ” 7 2. P ar P h ar m a c e uti c al w as a c q uir e d b y E n d o I nt er n ati o n al pl c i n S e pt e m b er 2 0 1 5 a n d is a n o p er ati n g c o m p a n y of E n d o I nt er n ati o n al pl c. 7 3. T h e a b o v e-i d e ntifi e d d ef e n d a nts a n d t h eir D E A r e gistr a nt s u bsi di ari es a n d affili at es ar e r ef err e d t o c oll e cti v el y as “ E n d o. ” 5. T e v a 7 4. D ef e n d a nt T e v a P h ar m a c e uti c al I n d ustri es, Li mit e d ( “ T e v a Lt d. ”) is a gl o b al p h ar m a c e uti c al c o m p a n y wit h h e a d q u art ers i n P et a h Ti k v a, Isr a el. S h ar es of T e v a Lt d. ar e tr a d e d o n t h e N e w Y or k St o c k E x c h a n g e (s y m b ol: T E V A). I n its m ost r e c e nt F or m 1 0-K fil e d wit h t h e S E C, T e v a Lt d. st at e d t h at it d o es b usi n ess i n t h e U nit e d St at es t hr o u g h its N ort h A m eri c a S e g m e nt, 20 27 of 258 INDEX NO. 400016/2018 FILED: SUFFOLK COUNTY CLERK 04/11/2019 11:19 AM NYSCEF DOC. NO. 19 RECEIVED NYSCEF: 04/11/2019 V ersi o n D at e d A pr. 1 0, 2 0 1 9 wit h C ert ai n R e d a cti o ns R e m o v e d P er P arti es' A gr e e m e nt w hi c h a c c o u nt e d f or a p pr o xi m at el y 5 0 % of t h e c o m p a n y’s $ 1 8. 9 billi o n i n n et r e v e n u e d uri n g t h e y e ar e n d e d D e c e m b er 3 1, 2 0 1 8. T e v a Lt d. r e g ul arl y c o n d u cts b usi n ess i n N e w Y or k. 7 5. D ef e n d a nt T e v a P h ar m a c e uti c als U S A, I n c. ( “ T e v a U S A ”) is a D el a w ar e c or p or ati o n wit h its pri n ci p al pl a c e of b usi n ess i n N ort h W al es, P e n ns yl v a ni a. T e v a U S A is a w h oll y o w n e d s u bsi di ar y of T e v a Lt d . 7 6. I n A u g ust 2 0 1 6, T e v a Lt d. b o u g ht A ct a vis P h ar m a, I n c. a n d A ct a vis L L C fr o m All er g a n pl c. T h us, si n c e A u g ust 2 0 1 6, T e v a Lt d. h as o w n e d t h e g e n eri c o pi oi ds b usi n ess t h at w as f or m erl y o w n e d b y t h e All er g a n e ntiti es. 7 7. D ef e n d a nt C e p h al o n, I n c. is a D el a w ar e c or p or ati o n wit h its pri n ci p al pl a c e of b usi n ess i n Fr a z er, P e n ns yl v a ni a. I n 2 0 1 1, T e v a Lt d. a c q uir e d C e p h al o n, I n c. 7 8. T h e a b o v e-i d e ntifi e d d ef e n d a nts a n d t h eir D E A r e gistr a nt s u bsi di ari es a n d affili at es ar e r ef err e d t o c oll e cti v el y as “ T e v a . ” 6. All e r g a n 7 9. D ef e n d a nt All er g a n pl c (f/ k/ a A ct a vis pl c) is a p u bli c li mit e d c o m p a n y i n c or p or at e d i n Ir el a n d wit h its pri n ci p al pl a c e of b usi n ess i n D u bli n, Ir el a n d. A ct a vis pl c a c q uir e d All er g a n pl c i n M ar c h 2 0 1 5, a n d t h e c o m bi n e d c o m p a n y c h a n g e d its n a m e t o All er g a n pl c i n J u n e 2 0 1 5. Pri or t o t h at, W ats o n P h ar m a c e uti c als, I n c. a c q uir e d A ct a vis, I n c. i n O ct o b er 2 0 1 2; t h e c o m bi n e d c o m p a n y c h a n g e d its n a m e t o A ct a vis, I n c. i n J a n u ar y 2 0 1 3 a n d t h e n t o A ct a vis pl c i n O ct o b er 2 0 1 3. 8 0. S h ar es of All er g a n pl c ar e tr a d e d o n t h e N e w Y or k St o c k E x c h a n g e (s y m b ol: A G N). I n its m ost r e c e nt F or m 1 0-K fil e d wit h t h e S E C, All er g a n pl c st at e d t h at it d o es b usi n ess i n t h e U. S. t hr o u g h its U S S p e ci ali z e d T h er a p e uti cs a n d U S G e n er al M e di ci n e s e g m e nts, w hi c h g e n er at e d n e arl y 8 0 p er c e nt of t h e c o m p a n y’s $ 1 5. 8 billi o n i n n et r e v e n u e d uri n g t h e y e ar e n d e d D e c e m b er 3 1, 2 0 1 8. All er g a n pl c r e g ul arl y c o n d u cts b usi n ess i n N e w Y or k. 21 28 of 258 INDEX NO. 400016/2018 FILED: SUFFOLK COUNTY CLERK 04/11/2019 11:19 AM NYSCEF DOC. NO. 19 RECEIVED NYSCEF: 04/11/2019 V ersi o n D at e d A pr. 1 0, 2 0 1 9 wit h C ert ai n R e d a cti o ns R e m o v e d P er P arti es' A gr e e m e nt 29 of 258 INDEX NO. 400016/2018 FILED: SUFFOLK COUNTY CLERK 04/11/2019 11:19 AM NYSCEF DOC. NO. 19 RECEIVED NYSCEF: 04/11/2019 V ersi o n D at e d A pr. 1 0, 2 0 1 9 wit h C ert ai n R e d a cti o ns R e m o v e d P er P arti es' A gr e e m e nt 1. M c K ess o n 8 9. D ef e n d a nt M c K ess o n C or p or ati o n ( “ M c K ess o n ” ) is a D el a w ar e c or p or ati o n. Its pri n ci p al pl a c e of b usi n ess is S a n Fr a n cis c o, C alif or ni a . M c K ess o n distri b ut es p h ar m a c e uti c al dr u gs, i n cl u di n g o pi oi ds, t hr o u g h o ut t h e U nit e d St at es, i n cl u di n g t h e St at e of N e w Y or k. 9 0. L ast y e ar, M c K ess o n r e p ort e d o v er $ 1 9 8 billi o n i n a n n u al r e v e n u e a n d w as r a n k e d as t h e si xt h l ar g est c o m p a n y i n t h e U nit e d St at es. 2. A m e ris o u r c e 9 1. D ef e n d a nt A m eris o ur c e B er g e n Dr u g C or p or ati o n is a D el a w ar e c or p or atio n. I ts pri n ci p al pl a c e of b usi n ess is i n C h est er br o o k, P e n ns yl v a ni a. B ell c o H e alt h C or p. ( “ B ell c o ”) is a p h ar m a c e uti c al a n d h e alt h c ar e distri b uti o n c o m p a n y. B ell c o is b as e d i n N ort h A mit y vill e, N e w Y or k, a n d si n c e O ct o b er 2 0 0 7, h as o p er at e d as a w h oll y o w n e d s u bsi di ar y of A m eris o ur c e B er g e n Dr u g C or p or ati o n. 9 2. A m eris o ur c e B er g e n Dr u g C or p or ati o n and B ell c o, a n d t h eir D E A r e gistr a nt s u bsi di ari es a n d affili at es ( c oll e cti v el y , “ A m eris o ur c e ”) , distri b ut e o pi oi ds t hr o u g h o ut t h e U nit e d St at es, i n cl u di n g t h e St at e of N e w Y or k. 9 3. L ast y e ar, A m eris o ur c e r e p ort e d o v er $ 1 5 3 billi o n i n a n n u al r e v e n u e a n d w as r a n k e d as t h e 1 2 t h l ar g est c o m p a n y i n t h e U nit e d St at es. 3. C a r di n al 9 4. D ef e n d a nt C ar di n al H e alt h, I n c. is a n O hi o c or p or ati o n . Its pri n ci p al pl a c e o f b usi n ess is i n D u bli n, O hi o. Ki nr a y I n c. ( “ Ki nr a y ”) is a w h ol es al e distri b ut or of br a n d e d a n d g e n eri c p h ar m a c e uti c al dr u gs, i n cl u di n g o pi oi ds. Ki nr a y is b as e d i n W hit est o n e, N e w Y or k, a n d si n c e D e c e m b er 2 0 1 0, h as o p er at e d as a w h oll y o w n e d s u bsi di ar y o f C ar di n al H e alt h I n c. 23 30 of 258 INDEX NO. 400016/2018 FILED: SUFFOLK COUNTY CLERK 04/11/2019 11:19 AM NYSCEF DOC. NO. 19 RECEIVED NYSCEF: 04/11/2019 V ersi o n D at e d A pr. 1 0, 2 0 1 9 wit h C ert ai n R e d a cti o ns R e m o v e d P er P arti es' A gr e e m e nt 31 of 258 INDEX NO. 400016/2018 FILED: SUFFOLK COUNTY CLERK 04/11/2019 11:19 AM NYSCEF DOC. NO. 19 RECEIVED NYSCEF: 04/11/2019 V ersi o n D at e d A pr. 1 0, 2 0 1 9 wit h C ert ai n R e d a cti o ns R e m o v e d P er P arti es' A gr e e m e nt w as us e d t o c o m mit t h e u nl a wf ul a cts c o m pl ai n e d of h er ei n, w hi c h r es ult e d i n t h e St at e’s i nj ur y; • E x pr essl y or i m pli e dl y ass u m e d t h e pr e d e c ess or’s li a biliti es f or t h e u nl a wf ul a cts c o m pl ai n e d of h er ei n, w hi c h r es ult e d i n t h e St at e’s i nj ur y; • Ess e nti all y m er g e d its elf i n s u bst a n c e, if n ot i n f or m, wit h t h e a c q uir e d s u bsi di ar y c o m p a n y; • Is a m er e c o nti n u ati o n of t h e a c q uir e d-s u bsi di ar y c o m p a n y; a n d/ or • E nt er e d i nt o s u c h tr a ns a cti o n t o fr a u d ul e ntl y es c a p e s u c h o bli g ati o ns. 25 32 of 258 INDEX NO. 400016/2018 FILED: SUFFOLK COUNTY CLERK 04/11/2019 11:19 AM NYSCEF DOC. NO. 19 RECEIVED NYSCEF: 04/11/2019 V ersi o n D at e d A pr. 1 0, 2 0 1 9 wit h C ert ai n R e d a cti o ns R e m o v e d P er P arti es' A gr e e m e nt 33 of 258 INDEX NO. 400016/2018 FILED: SUFFOLK COUNTY CLERK 04/11/2019 11:19 AM NYSCEF DOC. NO. 19 RECEIVED NYSCEF: 04/11/2019 V ersi o n D at e d A pr. 1 0, 2 0 1 9 wit h C ert ai n R e d a cti o ns R e m o v e d P er P arti es' A gr e e m e nt t o r e c o g ni z e t h at t h e e m p er or h a d b e c o m e “ h a bit u at e d ” t o t h e dr u g. 1 5 T h e Y o n g z h e n g E m p er or of C hi n a b a n n e d t h e i m p ort a n d s al e of o pi u m f or n o n -m e di ci n al us e i n 1 7 2 9 aft er r e c ei vi n g r e p orts t h at p e o pl e “ b e c o m e c orr u pt e d b y s m o ki n g it u ntil t h eir li v es c oll a ps e, t h eir f a mili es; li v eli h o o d v a nis h es, a n d n ot hi n g is l eft b ut tr o u bl e. ” 1 6 His gr a n ds o n, t h e Qi a nl o n g E m p er or, b a n n e d o pi u m o utri g ht i n 1 7 9 9, a n d t h eir s u c c ess ors f o u g ht t w o c ostl y a n d u ns u c c essf ul w ars a g ai nst t h e Britis h E m pir e j ust t o k e e p t h e dr u g o ut of C hi n a. 1 0 5. I n t his c o u ntr y, t h e d a n g ers of o pi at e dr u gs w er e a p p ar e nt e n o u g h b y 1 9 0 8 f or Pr esi d e nt T h e o d or e R o os e v elt t o a p p oi nt a n O pi u m C o m missi o n er of t h e U nit e d St at es, w h o st at e d t h at o pi u m w as “t h e m ost p er ni ci o us dr u g k n o w n t o h u m a nit y. ” 1 7 I n 1 9 1 4, C o n gr ess b a n n e d t h e n o n- m e di ci n al us e of o pi u m, a n d i n 1 9 2 4 it b a n n e d h er oi n e ntir el y. W h e n n ati o n al dr u g l a ws w er e m o d er ni z e d i n t h e C o ntr oll e d S u bst a n c es A ct of 1 9 7 0, a fi v e -ti er s yst e m of S c h e d ul es t o r a n k t h e d a n g er o us n ess of p h ar m a c e uti c als w as est a blis h e d . S c h e d ul e I dr u gs w er e b a n n e d e ntir el y. O pi at e dr u gs w er e pl a c e d i n S c h e d ul e II, i n di c ati n g a “ hi g h p ot e nti al f or a b us e ” t h at c o ul d “l e a d t o s e v er e ps y c h ol o gi c al or p h ysi c al d e p e n d e n c e. ” 1 0 6. B y t h at ti m e, n e arl y 5 0 y e ars a g o, t h e s p e cifi c c h e mi c al pr o c ess es t h at cr e at e t h e ris ks i n h er e nt i n o pioi d us e h a d b e e n dis c o v er e d b y r es e ar c h ers. Si n c e t h e n, t h er e h as b e e n n o dis p ut e t h at o pi oi ds h a v e a u ni q u e a bilit y t o att a c h t o s p e ci al r e c e pt ors i n t h e br ai n a n d s pi n e t h at tri g g er a t e m p or ar y st at e of e u p h ori a. W h e n t h e eff e ct w e ars off, t h e d esir e t o bri n g it b a c k— b y t a ki n g t h e dr u g a g ai n— i n e vit a bl y s ets i n. B ut r e p e at e d us e of o pi oi ds l e a ds t o t ol er a n c e: t h e n e e d t o t a ke e v er hi g h er d os es t o a c hi e v e t h e s a m e e u p h ori c eff e ct, as t h e b o d y d ef e nsi v el y pr o d u c es 15 16 17 Afri c a, T., T h e O pi u m A d di cti o n of M ar c us A ur eli us , 2 2 J. Hist. I d e as 9 7-1 0 2 ( 1 9 6 1). Fr a n k Di k ött er et al., N ar c oti c C ult ur e: A Hist or y of Dr u gs i n C hi n a 3 3 -3 6 ( 2 0 0 4). E d w ar d M ars h all, U n cl e S a m is t h e W orst Dr u g Fi e n d i n t h e W orl d , N. Y. Ti m es, M ar. 1 2, 1 9 1 1. 27 34 of 258 INDEX NO. 400016/2018 FILED: SUFFOLK COUNTY CLERK 04/11/2019 11:19 AM NYSCEF DOC. NO. 19 RECEIVED NYSCEF: 04/11/2019 V ersi o n D at e d A pr. 1 0, 2 0 1 9 wit h C ert ai n R e d a cti o ns R e m o v e d P er P arti es' A gr e e m e nt m or e a n d m or e of a sti m ul ati n g c h e mi c al c all e d n or a dr e n ali n e t o c o u nt er a ct t h e s e d ati n g eff e cts of t h e o pi oi ds. On c e t ol er a n c e s ets i n, p h ysi c al wit h dr a w al a n d d e p e n d e n c e c o m e wit h it, b e c a us e w h e n t h e o pi oi ds l e a v e t h e b o d y, t h e e x c ess n or a dr e n ali n e r e m ai ns, c a usi n g jitt ers, a n xi et y, m us cl e cr a m ps, a n d di arr h e a .1 8 1 0 7. As a r es ult of t his p o w erf ul c o m bi n ati o n of p h ysi c al a n d ps y c h o a cti v e r e a cti o n s, a n y o n e w h o us es o pi oi ds , e v e n f or a s h ort ti m e, m a y d e v el o p o pi oi d us e dis or d er, c o m m o nl y k n o w n as a d di cti o n .1 9 O pi oi d us e dis or d er is a c o n diti o n i n w hi c h t h e br ai n lit er all y c h a n g es — pr efr o nt al r e g ul at or y cir c uits ar e i m p air e d , a n d n or m al r e w ar d a n d e m oti o n al r es p o ns e m e c h a nis ms s k e w e d — m a ki n g it e xtr a or di n aril y diffi c ult f or t h e p e o pl e it aff e cts t o v ol u nt aril y r e d u c e t h eir dr u g- t a ki n g b e h a vi or, d es pit e k n o wi n g t h e p ot e nti all y c at astr o p hi c c o ns e q u e n c es. 2 0 1 0 8. U ntil t h e mi d - 1 9 9 0’s, a w ar e n ess of t h es e pr o v e n ris ks of o pi oi d us e a m o n g t h e est a blis h e d m e di c al a n d s ci e ntifi c c o m m u niti es k e pt t h e pr es cri pti o n of o pi oi ds ti g htl y r estri ct e d t o a r el ati v el y n arr o w p o p ul ati o n of p ati e nts f or w h o m t h e b e n efits w er e d e e m e d t o o ut w ei g h t h e d a n g ers, s u c h as p e o pl e b attli n g c a n c er or a d v a n c e d HI V, or i n e n d - of-lif e c ar e. B ut t h at w as a b o ut t o c h a n g e, w h e n t h e c o m p a n y t h at m a d e t h e g ol d-st a n d ar d dr u g f or t h es e ni c h e us es f a c e d t h e e x pir ati o n of its p at e nt, wit h gri m c o ns e q u e n c es f or N e w Y or k ers a n d t h e n ati o n. 18 S e e T h o m as R. K ost e n & T o n y P. G e or g e, T h e N e ur o bi ol o g y of O pi oi d D e p e n d e n c e: I m pli c ati o ns f or Tr e at m e nt , S ci e n c e & Pr a cti c e P ers p e cti v es 1 3 -2 0 (J ul y 2 0 0 2), a v ail a bl e at htt ps:// w w w. n c bi. nl m. ni h. g o v/ p m c/ arti cl es/ P M C 2 8 5 1 0 5 4 /. 19 H o w O pi oi d A d di cti o n O c c urs , M a y o Cli ni c ( F e b. 1 6, 2 0 1 8), htt ps:// w w w. m a y o cli ni c. or g/ dis e as es c o n diti o ns/ pr es cri pti o n -dr u g - ab us e/i n -d e pt h/ h o w -o pi oi d -a d di cti o n -o c c urs/ art -2 0 3 6 0 3 7 2 (l ast visit e d M ar. 2 5, 2 0 1 9) ; N or a D. V ol k o w & T h o m as M c L ell a n, O pi oi d A b us e i n C hr o ni c P ai n – Mis c o n c e pti o ns a n d Miti g ati o n Str at e gi es , 3 7 4 N e w E n gl. J. M e d. 1 2 5 3 ( 2 0 1 6), a v ail a bl e at htt ps:// w w w n ej m . or g/ d oi/f ull/ 1 0. 1 0 5 6/ N EJ Mr a 1 5 0 7 7 7 1 ( c h art 1). 20 N. D. V ol k o w et al., N e ur o bi ol o gi c A d v a n c es fr o m t h e Br ai n Dis e as e M o d el of A d di cti o n , 3 7 4 N e w E n g. J. M e d. 3 6 3 ( 2 0 1 6), a v ail a bl e at htt ps:// w w w n c bi. nl m ni h. g o v/ p m c/ arti cl es/ P M C 6 1 3 5 2 5 7 . 28 35 of 258 INDEX NO. 400016/2018 FILED: SUFFOLK COUNTY CLERK 04/11/2019 11:19 AM NYSCEF DOC. NO. 19 RECEIVED NYSCEF: 04/11/2019 V ersi o n D at e d A pr. 1 0, 2 0 1 9 wit h C ert ai n R e d a cti o ns R e m o v e d P er P arti es' A gr e e m e nt 36 of 258 INDEX NO. 400016/2018 FILED: SUFFOLK COUNTY CLERK 04/11/2019 11:19 AM NYSCEF DOC. NO. 19 RECEIVED NYSCEF: 04/11/2019 V ersi o n D at e d A pr. 1 0, 2 0 1 9 wit h C ert ai n R e d a cti o ns R e m o v e d P er P arti es' A gr e e m e nt 37 of 258 INDEX NO. 400016/2018 FILED: SUFFOLK COUNTY CLERK 04/11/2019 11:19 AM NYSCEF DOC. NO. 19 1 1 4. t he RECEIVED NYSCEF: 04/11/2019 V ersi o n D at e d A pr. 1 0, 2 0 1 9 wit h C ert ai n R e d a cti o ns R e m o v e d P er P arti es' A gr e e m e nt T o m a k e H C Ps f e el c o mf ort a bl e pr es cri bi n g d a n g er o usl y hi g h d os a g es of o pi oi ds, M a n uf a ct ur er D ef e n d a nts r e p e at e dl y i n v o k e d a n o v er ar c hi n g m yt h of a n “ e pi d e mi c ” of u ntr e at e d p ai n i n A m eri c a i n w hi c h as m a n y as 1 0 0 milli o n a d ults w er e all e g e dl y s uff eri n g sil e ntl y. T h e tr ut h is t h at i n di vi d u als wit h s e v er e c hr o ni c p ai n — w h o d es er v e t h e s af e a n d eff e cti v e tr e at m e nt t h at c a n b e a c c o m plis h e d i n m ost c as es wit h o ut o pi oi ds — ar e f ar f e w er i n n u m b er 2 5 a n d r e pr es e nt pri n ci p all y a pr ofit c e nt er f or t h e o pi oi d i n d ustr y. B ut t his li e w as j ust t h e ti p of t h e i c e b er g i n t h e c o m pl e x w e b of d e c eit t h at w as t o c o m e. 1 1 5. O v er t h e f oll o wi n g t w o d e c a d es, t h e M a n uf a ct ur er D ef e n d a nts d e v el o p e d a t hr e e - p art pl a y b o o k f or t h eir fr a u d ul e nt s c h e m e : (i) c o nj ur e u p n o f e w er t h a n t e n s e p ar at e c at e g ori es of d e c e pti v e st ate m e nts a b o ut t h e us e of o pi oi ds; (ii) us e t h os e li es i n hi g h -fr e q u e n c y “ d et aili n g ” s al es c alls t o s us c e pti bl e H C Ps, a d v e rtis e m e nts, a n d dis c o u nt c ar d pr o gr a ms t o pr o m ot e t h eir br a n d e d o pi oi d f or m ul ati o ns; a n d (iii) s pr e a d t h os e li es t hr o u g h o ut t h e h e alt h -c ar e c o m m u nit y b y usi n g c o o pt e d, p ai d -off d o ct ors (t h e K O Ls) t o s e cr etl y s p o ns or p h o n y C M Es a n d Fr o nt Gr o u ps t h at br o a dly t ar g et e d u n witti n g H C P’s a n d e v e n t h e m ost v ul n er a bl e p ati e nt p o p ul ati o ns. 1 1 6. T h e M a n uf a ct ur er D ef e n d a nts h a v e c oll e cti v el y s p e nt billi o ns of d oll ars o n t his fr a u d ul e nt m ar k eti n g c a m p ai g n o v er t h e l ast t w o d e c a d es. I n 2 0 0 0, t h e M a n uf a ct ur er D ef e n d a nts’ c o m bi n e d a n n u al s p e n di n g o n o pi oi ds m ar k eti n g w as $ 9 1 milli o n. B y 2 0 1 1, t h at fi g ur e h a d cli m b e d t o al m ost $ 3 0 0 milli o n a n n u all y, i n cl u di n g $ 1 4 2 milli o n b y J a nss e n a n d $ 1 1 0 milli o n b y P ur d u e. I n cl u d e d i n t h es e fi g ur es w er e p a y m e nts dir e ctl y t o i n di vi d u al pr es cri b ers i n N e w Y or k: f r o m A u g ust 2 0 1 3 t hr o u g h D e c e m b er 2 0 1 5 al o n e, t h e y c oll e cti v el y p ai d m or e t h a n $ 3. 5 milli o n t o al m ost Ci n d y St ei n b er g, N at’l Dir. of P oli c y & A d v o c a c y, U. S. P ai n F o u n d., Pr e p ar e d T esti m o n y f or S e n at e H E L P C o m mitt e e H e ari n g o n “ M a n a gi n g P ai n D uri n g t h e O pi oi d Crisis ” ( F e b. 1 2, 2 0 1 9) a v ail a bl e at htt ps:// w w w. h el p.s e n at e. g o v/i m o/ m e di a/ d o c/ St ei n b er g. p df ( citi n g 5 0 milli o n p e o pl e). 25 31 38 of 258 INDEX NO. 400016/2018 FILED: SUFFOLK COUNTY CLERK 04/11/2019 11:19 AM NYSCEF DOC. NO. 19 RECEIVED NYSCEF: 04/11/2019 V ersi o n D at e d A pr. 1 0, 2 0 1 9 wit h C ert ai n R e d a cti o ns R e m o v e d P er P arti es' A gr e e m e nt 39 of 258 INDEX NO. 400016/2018 FILED: SUFFOLK COUNTY CLERK 04/11/2019 11:19 AM NYSCEF DOC. NO. 19 1 1 9. RECEIVED NYSCEF: 04/11/2019 V ersi o n D at e d A pr. 1 0, 2 0 1 9 wit h C ert ai n R e d a cti o ns R e m o v e d P er P arti es' A gr e e m e nt T o u p e n d t his h ar d r e alit y, t h e M a n uf a ct ur er D ef e n d a nts t ur n e d t o a o n e - p ar a gr a p h l ett er t o t h e e dit or fr o m Dr. H ers h el Ji c k a n d J a n e P ort er p u blis h e d i n t h e N e w E n gl a n d J o ur n al of M e di ci n e ( “N EJ M ”) i n 1 9 8 0 (t h e “P ort er/Ji c k l ett er ”), w hi c h c o n cl u d e d t h at “th e d e v el o p m e nt of a d di cti o n is r ar e i n m e di c al p ati e nts wit h n o hist or y of a d di cti o n. ”2 9 T h e l ett er— w hi c h w as n ot p e er r e vi e w e d — dr e w t his c o n cl usi o n fr o m a r e vi e w of t h e r e c or ds of p ati e nts w h o w er e gi v e n s m all, s h ort -t er m d os es of o pi oi ds t o tr e at a c ut e p ai n i n t h e c o ntr oll e d s etti n g of a n a c a d e mi c h os pit al .3 0 Dr. Ji c k l at er n ot e d t h at h e wr ot e a l ett er b e c a us e t h e d at a w er e n ot r o b ust e n o u g h t o b e p u blis h e d as a st u d y. 3 1 et al., S u bst a n c e Us e Dis or d ers i n a Pri m ar y C ar e S a m pl e R e c ei vi n g D ail y O pi oi d T h er a p y, J. P ai n 5 7 3– 8 2 (J ul y 2 0 0 7). 29 J a n e P ort er & H ers c h el Ji c k, A d di cti o n R ar e i n P ati e nts Tr e at e d wit h N ar c oti cs , 3 0 2 N e w E n g. J. M e d. 1 2 3 (1 9 8 0); P a m el a L e u n g, A 1 9 8 0 L ett er o n t h e Ris k of O pi oi d A d di c ti o n, 3 7 6 N e w E n g. J. M e d. 2 1 9 4 ( 2 0 1 7), a v ail a bl e at htt p:// w w w n ej m. or g/ d oi/ p df/ 1 0. 1 0 5 6/ N EJ M 1 9 8 0 0 1 1 0 3 0 2 0 2 2 1. 30 H arris o n J a c o bs, T his O n e -P ar a gr a p h L ett er m a y h a v e L a u n c h e d t h e O pi oi d E pi d e mi c , B usi n ess I nsi d er, M a y 2 6, 2 0 1 6, a v ail a bl e at htt ps:// w w w. b usi n essi nsi d er. c o m/ p ort er -a n d -ji c k-l ett er-l a u n c h e d-t h e-o pi oi d -e pi d e mi c -2 0 1 6 - 5. 31 B arr y M ei er, P ai n Kill er: A n E m pir e of D e c eit a n d t h e Ori gi n of A m eri c a’s O pi oi d E pi d e mi c 1 7 4 ( 2 d E d. 2 0 1 8). 33 40 of 258 INDEX NO. 400016/2018 FILED: SUFFOLK COUNTY CLERK 04/11/2019 11:19 AM NYSCEF DOC. NO. 19 1 2 0. RECEIVED NYSCEF: 04/11/2019 V ersi o n D at e d A pr. 1 0, 2 0 1 9 wit h C ert ai n R e d a cti o ns R e m o v e d P er P arti es' A gr e e m e nt T he M a n uf a ct ur er D ef e n d a nts n e v ert h el ess e xt e nsi v el y r eli e d o n t his l ett er i n pr o m oti o n al a n d e d u c ati o n al m at eri als t o s u p p ort t h e li e t h at o pi oi ds p os e d a l o w ris k of a d di cti o n.3 2 “ B ut t h at’s n ot i n a n y s h a p e or f or m w h at w e s u g g est e d, ” Dr. Ji c k l at er l a m e nt e d.3 3 1 2 1. T h e e n or m o us i m p a ct of h o w t h e D ef e n d a nts “ gr ossl y misr e pr es e nt e d ” t h e P ort er/Ji c k l ett er w as d o c u m e nt e d i n a n ot h er l ett er t o N EJ M: [ W] e f o u n d t h at a fi v e-s e nt e n c e l ett er p u blis h e d i n t h e J o ur n al i n 1 9 8 0 w as h e a vil y a n d u n criti c all y cit e d as e vi d e n c e t h at a d di cti o n w as r ar e wit h l o n g -t erm o pi oi d t h er a p y. W e b eli e v e t h at t his cit ati o n p att er n c o ntri b ut e d t o t h e N ort h A m eri c a n o pi oi d crisis b y h el pi n g t o s h a p e a n arr ati v e t h at all a y e d pr es cri b ers’ c o n c er ns a b o ut t h e ris k of a d di cti o n ass o ci at e d wit h l o n g-t er m o pi oi d t h er a p y . . . 3 4 “It’s di ffi c ult t o o v erst at e t h e r ol e of t his l ett er, ” s ai d Dr. D a vi d J u urli n k of t h e U ni v ersit y of T or o nt o, w h o l e d t h e a n al ysis. “It w as t h e k e y bit of lit er at ur e t h at h el p e d t h e o pi at e m a n uf a ct ur ers c o n vi n c e fr o nt -li n e d o ct ors t h at a d di cti o n is n ot a c o n c er n. ”3 5 2. Mis r e p r es e nt ati o n # 2: Si g ns o f A d di cti v e B e h a vi o r a r e “ Ps e u d o a d di cti o n, ” P ot e nti all y R e q ui ri n g M o r e O pi oi ds 1 2 2. T he M a n uf a ct ur er D ef e n d a nts i nstr u ct e d p ati e nts a n d pr es cri b ers t h at si g ns of a d di cti o n ar e a ct u all y i n di c ati o ns of u ntr e at e d p ai n, a n d t h at t h e ap pr o pri at e r es p o ns e w a s t o pr es cri b e e v e n m or e o pi oi ds. Dr. D a vi d H a d d o x, w h o l at er b e c a m e a s e ni or me di c al d ir e ct or f or P ur d u e, p u blis h e d a st u d y i n 1 9 8 9 i n v e nti n g t h e t er m “ ps e u d o a d di cti o n, ” w hi c h h e c h ar a ct eri z e d as “t h e i atr o g e ni c s y n dr o m e of a b n or m al b e h a vi or d e v el o pi n g as a dir e ct c o ns e q u e n c e of i n a d e q u at e P ort er & Ji c k, s u pr a n ot e 2 9. T a yl or H a n e y & A n dr e a Hs u, D o ct or W h o Wr ot e 1 9 8 0 L ett er o n P ai n kill ers , N P R, J u n e 1 6, 2 0 1 7, a v ail a bl e at htt ps:// w w w n pr. or g/s e cti o ns/ h e alt h -s h ots/ 2 0 1 7/ 0 6/ 1 6/ 5 3 3 0 6 0 0 3 1/ d o ct or -w h o -wr ot e -1 9 8 0 -l ett er-o n -p ai n kill ers r e gr ets-t h at-it-f e d-t h e-o pi oi d -crisi . 34 M ei er, s u pr a n ot e 3 1, at 1 7 4. 35 P ort er & Ji c k, s u pr a n ot e 2 9. 32 33 34 41 of 258 INDEX NO. 400016/2018 FILED: SUFFOLK COUNTY CLERK 04/11/2019 11:19 AM NYSCEF DOC. NO. 19 RECEIVED NYSCEF: 04/11/2019 V ersi o n D at e d A pr. 1 0, 2 0 1 9 wit h C ert ai n R e d a cti o ns R e m o v e d P er P arti es' A gr e e m e nt p ai n m a n a g e m e nt. ” 3 6 I n ot h er w or ds, p ati e nts o n pr es cri pti o n o pi oi ds w h o e x hi bit e d cl assi c si g ns of a d di cti o n — f or e x a m pl e, as ki n g f or m or e a n d hi g h er d os es of o pi oi ds, s elf-es c al ati n g t h eir d os es, or cl ai mi n g t o h a v e l ost pr es cri pti o ns i n or d er t o g et m or e o pi oi ds — w er e n ot a d di ct e d, b ut r at h er si m pl y s uff eri n g fr o m u n d ertr e at m e nt of t h eir p ai n. 1 2 3. A c c or di n g t o t his h y p ot h esis, w hi c h h as n e v er b e e n s ci e ntifi c all y v ali d at e d , dr u g- s e e ki n g b e h a vi ors c o nsist e nt wit h a d di cti o n i n m a n y c as es r e pr es e nt “l e giti m at e ” eff orts t o o bt ai n m or e o pi oi ds f or a d e q u at e tr e at m e nt of p ai n — t h us t h e t er m “ ps e u d o a d di cti o n. ” O pi oi d m a n uf a ct ur ers , i n diss e mi n ati n g t h e ps e u d o a d di cti o n m yt h , t ol d pr o vi d ers t h at p ati e nts m a y e x hi bit dr u g- s e e ki n g b e h a vi ors b e c a us e “ o pi oi ds ar e fr e q u e ntl y pr es cri b e d i n d os es t h at ar e i n a d e q u at e. ” 1 2 4. T h e c o n c e pt of “ ps e u d o a d di cti o n ” s e e mi n gl y-i n d e p e n d e nt K O Ls was mis us e d. s h o ws h o w r es e ar c h p erf or m e d b y t h e A 2 0 1 5 i n v esti g ati v e r e vi e w f o u n d t h at w hil e ps e u d o a d di cti o n w as dis c uss e d i n 2 2 4 m e di c al -j o ur n al arti cl es i n pri or y e ars, o nl y 1 8 of t h os e arti cl es dis c uss e d its v ali dit y, i n cl u di n g f o ur arti cl es s u p p orti n g t his fi ctiti o us di a g n osis t h at w er e f u n d e d b y p h ar m a c e uti c al c o m p a ni es.3 7 T h e r e m ai ni n g 2 0 0 + arti cl es st a n d as a t est a m e nt t o t h e eff e cti v e n ess of t his p arti c ul ar li e , i n t h at t h e y all cit e d t h e c o n c e pt of “ ps e u d o a d di cti o n ” “ as a m att er of r o uti n e a c c e pt a n c e ” d es pit e n o e m piri c al e vi d e n c e s u p p orti n g t h e t h e or y .3 8 1 2 5. T h e C D C G ui d eli n e h as n e v er r e c o m m e nd e d gi vi n g m or e o pi oi ds t o p ati e nts s h o wi n g si g ns of a d di cti o n. E v e n Dr. L y n n W e bst er, a K O L dis c uss e d b el o w, a d mitt e d t h at D a vi d E. W eiss m a n & J. D a vi d H a d d o x, O pi oi d Ps e u d o a d di cti o n — a n I atr o g e ni c S y n dr o m e , 3 6 P ai n 3 6 3-6 6 ( M ar. 1 9 8 9), a v ail a bl e at htt ps:// w w w. n c bi. nl m. ni h. g o v/ p u b m e d/ 2 7 1 0 5 6 5 ( “I atr o g e ni c ” d es cri b es a c o n diti o n i n d u c e d b y m e di c al tr e at m e nt). 37 M ari o n S. Gr e e n & R. A n dr e w C h a m b ers, Ps e u d o a d di cti o n: F a ct or Fi cti o n ? A n I n v esti g ati o n of t h e M e di c al Lit er at ur e , C urr e nt A d di cti o n R e ps. 3 1 0-3 1 7 ( 2 0 1 5). 38 I d.; Of t h e 2 2 arti cl es i n t h e c o m bi n e d gr o u p t h at dis cl os e d f u n di n g fr o m dr u g m a k ers, t h e a ut h ors i d e ntifi e d P ur d u e as a s p o ns or i n ni n e . 36 35 42 of 258 INDEX NO. 400016/2018 FILED: SUFFOLK COUNTY CLERK 04/11/2019 11:19 AM NYSCEF DOC. NO. 19 RECEIVED NYSCEF: 04/11/2019 V ersi o n D at e d A pr. 1 0, 2 0 1 9 wit h C ert ai n R e d a cti o ns R e m o v e d P er P arti es' A gr e e m e nt ps e u d o a d di cti o n “is alr e a d y s o m et hi n g w e ar e d e b u n ki n g as a c o n c e pt ” a n d b e c a m e “t o o m u c h of a n e x c us e t o gi v e p ati e n ts m or e m e di c ati o n. It l e d us d o w n a p at h t h at c a us e d h ar m. ” 3 9 3. Mis r e p r es e nt ati o n # 3: T h e Ris k o f A d di cti o n C a n B e E asil y I d e ntifi e d a n d M a n a ge d 1 2 6. W hil e c o nti n ui n g t o m ai nt ai n t h at m ost p ati e nts ar e at l o w ris k f or a d di ct i o n, t h e M a n uf a ct ur er D ef e n d a nts ass er te d t h at f or t h e s us c e pti bl e f e w, H C Ps c o ul d eff e cti v el y i d e ntif y a n d m a n a g e t h e ris k. T h e y pr o m ot e d s cr e e ni n g t o ols , li k e q u esti o n n air es, t h at tr y t o i d e ntif y p ati e nts wit h a d di cti o n ris ks (s u c h as p ers o n al or f a mil y hist ori es of s u bst a n c e us e, m e nt al ill n ess, or tr a u m a) t o m a k e H C Ps f e el li k e t h e y k n e w w hi c h s m all n u m b er of p ati e nts t h e y h a d t o cl os el y m o nit or, t h er e b y m a ki n g t h e m m or e c o mf ort a bl e pr es cri bi n g t h e m t o e v er y o n e els e. 1 2 7. O n e pr o mi n e nt K O L w h o r e c ei v e d milli o ns of d oll ars fr o m t h e M a n uf a ct ur er D ef e n d a nts, Dr. L y n n W e bst er ,4 0 d e v el o p e d t h e O pi oi d Ris k T o ol ( “ O R T ”) s cr e e ni n g t est, a fi v e q u esti o n s elf-r e p ort e d p ati e nt q u esti o n n air e t h at t h e M a n uf a ct ur er D ef e n d a nts d e c e pti v el y r e pr es e nt e d c o ul d a c c ur at el y pr e di ct t h e ris k of a d di cti o n. 4 1 1 2 8. B ut t h er e is n o r eli a bl e s ci e ntifi c e vi d e n c e t h at d o ct ors c a n d e p e n d o n t h e s cr e e ni n g t o ols c urr e ntl y a v ail a bl e t o m at eri all y li mit t h e ris k of a d di cti o n. Th er e is als o n o r eli a bl e s ci e ntifi c e vi d e n c e t h at hi g h -ris k p ati e nts i d e ntifi e d t hr o u g h s cr e e ni n g c a n t a k e o pi oi ds l o n g-t er m wit h o ut tri g g eri n g a d di cti o n, e v e n wit h e n h a n c e d m o nit ori n g. A n d t h er e is n o r eli a bl e s ci e ntifi c e vi d e n c e J o h n F a u b er, C hr o ni c P ai n F u els B o o m i n O pi oi ds , M e d P a g e T o d a y, F e b. 1 9, 2 0 1 2, a v ail a bl e at htt ps:// w w w m e d p a g et o d a y. c o m/ n e ur ol o g y/ p ai n m a n a g e m e nt/ 3 1 2 5 4 . 40 O p e n P a y m e nts D at a, s u pr a n ot e 2 6. 41 L. W e bst er & R. W e bst er, Pr e di cti n g A b err a nt B e h a vi ors i n O pi oi d -Tr e at e d P ati e nts: Pr eli mi n ar y V ali d ati o n of t he O pi oi d Ris k T o ol, P ai n M e di ci n e 432–442 ( N o v. 2 0 0 5), a v ail a bl e at htt ps:// a c a d e mi c. o u p. c o m/ p ai n m e di ci n e/ arti cl e/ 6/ 6/ 4 3 2/ 1 8 5 3 9 8 2 . 39 36 43 of 258 INDEX NO. 400016/2018 FILED: SUFFOLK COUNTY CLERK 04/11/2019 11:19 AM NYSCEF DOC. NO. 19 RECEIVED NYSCEF: 04/11/2019 V ersi o n D at e d A pr. 1 0, 2 0 1 9 wit h C ert ai n R e d a cti o ns R e m o v e d P er P arti es' A gr e e m e nt t h at p ati e nts w h o ar e n ot i d e ntifi e d t hr o u g h s u c h s cr e e ni n g c a n t a k e o pi oi ds l o n g-t er m wit h o ut si g nifi c a nt d a n g er of a d di cti o n. 4 2 4. Mis r e p r es e nt ati o n # 4: O pi oi d Wit h d r a w al C a n B e A v oi d e d b y T a p e ri n g 1 2 9. I n a n eff ort t o d o w n pl a y t h e ris k a n d i m p a ct of a d di cti o n, t h e M a n uf a ct ur er D ef e n d a nts cl ai m e d t h at p h ysi c al d e p e n d e n c e is t ot all y s e p ar at e fr o m a d di cti o n, a n d t h at t h e s y m pt o ms of o pi oi d wit h dr a w al c a n b e e asil y a d dr ess e d b y gr a d u all y t a p eri n g p ati e nts’ d os es as t h e y ar e t a k e n off t h e dr u gs.4 3 B ut t h er e w as n o s ci e ntifi c s u p p ort f or t his cl ai m, a n d t a p eri n g ( ess e nti all y “ c utti n g d o w n, ” b ut still usi n g t h e s a m e dr u g) h as n e v er b e e n r e c o m m e n d e d or r e c o g ni z e d b y a n y l e giti m at e m e di c al or a d di cti o n pr of essi o n als as a r es p o nsi bl e or eff e cti v e w a y t o h el p t h os e w h o h a v e d e v el o p e d a n o pi at e us e dis or d er o v er c o m e t h e p h ysi c al c o ns e q u e n c es of wit h dr a w al. 5. Mis r e p r es e nt ati o n # 5: O pi oi d D os es C a n B e I n c r e as e d wit h o ut Li mits o r G r e at e r Ris ks 1 3 0. T h e M a n uf a ct ur er D ef e n d a nts i nstr u ct e d H C Ps t h at t h e y c o ul d s af el y i n cr e as e p ati e nts’ o pi oi d d os e s wit h o ut ris k i n or d er t o a c hi e v e p ai n r eli ef, d e c e pti v el y o mitt i n g w ar ni n gs of k n o w n, i n cr e as e d a d v ers e eff e cts t h at o c c ur at hi g h er d os es, a n d t h e s pir al of pr o bl e ms c a us e d b y t ol er a n c e t o t h e dr u gs. 1 3 1. F or e x a m pl e, a 2 0 1 1 st u d y r e p ort e d t h at d os a g es of o pi oi ds ( e x pr ess e d i n m or p hi n e milli gr a m e q ui v al e nts , or “ M M Es ”) of 1 0 0 M M E or m or e w er e ass o ci at e d wit h dr a m ati c i n cr e a s es S e e A g e n c y f or H e alt h c ar e R es e ar c h a n d Q u alit y, T h e Eff e cti v e n ess a n d Ris ks of L o n g -T er m O pi oi d Tr e at m e nt of C hr o ni c P ai n 1, 2 1 ( S e pt. 2 0 1 4), a v ail a bl e at htt ps:// eff e cti v e h e alt h c ar e. a hr q. g o v/sit es/ d ef a ult/fil es/ p df/ c hr o ni c -p ai n o pi oi d -tr e at m e nt _r es e ar c h. p df. 43 Is T h er e a Diff er e n c e B et w e e n P h ysi c al D e p e n d e n c e a n d A d di cti o n ? , N at’l I nstit ut e o n Dr u g A b us e (J a n. 2 0 1 8), htt ps:// w w w. dr u g a b us e. g o v/ p u bli c ati o ns/ pri n ci pl es -dr u g -a d di cti o n -tr e at m e nt-r es e ar c h-b as e d -g ui d e -t hir de diti o n/fr e q u e ntl y -as k e d -q u esti o ns/t h er e -diff er e n c e -b et w e e n -p h ysi c al -d e p e n d e n c e (l ast visit e d M ar. 2 5, 2 0 1 9) . 42 37 44 of 258 INDEX NO. 400016/2018 FILED: SUFFOLK COUNTY CLERK 04/11/2019 11:19 AM NYSCEF DOC. NO. 19 RECEIVED NYSCEF: 04/11/2019 V ersi o n D at e d A pr. 1 0, 2 0 1 9 wit h C ert ai n R e d a cti o ns R e m o v e d P er P arti es' A gr e e m e nt i n o v er d os e r at es.4 4 A st u d y of v et er a ns fr o m 2 0 0 4 t o 2 0 0 9 f o u n d t h e r at e of o v er d os e d e at hs is dir e ctl y r el at e d t o m a xi m u m d ail y d os e of o pi oi ds, wit h a m e a n f at al d os e of 9 8 M M E. 4 5 Ot h er st u di es s h o w t h at a m o n g p ati e nts w h o r e c ei v e a n i niti al t e n -d a y o pi oi d pr es cri pti o n, o n e i n fi v e will still b e o n o pi oi ds aft er o n e y e ar. 4 6 Al m ost h alf of t h os e w h o r e c ei v e a n i niti al 3 0 -d a y s u p pl y of o pi oi ds will still b e o n t h e m aft er a y e ar. 4 7 1 3 2. T h e C D C G ui d eli n e st at es t h at d u e t o l a c k of e vi d e n c e of b e n efits of o pi oi ds f or c hr o ni c n o n -c a n c er p ai n b e y o n d t hr e e m o nt hs 4 8 a n d t h e “i n cr e as e d ris k f or s eri o us h ar ms r el at e d t o l o n g-t er m o pi oi d t h er a p y t h at a p p e ars t o b e d os e- d e p e n d e nt, ” 4 9 H C Ps s h o ul d li mit o pi oi d pr es cri bi n g t o t hr e e m o nt hs ( u nl ess b e n efits o ut w ei g h h ar ms) a n d “ a v oi d i n cr e asi n g d os es ” a b o v e 9 0 M M E. 5 0 6. Mis r e p r es e nt ati o n # 6: L o n g -T e r m O pi oi d Us e I m p r o v es F u n cti o ni n g 1 3 3. D es pit e s u bst a nti al e vi d e n c e s h o wi n g t h at o pi oi ds d o n ot i m pr o v e f u n cti o ni n g a n d w ors e n h e alt h , t h e M a n uf a ct ur er D ef e n d a nts c o nsist e ntl y a n d misl e a di n gl y pr o m ot e d o pi oi ds as c a p a bl e of i m pr o vi n g p ati e nts’ a bilit y t o f u n cti o n at h o m e a n d w or k a n d o v er all q u alit y of lif e , b e c a us e t h e y vi e w e d t h es e cl ai ms as a criti c al p art of t h eir m ar k eti n g str at e gi es. T o r e c ali br ate t h e 44 A m y S. B o h n ert et al., Ass o ci ati o n B et w e e n O pi oi d Pr es cri bi n g P att er ns a n d O pi oi d O v er d os e -R el at e d D e at hs , 3 0 5 J. A m. M e d. Ass’ n 1 3 1 5 – 2 1 ( 2 0 1 1). 45 A m y S. B o h n ert et al., A D et ail e d E x pl or ati o n I nt o t h e Ass o ci ati o n of Pr es cri b e d O pi oi d D os a g e a n d O v er d os e D e at hs A m o n g P ati e nts wit h C hr o ni c P ai n , 5 4 M e d. C ar e 4 3 5 ( M a y 2 0 1 6), a v ail a bl e at htt p://j o ur n als.l w w. c o m/l w w m e di c al c ar e/ A bstr a ct/ p u blis h a h e a d/ A _ D et ail e d _ E x pl or ati o n _I nt o _t h e _ Ass o ci ati o n _ of. 9 8 9 5 2. as p x (I n a n ati o n al s a m pl e of V et er a ns H e alt h A d mi nistr ati o n p ati e nts wit h c hr o ni c p ai n w h o w er e pr es cri b e d o pi oi ds, m e a n pr es cri b e d o pi oi d d os a g e a m o n g p ati e nts w h o di e d fr o m o pi oi d o v er d os e w as 9 8 M M E ( m e di a n 6 0 M M E) c o m p ar e d wit h m e a n pr es cri b e d o pi oi d d os a g e of 4 8 M M E ( m e di a n 2 5 M M E) a m o n g p ati e nts n ot e x p eri e n ci n g f at al o v er d os e). 46 A n uj S h a h et al., C h ar a ct eristi cs of I niti al Pr es cri pti o n E pis o d es a n d Li k eli h o o d of L o n g -T er m O pi oi d Us e — U nit e d St at es, 2 0 0 6 – 2 0 1 5 , 6 5 M or bi dit y & M ort alit y W kl y. R e p. 2 6 5 ( M ar. 2 0 1 7), a v ail a bl e at htt ps:// w w w. c d c. g o v/ m m wr/ v ol u m es/ 6 6/ wr/ m m 6 6 1 0 a 1 ht m ( Fi g ur e 1). 47 I d. 48 C D C G ui d eli n e, s u pr a n ot e 2 8, at 2. 49 I d. at 1 9. 50 I d. at 1 6. 38 45 of 258 INDEX NO. 400016/2018 FILED: SUFFOLK COUNTY CLERK 04/11/2019 11:19 AM NYSCEF DOC. NO. 19 RECEIVED NYSCEF: 04/11/2019 V ersi o n D at e d A pr. 1 0, 2 0 1 9 wit h C ert ai n R e d a cti o ns R e m o v e d P er P arti es' A gr e e m e nt ris k-b e n efit a n al ysis f or o pi oi ds, t h e M a n uf a ct ur er D ef e n d a nts f als el y t o ut e d n o n e xist e nt b e n efits of o pi oi d tr e at m e nt i n or d er t o o v er c o m e its k n o w n d a n g ers. 1 3 4. A 2 0 0 6 st u d y - of-st u di es f o u n d t h at o pi oi ds di d n ot pr o d u c e i m pr o v e m e nt i n f u n cti o n al o ut c o m es o v er ot h er n o n-a d di cti n g t r e at m e nts. T h e f e w l o n g er -t er m st u di es of o pi oi d us e h a d “ c o nsist e ntl y p o or r es ults, ” a n d “s e v er al st u di es h a v e s h o w e d t h at o pi oi ds f or c hr o ni c p ai n m a y a ct u all y w ors e n p ai n a n d f u n cti o ni n g . . . ” 51 al o n g wit h g e n er al h e alt h, m e nt al h e alt h, a n d s o ci al f u n cti o n. O v er ti m e, e v e n hi g h d os es of p ot e nt o pi oi ds oft e n f ail t o c o ntr ol p ai n, a n d p ati e nts e x p os e d t o s u c h d os es ar e u n a bl e t o f u n cti o n n or m all y. 1 3 5. A 2 0 0 8 st u d y p u blis h e d i n t h e j o ur n al S pi n e s h o w e d t h at p ati e nts pr es cri b e d o pi oi ds l o n g-t er m s uff er e d a d di cti o n t h at m a d e t h e m m or e li k el y t o b e dis a bl e d a n d u n a bl e t o w or k. 5 2 A n ot h er st u d y d e m o nstr at e d t h at i nj ur e d w or k ers w h o r e c ei v e d a pr es cri pti o n o pi oi d f or m or e t h a n s e v e n d a ys d uri n g t h e first si x w e e ks aft er t h e i nj ur y w er e 2. 2 ti m es m or e li k el y t o r e m ai n o n w or k dis a bilit y a y e ar l at er t h a n w or k ers wit h si mil ar i nj uri es w h o r e c ei v e d n o o pi oi ds at all. 5 3 1 3 6. A 2 0 1 2 st u d y p u blis h e d i n t h e J o ur n al of P ai n , w hi c h f oll o w e d 6 8, 0 0 0 w o m e n o v er t hr e e y e ars, f o u n d t h at p ati e nts w h o r e c ei v e d o pi oi d tr e at m e nt w er e l ess li k el y t o h a v e i m pr o v e m e nt i n p ai n, a n d h a d w ors e n e d f u n cti o n. T h o m as R. Fri e d e n & D e br a H o ur y, R e d u ci n g t h e Ris ks of R eli ef – T h e C D C O pi oi d - Pr es cri bi n g G ui d eli n e , 3 7 4 N e w E n g. J. M e d. 1 5 0 1, 1 5 0 3 ( 2 0 1 6). 52 J effr e y D ers h et al., Pr es cri pt i o n O pi oi d D e p e n d e n c e is Ass o ci at e d wit h P o or er O ut c o m es i n Dis a bli n g S pi n al Dis or d ers , 3 3 S pi n e 2 2 1 9-2 7 ( 2 0 0 8). 53 G ar y Fr a n kli n et al., E arl y O pi oi d Pr es cri pti o n a n d S u bs e q u e nt Dis a bilit y A m o n g W or k ers wit h B a c k I nj uri es: t h e Dis a bilit y Ris k I d e ntifi c ati o n St u d y C o h ort, 3 3 S pi n e 1 9 9, 2 0 1-0 2 ( 2 0 0 8). 51 39 46 of 258 INDEX NO. 400016/2018 FILED: SUFFOLK COUNTY CLERK 04/11/2019 11:19 AM NYSCEF DOC. NO. 19 1 3 7. RECEIVED NYSCEF: 04/11/2019 V ersi o n D at e d A pr. 1 0, 2 0 1 9 wit h C ert ai n R e d a cti o ns R e m o v e d P er P arti es' A gr e e m e nt I n 2 0 1 4, th e U. S. A g e n c y f or H e alt h c ar e R es e ar c h a n d Q u alit y c o n cl u d e d t h at “[ e] vi d e n c e o n l o n g -t er m o pi oi d t h er a p y f or c hr o ni c p ai n is v er y li mit e d b ut s u g g ests a n i n cr e as e d ris k of s eri o us h ar ms t h at a p p e ars t o b e d os e- d e p e n d e nt. ” 5 4 1 3 8. I n 2 0 1 6, t h e C D C c o n cl u d e d t h at “t h er e is n o g o o d e vi d e n c e t h at o pi oi ds i m pr o v e p ai n or f u n cti o n wit h l o n g -t er m us e,” 5 5 a n d t h at “[ w] hil e b e n efits f or p ai n r eli ef, f u n cti o n a n d q u alit y of lif e wit h l o n g -t er m o pi oi d us e f or c hr o ni c p ai n ar e u n c ert ai n, ris ks ass o ci at e d wit h l o n g t er m o pi oi d us e ar e cl e ar er a n d si g nifi c a nt. ” 5 6 A c c or di n g t o t h e C D C, “f or t h e v ast m aj orit y of p ati e nts, t h e k n o w n, s eri o us, a n d t o o -oft e n -f at al ris ks f ar o ut w ei g h t h e u n pr o v e n a n d tr a nsi e nt b e n efits [ of o pi oi ds f or c hr o ni c p ai n]. ” 5 7 1 3 9. T h e C D C als o st at e d t h at “[ n] o e vi d e n c e s h o ws a l o n g -t er m b e n efit of o pi oi ds i n p ai n a n d f u n cti o n v ers us n o o pi oi ds f or c hr o ni c p ai n wit h o ut c o m es e x a mi n e d at l e ast 1 y e ar l at er ( wit h m ost pl a c e b o-c o ntr oll e d r a n d o mi z e d tri als ≤ 6 w e e ks i n d ur ati o n), ” w hil e “[ e] xt e nsi v e e vi d e n c e s h o ws t h e p ossi bl e h ar ms of o pi oi ds (i n cl u di n g o pi oi d us e dis or d er, o v er d os e, a n d m ot or v e hi cl e i nj ur y). ” 5 8 1 4 0. T h e F o o d a n d Dr u g A d mi nistr ati o n ( “ F D A ”) h as r ej e ct e d as f als e a n d misl e a di n g cl ai ms t h at o pi oi ds i m pr o v e p ati e nts’ f u n cti o n a n d q u alit y of lif e if t h e y ar e n ot s u p p ort e d b y s u bst a nti al e vi d e n c e or cli ni c al e x p eri e n c e. F or e x a m pl e, i n 2 0 0 8, t h e F D A w ar n e d Ki n g P h ar m a c e uti c als t h at its st at e m e nt s a b o ut A vi n z a ( m or p hi n e s ulf at e E R) w er e f als e a n d misl e a di n g b e c a us e its cl ai ms t h at “ p ati e nts w h o ar e tr e at e d wit h t h e dr u g e x p eri e n c e a n i m pr o v e m e nt i n t h eir 54 55 56 57 58 A g e n c y f or H e alt h c ar e R es e ar c h a n d Q u alit y, s u pr a n ot e 4 1, at i x. C D C G ui d eli n e, s u pr a n ot e 2 8, at 2 0. I d. at 2, 1 8. Fri e d e n & H o ur y, s u pr a n ot e 5 1, at 1 5 0 3. C D C G ui d eli n e, s u pr a n ot e 2 8, at 1 5. 40 47 of 258 INDEX NO. 400016/2018 FILED: SUFFOLK COUNTY CLERK 04/11/2019 11:19 AM NYSCEF DOC. NO. 19 RECEIVED NYSCEF: 04/11/2019 V ersi o n D at e d A pr. 1 0, 2 0 1 9 wit h C ert ai n R e d a cti o ns R e m o v e d P er P arti es' A gr e e m e nt o v er all f u n cti o n, s o ci al f u n cti o n, a n d a bilit y t o p erf or m d ail y a cti viti es ” w er e n ot d e m o nstr at e d b y s u bst a nti al e vi d e n c e or s u bst a nti al cli ni c al e x p eri e n c e. 5 9 1 4 1. I n 2 0 1 0, t h e F D A w ar n e d All er g a n t h at its cl ai ms t h at its o pi oi d K a di a n ( m or p hi n e E R) i m pr o v e d f u n cti o ni n g w er e f als e a n d misl e a di n g: [ W] e ar e n ot a w ar e of s u bst a nti al e vi d e n c e or s u bst a nti al cli ni c al e x p eri e n c e d e m o nstr ati n g t h at t h e m a g nit u d e of t h e eff e ct t h e dr u g h as i n all e vi ati n g p ai n, t a k e n t o g et h er wit h a n y dr u g -r el at e d si d e eff e cts p ati e nts m a y e x p eri e n c e (s u c h as t h e c o m m o n a d v ers e e v e nts of dr o wsi n ess, di z zi n ess, c o nsti p ati o n a n d n a us e a), r es ults i n a n o v er all p ositi v e i m p a ct o n a p ati e nt’s w or k, p h ysi c al a n d m e nt al f u n cti o ni n g, d ail y a cti viti es, or e nj o y m e nt of lif e. I n a d diti o n, w e ar e n ot a w ar e of a n y st u di es d e m o nstr ati n g t h at t h e l e v el of p ai n r e d u cti o n e x p eri e n c e d b y p ati e nts o n K a di a n t h er a p y c orr es p o n ds wit h a p ositi v e i m p a ct o n t h e o ut c o m es cl ai m e d. 6 0 7. Mis r e p r es e nt ati o n # 7: Alt e r n ati v e F o r ms of P ai n R eli ef P os e G r e at e r Ris ks t h a n O pi oi ds 1 4 2. I n t h eir m ar k eti n g, t h e M a n uf a ct ur er D ef e n d a nts c o nsist e ntl y o mitt e d k n o w n ris ks of c hr o ni c o pi oi d t h er a p y a n d e m p h asi z e d or e x a g g er at e d ris ks of c o m p eti n g pr o d u cts s o t h at pr es cri b ers a n d p ati e nts w o ul d f a v or o pi oi ds o v er ot h er t h er a pi es s u c h as a c et a mi n o p h e n or n o nst er oi d al a nti- i nfl a m m at or y dr u gs ( “N S AI Ds ”). 1 4 3. In a d diti o n t o f aili n g t o dis cl os e i n pr o m oti o n al m at eri als t h e ris ks of a d di cti o n, o v er d os e, a n d d e at h, t h e M a n uf a ct ur er D ef e n d a nts r o uti n el y i g n or e d t h e ris ks of h y p er al g esi a, a W ar ni n g L ett er fr o m T h o m as W. A br a ms, Dir., Di v. of Dr u g M ar k eti n g, A d v ertisi n g, a n d C o m m’ n, D e p’t of H e alt h & H u m a n S er vs., t o Bri a n A. M ar kis o n, C h air m a n, Pr esi d e nt, a n d C hi ef E x e c. Offi c er, Ki n g P h ar m a c e uti c als, I n c. ( M ar. 2 4, 2 0 0 8), a v ail a bl e at htt p:// w a y b a c k. ar c hi v e it. or g/ 7 9 9 3/ 2 0 1 7 0 1 1 2 0 6 4 0 2 5/ htt p:// w w w.f d a. g o v/ d o w nl o a ds/ Dr u gs/ G ui d a n c e C o m pli a n c e R e g ul at or yI nf or m ati o n/ E n f or c e m e nt A cti viti es b y F D A/ W ar ni n g L ett ers a n d N oti c e of Vi ol ati o n L ett erst o P h ar m a c e uti c al C o m p a ni es/ u c m 0 5 4 1 3 4. p d f. 60 W ar ni n g L ett er fr o m T h o m as W. A br a ms, Dir., Di v. of Dr u g M ar k eti n g, A d v ertisi n g, a n d C o m m’ n, D e p’t of H e alt h & H u m a n S er vs., t o D o u g B o ot h e, C hi ef E x e c. Offi c er, A ct a vis U. S. ( F e b. 1 8 2 0 1 0), a v ail a bl e at htt p:// w a y b a c k. ar c hi v e it. or g/ 7 9 9 3/ 2 0 1 7 0 1 1 2 0 6 3 0 2 7/ htt p:// w w w.f d a. g o v/Dr u gs/ G ui d a n c e C o m pli a n c e R e g ul at or yI nf or m ati o n/ E nf or c e m e nt A cti viti es b y F D A/ W ar ni n g L ett ers a n d N oti c e of Vi ol ati o n L ett erst o P h ar m a c e uti c al C o m p a ni es/ u c m 2 5 9 2 4 0 ht m. 59 41 48 of 258 INDEX NO. 400016/2018 FILED: SUFFOLK COUNTY CLERK 04/11/2019 11:19 AM NYSCEF DOC. NO. 19 RECEIVED NYSCEF: 04/11/2019 V ersi o n D at e d A pr. 1 0, 2 0 1 9 wit h C ert ai n R e d a cti o ns R e m o v e d P er P arti es' A gr e e m e nt “ k n o w n s eri o us ris k ass o ci at e d wit h c hr o ni c o pi oi d a n al g esi c t h er a p y i n w hi c h t h e p ati e nt b e c o m es m or e s e nsiti v e t o c ert ai n p ai nf ul sti m uli o v er ti m e; ” 61 h or m o n al d ysf u n cti o n; 6 2 d e cli n e i n i m m u n e f u n cti o n; m e nt al cl o u di n g, c o nf usi o n, a n d di z zi n ess; i n cr e as e d f alls a n d fr a ct ur es i n t h e el d erl y; 6 3 n e o n at al a bsti n e n c e s y n dr o m e ; a n d b e n z o di a z e pi n es, p ot e nti all y f at al i nt er a cti o ns w hi c h ar e us e d t o tr e at a n xi et y a n d wit h al c o h ol m a y b e c o -pr es cri b e d or wit h wit h o pi oi ds, p arti c ul arl y t o v et er a ns s uff eri n g fr o m p ai n. 6 4 1 4 4. As a r es ult of t h e M a n uf a ct ur er D ef e n d a nts’ d e c e pti v e pr o m oti o n of o pi oi ds o v er s af er a n d m or e eff e cti v e dr u gs, o pi oi d pr es cri pti o ns i n cr e as e d e v e n as t h e p er c e nt a g e of p ati e nts visiti n g a d o ct or f or p ai n r e m ai n e d c o nst a nt. A st u d y of 7. 8 milli o n d o ct or visits b et w e e n 2 0 0 0 a n d 2 0 1 0 f o u n d t h at o pi oi d pr es cri pti o ns i n cr e as e d fr o m 1 1. 3 % t o 1 9. 6 % of visits, as N S AI D a n d a c et a mi n o p h e n pr es cri pti o ns f ell fr o m 3 8 % t o 2 9 %, dri v e n pri m aril y b y t h e d e cli n e i n N S AI D pr es cri bi n g. 6 5 1 4 5. A 2 0 1 8 st u d y d esi g n e d t o m a k e h e a d -t o-h e a d c o m p aris o ns b et w e e n o pi oi ds a n d ot h er ki n ds of p ai n m e di c ati o ns s h o w e d t h at “[t] h er e w as n o si g nifi c a nt diff er e n c e i n p ai n -r el at e d f u n cti o n b et w e e n t h e 2 gr o u ps ”— t h os e w h os e p ai n w as tr e at e d wit h o pi oi ds a n d t h os e w h os e p ai n w as tr e at e d wit h n o n -o pi o i ds, i n cl u di n g a c et a mi n o p h e n a n d N S AI Ds li k e i b u pr of e n. T h e st u d y L ett er fr o m J a n et W o o d c o c k, M. D., Dir., Ctr. F or Dr u g E v al. & R es., t o A n dr e w K ol o d n y, M. D., Pr es. P h ysi ci a ns f or R es p o nsi bl e O pi oi d Pr es cri bi n g, R e D o c k et N o. F D A -2 0 1 2 - P-0 8 1 8 ( S e pt. 1 0, 2 0 1 3). 62 H arr y W. D a ni ell, H y p o g o n a dis m i n M e n C o ns u mi n g S ust ai n e d -A cti o n Or al O pi oi ds , 3 J. P ai n 3 7 7-8 4 ( 2 0 0 1). 63 S e e B er n h ar d M. K us c h el et al., T h e Ris k of F all I nj u r y i n R el ati o n t o C o m m o nl y Pr es cri b e d M e di c ati o ns A m o n g Ol d er P e o pl e – a S w e dis h C as e -C o ntr ol St u d y , 2 5 E ur. J. P u b. H. 5 2 7 (J ul y 2 0 1 4). 64 K ar e n H. S e al et al., Ass o ci ati o n of M e nt al H e alt h Dis or d ers Wit h Pr es cri pti o n O pi oi ds a n d Hi g h - Ris k O pi oi ds i n U S V et er a ns of Ir a q a n d Af g h a nist a n , 3 0 7 J. A m. M e d. Ass’ n 9 4 0-4 7 ( 2 0 1 2). 65 M. D a u br ess e et al., A m b ul at or y Di a g n osis a n d Tr e at m e nt of N o n m ali g n a nt P ai n i n t h e U nit e d St at es, 2 0 0 0 -2 0 1 0, 5 1 M e d. C ar e 8 7 0 -8 7 8 ( 2 0 1 3). F or b a c k p ai n al o n e, t h e p er c e nt a g e of p ati e nts pr es cri b e d o pi oi ds i n cr e as e d fr o m 1 9 % t o 2 9 % b et w e e n 1 9 9 9 a n d 2 0 1 0, e v e n as t h e us e of N S AI Ds or a c et a mi n o p h e n d e cli n e d fr o m 3 9. 9 % t o 2 4. 5 % of t h es e visits; a n d r ef err als t o p h ysi c al t h er a p y r e m ai n e d st e a d y. S e e als o J o h n M afi et al., W ors e ni n g Tr e n ds i n t h e M a n a g e m e nt a n d Tr e at m e nt of B a c k P ai n , 1 7 3 J. A m. M e d. Ass’ n I nt er n al M e d. 1 5 7 3, 1 5 7 3 ( 2 0 1 3). 61 42 49 of 258 INDEX NO. 400016/2018 FILED: SUFFOLK COUNTY CLERK 04/11/2019 11:19 AM NYSCEF DOC. NO. 19 RECEIVED NYSCEF: 04/11/2019 V ersi o n D at e d A pr. 1 0, 2 0 1 9 wit h C ert ai n R e d a cti o ns R e m o v e d P er P arti es' A gr e e m e nt c o n cl u d e d t h at “[t]r e at m e nt wit h o pi oi ds w as n ot s u p eri or t o tr e at m e nt wit h n o n o pi oi d m e di c ati o ns f or i m pr o vi n g p ai n-r el at e d f u n cti o n o v er 1 2 m o nt hs. ” 6 6 8. Mis r e p r es e nt ati o n # 8: E xt e n d e d - Rel e as e D r u gs P r o vi d e T w el v e o r M o r e H o u rs o f P ai n R eli ef 1 4 6. T h e M a n uf a ct ur er D ef e n d a nts misl e d d o ct ors a n d p ati e nts a b o ut t h e ori gi n al s elli n g p oi nt of t h eir “r e v ol uti o n ar y ” e xt e n d e d -r el e as e ( “ E R ”) o pi oi ds, m a ki n g t h e k n o wi n gl y f als e cl ai m t h at s u c h dr u gs w o ul d pr o vi d e 1 2 or m or e h o urs of p ai n r eli ef f or m ost p ati e nts. T his cl ai m pr o vi d e d t h e b asis f or t h e M a n uf a ct ur er D ef e n d a nts’ p at e nts a n d t h eir eff orts t o diff er e nti at e t h e ms el v es fr o m c o m p etit ors , a n d f a cilit at e d t h eir f als e cl ai ms t h at E R dr u gs h a v e a m o r e e v e n, st a bl e r el e as e m e c h a nis m t h at a v oi ds p e a ks a n d v all e ys, a n d t h er ef or e t h e r us h t h at f ost ers mis us e a n d a d di cti o n. 1 4 7. T h e a cti v e i n gr e di e nt i n t h e M a n uf a ct ur er D ef e n d a nts ’ E R o pi oi ds d o es n ot e nt er t h e b o d y at a li n e ar r at e. O x y C o nti n, f or e x a m pl e, w or ks b y r el e asi n g a gr e at er pr o p orti o n of o x y c o d o n e i nt o t h e b o d y u p o n a d mi nistr ati o n, a n d t h e r el e as e gr a d u all y t a p ers. T h e r e d u c e d r el e as e of t h e dr u g o v er ti m e m e a ns t h at t h e o x y c o d o n e n o l o n g er pr o vi d es t h e s a m e l e v el of p ai n r eli ef . As a r es ult, i n m a n y p ati e nts, O x y C o nti n d o es n ot l ast f or t h e t w el v e h o urs pr o mis e d. 1 4 8. A n E R pill r el e as es a n i niti al r us h of n e arl y h alf of t h e o pi oi d d os a g e, w hi c h tri g g ers a p o w erf ul ps y c h ol o gi c al r es p o ns e — li k e a n i m m e di at e r el e as e o pi oi d. C o ns e q u e ntl y, t h er e is l ess of t h e dr u g at t h e e n d of t h e 1 2 h o urs, w hi c h pr e ci pit at es wit h dr a w al s y m pt o ms, a p h e n o m e n o n k n o w n as “ e n d of d os e ” f ail ur e. Eri n E. Kr e bs et al., Eff e ct of O pi oi d vs N o n o pi oi d M e di c ati o ns o n P ai n -R el at e d F u n cti o n i n P ati e nts Wit h C hr o ni c B a c k P ai n or Hi p or K n e e Ost e o art hritis P ai n: T h e S P A C E R a n d o miz e d Cli ni c al Tri al , 3 1 9 J. A m. M e d. Ass’ n . 8 7 2 8 2 ( 2 0 1 8), a v ail a bl e at htt ps://j a m a n et w or k. c o m/j o ur n als/j a m a/f ull arti cl e/ 2 6 7 3 9 7 1 . 66 43 50 of 258 INDEX NO. 400016/2018 FILED: SUFFOLK COUNTY CLERK 04/11/2019 11:19 AM NYSCEF DOC. NO. 19 1 4 9. RECEIVED NYSCEF: 04/11/2019 V ersi o n D at e d A pr. 1 0, 2 0 1 9 wit h C ert ai n R e d a cti o ns R e m o v e d P er P arti es' A gr e e m e nt E n d - of-d os e f ail ur e c a n r e n der E R o pi oi ds e v e n m or e d a n g er o us t h a n I R o pi oi ds b e c a us e p ati e nts b e gi n t o e x p eri e n c e wit h dr a w al s y m pt o ms, f oll o w e d b y a e u p h ori c r us h wit h t h eir n e xt d os e — a c y cl e t h at f u els a cr a vi n g f or m or e E R o pi oi ds. F or t his r e as o n, Dr. T h e o d or e Ci c er o, a n e ur o p h ar m a c ol o gist at t h e W as hi n gt o n U ni v ersit y S c h o ol of M e di ci n e i n St. L o uis, h as c all e d O x y C o nti n ’s 1 2-h o ur d osi n g “t h e p erf e ct r e ci p e f or a d di cti o n. ” 6 7 M a n y p ati e nts will e x a c er b at e t his c y cl e b y t a ki n g t h eir n e xt d os e a h e a d of s c h e d ul e or r es orti n g t o a r es c u e d os e of a n ot h er o pi oi d, i n cr e asi n g t h e o v er all a m o u nt of o pi oi ds t h e y ar e t a ki n g. 1 5 0. T h e M a n uf a ct ur er D ef e n d a nts’ r ef us al t o dis cl os e t h e pr e v al e n c e of e n d- of- d os e f ail ur e m e a nt t h at pr es cri b ers w er e misi nf or m e d a b o ut t h e a d v a nt a g es of t h eir E R dr u gs i n a m a n n er t h at pr es er v e d t h eir c o m p etiti v e a d v a nt a g e a n d pr ofits, at t h e e x p e ns e of p ati e nts, w h o w er e pl a c e d at gr e at er ris k of o v er d os e, a d di cti o n, a n d ot h er a d v ers e eff e cts. 9. Mis r e p r es e nt ati o n # 9: N e w l y-D e v el o p e d b ut M o r e E x p e nsi v e F o r m ul ati o ns o f O pi oi ds S u c c essf ull y D et e r A b us e 1 5 1. I n 2 0 1 0, t h e F D A a p pr o v e d a r ef or m ul at e d v ersi o n of O x y C o nti n, whi c h w as t h e first o pi oi d t h at w as all o w e d t o m a k e cl ai ms t h at it w as d esi g n e d t o h el p dis c o ur a g e mis us e. 6 8 T h e F D A n ot e d t h at t h e n e w v ersi o n w as “i nt e n d e d t o pr e v e nt t h e o pi oi d m e di c ati o n fr o m b ei n g c ut, br o k e n, c h e w e d, cr us h e d or diss ol v e d t o r el e as e m or e m e di c ati o n, ” b ut t h at “it still c a n b e a b us e d or mis us e d b y si m pl y i n g esti n g l ar g er d os es t h a n ar e r e c o m m e n d e d. ” 6 9 H arri et R y a n, s u pr a n ot e 2 1. Pr ess R el e as e, U. S. F o o d & Dr u g A d mi nistr ati o n, F D A A p pr o v es N e w F or m ul ati o n f or O x y C o nti n ( A pr. 5, 2 0 1 0), a v ail a bl e at htt ps:// w a y b a c k. ar c hi v e it. or g/ 7 9 9 3/ 2 0 1 7 0 1 1 2 1 3 0 2 5 8/ htt p:/ w w w f d a. g o v/ N e ws E v e nts/ N e wsr o o m/ Pr ess A n n o u n c e m e nts/ u c m 2 0 7 4 8 0 ht m. 69 I d. 67 68 44 51 of 258 INDEX NO. 400016/2018 FILED: SUFFOLK COUNTY CLERK 04/11/2019 11:19 AM NYSCEF DOC. NO. 19 RECEIVED NYSCEF: 04/11/2019 V ersi o n D at e d A pr. 1 0, 2 0 1 9 wit h C ert ai n R e d a cti o ns R e m o v e d P er P arti es' A gr e e m e nt 52 of 258 INDEX NO. 400016/2018 FILED: SUFFOLK COUNTY CLERK 04/11/2019 11:19 AM NYSCEF DOC. NO. 19 RECEIVED NYSCEF: 04/11/2019 V ersi o n D at e d A pr. 1 0, 2 0 1 9 wit h C ert ai n R e d a cti o ns R e m o v e d P er P arti es' A gr e e m e nt t o H C Ps b y e a c h m a n uf a ct ur er’s s al es r e pr es e nt ati v es; ( b) a d v ertis e m e nts pl a c e d i n m e di c al j o ur n als ai m e d at pr es cri b ers; a n d ( c) dis c o u nt c ar ds ai m e d at c o ns u m ers. A n d w hil e t h es e eff orts w er e e x pli citl y i n s u p p ort of t h e M a n uf a ct ur er D ef e n d a nts’ br a n d e d dr u gs, t h e y i n e vit a bl y i m p a ct e d p er c e pti o ns of t h e g e n eri c v ersi o ns of t h os e dr u gs t h e y k n e w H C Ps w o ul d fr e q u e ntl y pr es cri b e i n t h eir pl a c e. 1. D e t aili n g 1 5 6. E a c h M a n uf a ct ur er D ef e n d a nt a g gr essi v el y d et ail e d N e w Y or k H C Ps , t y pi c all y pr o m oti n g t h eir br a n d e d o pi oi ds b ut oft e n t o uti n g t h e b e n efits of o pi oi ds g e n er all y . B et w e e n 2 0 0 0 a n d 2 0 1 4, t h eir c o m bi n e d d et aili n g e x p e n dit ur es m or e t h a n d o u bl e d t o $ 1 6 8 milli o n. 1 5 7. T h e M a n uf a ct ur er D ef e n d a nts tr ai n e d t h eir s al es r e pr es e nt ati v es t o diss e mi n at e t o H C Ps t h e f als e a n d misl e a di n g cl ai ms d es cri b e d a b o v e . E a c h m a n uf a ct ur er a n al y z e d pr es cri pti o n dr u g s al es d at a ( e. g., fr o m I M S H e alt h H ol di n gs, I n c., t o d a y k n o w n as I Q VI A), w hi c h c o nt ai ne d d et ails r e g ar di n g t h e dr u gs pr es cri b e d b y H C Ps a n d t h e p h ar m a ci es t h at dis p e ns e d t h os e dr u gs,7 2 t o tr a c k t h e pr es cri bi n g pr a cti c es of i n di vi d u al H C Ps i n or d er t o s el e ct t h e m f or det aili n g . M a n uf a ct ur ers c o ul d h a v e — b ut d i d n ot —us e t his d at a t o i d e ntif y i n a p pr o pri at e pr es cri bi n g a n d p ot e nti al di v ersi o n. 1 5 8. Fr o m 2 0 0 8 t hr o u g h pr es e nt, t h e M a n uf a ct ur er D ef e n d a nts’ s al es r e pr es e nt ati v es h a v e visit e d N e w Y or k H C Ps m or e t h a n o n e milli o n ti m es . W hil e P ur d u e i m pl e m e nt e d t h e m ost p er v asi v e o pi oi ds d et aili n g pr o gr a m, t h e ot h er M a n uf a ct ur er D ef e n d a nts w er e n ot f ar b e hi n d, c oll e cti v el y m a ki n g n e arl y 6 0 0, 0 0 0 o pi oi d-r el at e d s al es visits t o N e w Y or k H C Ps fr o m 2 0 0 8 J er e m y A. Gr e e n e, P h ar m a c e uti c al M ar k eti n g R es e ar c h a n d t h e Pr es cri bi n g P h ysi ci a n , 1 4 6 A n n als of I nt er n al M e d. 7 4 2 ( 2 0 0 7), a v ail a bl e at htt ps:// a n n als. or g/ ai m/f ull arti cl e/ 7 3 4 7 2 3/ p h ar m a c e uti c al -m ar k eti n g -r es e ar c hpr es cri bi n g -p h ysi ci a n. 72 46 53 of 258 INDEX NO. 400016/2018 FILED: SUFFOLK COUNTY CLERK 04/11/2019 11:19 AM NYSCEF DOC. NO. 19 RECEIVED NYSCEF: 04/11/2019 V ersi o n D at e d A pr. 1 0, 2 0 1 9 wit h C ert ai n R e d a cti o ns R e m o v e d P er P arti es' A gr e e m e nt t hr o u g h t h e pr es e nt. J a nss e n l e d t h e p a c k wit h 3 5 0, 0 0 0 visits pr o m oti n g N u c y nt a, f oll o w e d b y E n d o wit h n e arl y 1 6 5, 0 0 0 visits pr o m oti n g O p a n a, M alli n c kr o dt wit h m or e t h a n 7 0, 0 0 0 visits pr o m oti n g E x al g o a n d X art e mis, T e v a wit h 3 5, 0 0 0 visits pr o m oti n g F e nt or a, a n d All er g a n wit h n e arl y 3, 0 0 0 visits pr o m oti n g K a di a n. E a c h M a n uf a ct ur er D ef e n d a nt h as p ai d b o n us es t o its s al es r e pr es e nt ati v es b as e d o n pr es cri pti o ns writt e n b y t h os e H C Ps, a n d h as m a d e e xt e nsi v e p a y m e nts t o t h os e H C Ps i n t h e f or m of s p e a k ers’ f e es, l u n c h es, a n d di n n ers. 1 5 9. A st u d y p u blis h e d i n t h e J o ur n al of t h e A m eri c a n M e di c al Ass o ci ati o n i n 2 0 1 8 c o n cl u d e d t h at e v e n s m all p a y m e nts of $ 1 0 fr o m o pi oi d m a n uf a ct ur ers c a n i nfl u e n c e H C Ps t o pr es cri b e o pi oi ds, a n d t h at “r e c ei pt of a n y o pi oi d -r el at e d p a y m e nts fr o m i n d ustr y i n 2 0 1 4 w as ass o ci at e d wit h 9. 3 % … m or e o pi oi d cl ai ms i n 2 0 1 5 c o m p ar e d wit h p h ysi ci a ns w h o r e c ei v e d n o s u c h p a y m e nts []. ” 7 3 A n ot h er 2 0 1 8 st u d y t h at f o c us e d o n N e w Y or k H C Ps c o n cl u d e d t h at “[ o] pi oi d- r el at e d p a y m e nts m a y l e a d t o a n i n cr e as e i n o pi oi d pr es cri bi n g, b as e d o n c o m p aris o ns wit h a m at c h e d gr o u p of si mil ar p h ysi ci a ns w h o di d n ot r e c ei v e a n y o pi oi d- r el at e d p a y m e nts. ” 7 4 1 6 0. D et aili n g c a n h a v e d e a dl y r es ults. A st u d y p u blis h e d i n J a n u ar y 2 0 1 9 i n J A M A N et w or k O p e n c o n cl u d e d t h at “ a cr oss U S c o u nti es, m ar k eti n g of o pi oi d pr o d u cts t o p h ysi ci a ns w as ass o ci at e d wit h i n cr e as e d o pi oi d pr es cri bi n g a n d, s u bs e q u e ntl y, wit h el e v at e d m ort alit y fr o m o v er d os es. ” 7 5 2. A d v e rtis e m e nts 1 6 1. T o pr o m ot e t h e p ur p ort e d b e n efits of its br a n d e d o pi oi ds, e a c h M a n uf a ct ur er D ef e n d a nt pl a c e d a d v ertis e m e nts i n m e di c al j o ur n als a n d p o p ul ar m a g a zi n es pr o m oti n g t h e us e of 73 S c ott E. H a dl a n d et al., Ass o ci ati o n of P h ar m a c e uti c al I n d ustr y M ar k eti n g of O pi oi d Pr o d u cts t o P h ysi ci a ns Wit h S u bs e q u e nt O pi oi d Pr es cri bi n g , 1 7 8 J. A m. M e d. Ass’ n I nt er n al M e d. 8 6 1, 8 6 2 (J u n e 2 0 1 8), a v ail a bl e at htt ps://j a m a n et w or k. c o m/j o ur n als/j a m ai nt er n al m e di ci n e/ arti cl e -a bstr a ct/ 2 6 8 1 0 5 9. 74 N Y S H e alt h F o u n d ati o n, s u pr a n ot e 2 6, at 2. 75 S c ott E. H a dl a n d, s u pr a n ot e 7 3, at 8 6 1. 47 54 of 258 INDEX NO. 400016/2018 FILED: SUFFOLK COUNTY CLERK 04/11/2019 11:19 AM NYSCEF DOC. NO. 19 o pi oi ds. RECEIVED NYSCEF: 04/11/2019 V ersi o n D at e d A pr. 1 0, 2 0 1 9 wit h C ert ai n R e d a cti o ns R e m o v e d P er P arti es' A gr e e m e nt S u c h a d v ertis e m e nts, a m o n g ot h er t hi n gs, d e c e pti v el y o mitt e d or d o w n pl a y e d t h e ris k of a d di cti o n a n d o v erst at e d t h e b e n efits of o pi oi ds f or c hr o ni c p ai n. 1 6 2. T h e m a n uf a ct ur ers a g gr essi v el y pr o m ot e d t h eir o pi oi ds t hr o u g h s u c h br a n d e d a d v ertisi n g, s u c h t h at b y 2 0 1 1, t h e m a n uf a ct ur ers’ c oll e cti v e s p e n d o n s u c h a d v ertisi n g r e a c h e d $ 1 4 milli o n — a n a m o u nt tri pl e t h e si z e of t h eir c oll e cti v e a d v ertisi n g t e n y e ars e arli er i n 2 0 0 1. 3. Dis c o u nt C a r ds 1 6 3. T he M a n uf a ct ur er D ef e n d a nts r e c o g ni z e d t h at o n e of t h e l ar g est o bst a cl es t o c o ns u m ers st arti n g a n d r e m ai ni n g o n t h eir br a n d e d o pi oi ds, i n cl u di n g b y s wit c hi n g fr o m a c o m p etit or’s dr u g, w as o ut - of- p o c k et c ost. T o o v er c o m e t his b arri er , t h e y e a c h a d v ertis e d t o c o ns u m ers a n d distri b ut e d wi d el y — i n cl u di n g o n t h eir p u bli c w e bsit es— c o -p a y dis c o u nt c ar ds, w hi c h oft e n e n a bl e d c o ns u m ers t o r e c ei v e a “st art er ” d os e of a d di cti v e n ar c oti cs at l o w c ost or f or fr e e. F or e x a m pl e, i n 2 0 1 2, J a nss e n pl a n n e d t o distri b ut e 1. 5 milli o n i n s a vi n gs c ar ds w ort h $ 2 5 e a c h. Disr e g ar di n g t h e c o ns e q u e n c es of t h e o pi oi ds e pi d e mi c t h e y cr e at e d, t h e M a n uf a ct ur er D ef e n d a nts c o nti n u e t o a d v ertis e o pi oi ds dis c o u nt c ar ds dir e ctl y t o c o ns u m ers , s o m eti m es w or ki n g wit h dist ri b ut ors. F or e x a m pl e, P ur d u e’s s a vi n gs pr o gr a m f or O x y C o nti n is c urr e ntl y a d mi nist er e d b y M c K ess o n: 48 55 of 258 INDEX NO. 400016/2018 FILED: SUFFOLK COUNTY CLERK 04/11/2019 11:19 AM NYSCEF DOC. NO. 19 RECEIVED NYSCEF: 04/11/2019 V ersi o n D at e d A pr. 1 0, 2 0 1 9 wit h C ert ai n R e d a cti o ns R e m o v e d P er P arti es' A gr e e m e nt 56 of 258 INDEX NO. 400016/2018 FILED: SUFFOLK COUNTY CLERK 04/11/2019 11:19 AM NYSCEF DOC. NO. 19 RECEIVED NYSCEF: 04/11/2019 V ersi o n D at e d A pr. 1 0, 2 0 1 9 wit h C ert ai n R e d a cti o ns R e m o v e d P er P arti es' A gr e e m e nt 57 of 258 INDEX NO. 400016/2018 FILED: SUFFOLK COUNTY CLERK 04/11/2019 11:19 AM NYSCEF DOC. NO. 19 RECEIVED NYSCEF: 04/11/2019 V ersi o n D at e d A pr. 1 0, 2 0 1 9 wit h C ert ai n R e d a cti o ns R e m o v e d P er P arti es' A gr e e m e nt w as als o a c h air m a n of t h e D e p art m e nt of P ai n M e di ci n e a n d P alli ati v e C ar e at B et h Isr a el M e di c al C e nt er i n N e w Y or k, a n d c o- a ut h or e d r o u g hl y 1 0 0 arti cl es o n p ai n a n d r el at e d iss u es. 1 7 3. Dr. P ort e n o y w a s a k e y fi g ur e i n d esti g m ati zi n g o pi oi d us e, t o uti n g t h eir p ur p ort e d b e n efits a n d m i ni mi zi n g t h eir ris ks i n all m ar k eti n g c h a n n els, fr o m m e di c al lit er at ur e t o a n a p p e ar a n c e o n G o o d M or ni n g A m eri c a , f als el y cl ai mi n g t h at l ess t h a n 1 % of p ati e nts w o ul d b e c o m e a d di ct e d t o o pi oi ds. 1 7 4. St arti n g i n 1 9 9 7, Dr. P ort e n o y r e c ei v e d r es e ar c h s u p p ort, c o ns ulti n g f e es, a n d h o n or ari a fr o m s e v er al m a n uf a ct ur ers. I n 2 0 0 9, f or e x a m pl e, P ur d u e c o ntri b ut e d $ 5, 0 0 0 t o B et h Isr a el M e di c al C e nt er i n N e w Y or k f or t h e “ W o n d erf ul W orl d G al a h o n ori n g R uss ell P ort e n o y M D. ” I n t ur n, Dr. P ort e n o y pl a y e d a criti c al r ol e i n a m plif yi n g P ur d u e’s fr a u d ul e nt cl ai ms a b o ut t h e ris ks a n d b e n efits of l o n g-t er m o pi oi d us e f or m a n a gi n g c hr o ni c p ai n. 1 7 5. Dr. P ort e n o y als o fr e q u e ntl y a p p e ar e d i n t h e m e di a t o pr o m ot e o pi oi ds b y dr a m ati c all y u n d erst ati n g t h e ris k of a d di cti o n. I n 2 0 1 0, f or e x a m pl e, h e a p p e ar e d o n t h e n ati o n all y t el e vis e d G o o d M or ni n g A m eri c a s h o w, t o dis c uss t h e l o n g-t er m us e of o pi oi ds t o tr e at c hr o ni c p ai n a n d t o f als el y cl ai m t h e f oll o wi n g: 7 7 A d di cti o n, w h e n tr e ati n g p ai n, is disti n ctl y u n c o m m o n. If a p ers o n d o es n ot h a v e a hist or y, a p ers o n al hist or y, of s u bst a n c e mis us e, a n d d o es n ot h a v e a hist or y i n t h e f a mil y of s u bst a n c e mis us e, a n d d o es n ot h a v e a v er y m aj or ps y c hi atri c dis or d er , m ost d o ct ors c a n f e el v er y ass ur e d t h at t h at p ers o n is n ot g oi n g t o b e c o m e a d di ct e d. 1 7 6. Dr. P ort e n o y als o r e p e at e dl y e m p h asi z e d t o p h ysi ci a ns a n d t h e p u bli c t h at o pi oi ds p os e d a l o w ris k of a d di cti o n, r el yi n g e x cl usi v el y o n t h e 1 9 8 0 P ort er/Ji c k l ett er dis c uss e d a b o v e . I n his o w n w or ds: 77 G o o d M or ni n g A m eri c a ( A B C N e ws t el e visi o n br o a d c ast A u g. 3 0, 2 0 1 0). 51 58 of 258 INDEX NO. 400016/2018 FILED: SUFFOLK COUNTY CLERK 04/11/2019 11:19 AM NYSCEF DOC. NO. 19 RECEIVED NYSCEF: 04/11/2019 V ersi o n D at e d A pr. 1 0, 2 0 1 9 wit h C ert ai n R e d a cti o ns R e m o v e d P er P arti es' A gr e e m e nt 59 of 258 INDEX NO. 400016/2018 FILED: SUFFOLK COUNTY CLERK 04/11/2019 11:19 AM NYSCEF DOC. NO. 19 RECEIVED NYSCEF: 04/11/2019 V ersi o n D at e d A pr. 1 0, 2 0 1 9 wit h C ert ai n R e d a cti o ns R e m o v e d P er P arti es' A gr e e m e nt 60 of 258 INDEX NO. 400016/2018 FILED: SUFFOLK COUNTY CLERK 04/11/2019 11:19 AM NYSCEF DOC. NO. 19 1 8 4. RECEIVED NYSCEF: 04/11/2019 V ersi o n D at e d A pr. 1 0, 2 0 1 9 wit h C ert ai n R e d a cti o ns R e m o v e d P er P arti es' A gr e e m e nt Pr o -o pi oi d K O Ls oft e n f ail e d t o dis cl os e t h eir fi n a n ci al ti es t o t h e M a n uf a ct ur er D ef e n d a nts. F or e x a m pl e, i n 2 0 1 1, aft er Dr. Fi n e a n d f ell o w K O L Dr. S c ott Fis h m a n p u blis h e d a l ett er i n t h e J o ur n al of t h e A m eri c a n M e di c al Ass o ci ati o n ( “J A M A ”) c all e d “ R e d u ci n g O pi oi d A b us e a n d Di v ersi o n, ” w hi c h e m p h asi z e d t h e i m p ort a n c e of m ai nt ai ni n g p ati e nt a c c ess t o o pi oi ds ,8 2 t h e e dit ors of J A M A f o u n d t h at b ot h h a d pr o vi d e d i n c o m pl et e fi n a n ci al dis cl os ur es a n d r e q uir e d t h e m t o s u b mit c orr e cti o ns listi n g all of t h eir ti es t o t h e o pi oi ds i n d ustr y. 8 3 3. F r o nt G r o u ps 1 8 5. I n a d diti o n t o r el yi n g o n C M Es a n d K O Ls, t h e M a n uf a ct ur er D ef e n d a nts us e d, f u n d e d, a n d dir e ct e d n u m er o us Fr o nt Gr o u ps, w hi c h oft e n h a d dir e ct ors w h o w er e u n dis cl os e d K O Ls, t o pr o m ot e t h eir f als e a n d misl e a di n g cl ai ms. 8 4 U n d er t h e g uis e of n e utr alit y, t h e Fr o nt Gr o u ps d e e p e n e d t h e M a n uf a ct ur er D ef e n d a nts’ a bilit y t o c o n v e y t o H C Ps , p ati ents, a n d p oli c y m a k ers t h at pr o-o pi oi d m ess a gi n g w as i n d e p e n d e nt a n d p ati e nt-c e nt er e d r at h er t h a n dri v e n b y pr ofits , as w as t h e c as e.8 5 P err y G. Fi n e & S c ott M. Fis h m a n, R e d u ci n g O pi oi d A b us e a n d Di v ersi o n , 3 0 6 J. A m. M e d. Ass’ n 3 8 1 (J ul y 2 0 1 1), a v ail a bl e at : htt ps://j a m a n et w or k. c o m/j o ur n als/j a m a/ arti cl e a bstr a ct/ 1 1 0 4 1 4 4 ?r e dir e ct =tr u e . 83 P err y G. Fi n e, I n c o m pl et e Fi n a n ci al Dis cl os ur es i n a L ett er o n R e d u ci n g O pi oi d A b us e a n d Di v ersi o n , 3 0 6 J. A m. M e d. Ass’ n 1445 ( S e pt. 2 0 1 1), a v ail a bl e at htt ps://j a m a n et w or k. c o m/j o ur n als/j a m a/ arti cl e a bstr a ct/ 1 1 0 4 4 6 4 ?r e dir e ct =tr u e ; S c ott M. Fis h m a n, I n c o m pl et e Fi n a n ci al Dis cl os ur es i n: R e d u ci n g O pi oi d A b us e a n d Di v ersi o n , 306 J. A m. M e d. Ass’ n 1446 ( O ct. 2 0 1 1), a v ail a bl e at : htt ps://j a m a n et w or k. c o m/j o ur n als/j a m a/f ull arti cl e/ 1 1 0 4 4 5 3 . 84 U. S. S e n at e H o m el a n d S e c urit y & G o v er n m e nt al Aff airs C o m mitt e e, F u eli n g a n E pi d e mi c: E x p osi n g t h e Fi n a n ci al Ti es B et w e e n O pi oi d M a n uf a ct ur ers a n d T hir d P art y A d v o c a c y Gr o u ps 3 ( F e br u ar y 1 2, 2 0 1 8), htt ps:// w w w hs dl. or g/ ? a bstr a ct & di d = 8 0 8 1 7 1 ( “F u eli n g a n E pi d e mi c ”). 85 T h e e xt e nsi v e b o n d b et w e e n o pi oi d m a n uf a ct ur ers a n d Fr o nt Gr o u ps w as r e v e al e d i n t h e U. S. S e n at e 2 0 1 7 r e p ort F u eli n g a n E pi d e mi c: E x p osi n g t h e Fi n a n ci al Ti es B et w e e n O pi oi d M a n uf a ct ur ers a n d T hir d P art y A d v o c a c y Gr o u ps , w hi c h w as “t h e first c o m pr e h e nsi v e s n a ps h ot of t h e fi n a n ci al c o n n e cti o ns b et w e e n o pi oi d m a n uf a ct ur ers a n d a d v o c a c y gr o u ps a n d pr of essi o n al s o ci eti es o p er ati n g i n t h e ar e a of o pi oi ds p oli c y. ” T h e r e p ort f o u n d t h at t h e o pi oi d m a n uf a ct ur ers, i n cl u di n g M a n uf a ct ur er D ef e n d a nts P ur d u e a n d J a nss e n, c o ntri b ut e d milli o ns of d oll ars t o v ari o us Fr o nt Gr o u ps a n d i n di vi d u als ass o ci at e d t h er e wit h; t h es e gr o u ps “‘ pl a y a si g nifi c a nt r ol e i n s h a pi n g h e alt h p oli c y d e b at es, s etti n g n ati o n al g ui d eli n es f or p ati e nt tr e at m e nt, r aisi n g dis e as e a w ar e n ess, a n d e d u c ati n g t h e p u bli c.’ ” As t h e S e n at e r e p ort f o u n d, t h e Fr o nt Gr o u ps “ a m plifi e d or iss u e d m ess a g es t h at r ei nf or c e i n d ustr y eff orts t o pr o m ot e o pi oi d pr es cri pti o n a n d us e, i n cl u di n g g ui d eli n es a n d p oli ci es mi ni mi zi n g t h e ris k of a d di cti o n a n d pr o m oti n g o pi oi ds f or c hr o ni c p ai n. ” T h e y als o “l o b bi e d t o c h a n g e l a ws dir e ct e d at c ur bi n g o pi oid us e, str o n gl y criti ci z e d l a n d m ar k C D C 82 54 61 of 258 INDEX NO. 400016/2018 FILED: SUFFOLK COUNTY CLERK 04/11/2019 11:19 AM NYSCEF DOC. NO. 19 RECEIVED NYSCEF: 04/11/2019 V ersi o n D at e d A pr. 1 0, 2 0 1 9 wit h C ert ai n R e d a cti o ns R e m o v e d P er P arti es' A gr e e m e nt 62 of 258 INDEX NO. 400016/2018 FILED: SUFFOLK COUNTY CLERK 04/11/2019 11:19 AM NYSCEF DOC. NO. 19 1 8 9. RECEIVED NYSCEF: 04/11/2019 V ersi o n D at e d A pr. 1 0, 2 0 1 9 wit h C ert ai n R e d a cti o ns R e m o v e d P er P arti es' A gr e e m e nt A P F’s m at eri als a n d pr o g r a ms w er e a v ail a bl e n ati o n all y a n d r e a c h e d m a n y N e w Y or k ers, as i nt e n d e d. F or e x a m pl e, A P F distri b ut e d 1 7, 2 0 0 c o pi es of a g ui d e f or c o ns u m ers s p o ns or e d b y P ur d u e a n d T e v a, e ntitl e d Tr e at m e nt O pti o ns: A G ui d e f or P e o pl e Li vi n g wit h P ai n ( “Tr e at m e nt O pt i o ns”) . T his g ui d e, w hi c h is still a v ail a bl e o nli n e, misl e a di n gl y d o w n pl a ys t h e ris k of a d di cti o n fr o m o pi oi ds, st ati n g t h at p h ysi c al d e p e n d e n c e, w hi c h is a s y m pt o m of a d di cti o n, “ d o es N O T m e a n y o u ar e a d di ct e d, ” a n d s u g g ests t h at o nl y p ers o ns w h o alr e a d y h a v e “ a d di cti v e dis e as e ” h a v e mis us e d o pi oi ds. T h e g ui d e als o d e c e pti v el y st at es t h at “[ d] es pit e t h e gr e at b e n efits of o pi oi ds, t h e y ar e oft e n u n d er- us e d. ” 1 9 0. Tr e at m e nt O pti o ns f als el y st at ed t h at s o m e o pi oi ds h a v e “ n o c eili n g d os e as t h er e is wit h t h e N S AI Ds ” a n d t h er ef or e ar e m or e a p pr o pri at e f or tr e at m e nt of p ai n, a n d attri b ut e d 1 0, 0 0 0 t o 2 0, 0 0 0 a n n u al d e at hs t o N S AI D o v er d os e, e v e n t h o u g h t h e a ct u al fi g ur e is cl os er t o 3, 2 0 0 p er y e ar. 8 6 T h e g ui d e als o misl e a di n gl y s u g g est e d t h at “ o pi oi d a gr e e m e nts ” b et w e e n p ati e nts a n d pr es cri b ers w o ul d “ e ns ur e t h at [t h e p ati e nt] t a k e[s] t h e o pi oi d as pr es cri b e d. ” 1 9 1. A m o n g its ot h er i n d ustr y-f u n d e d pr oj e cts, A P F p u blis h e d E xit W o u n ds , a 2 0 0 9 b o o k writt e n b y D er e k M c Gi n nis, a dis a bl e d v et er a n e m pl o y e d b y A P F, wit h “ assist a n c e ” fr o m A P F st aff. T h e b o o k m a d e n u m er o us misr e pr es e nt ati o ns a b o ut t h e ris k of a d di cti o n ass o ci at e d wit h o pi oi ds , d es cri bi n g t h e dr u gs as “ u n d er us e d ” a n d t h e “ g ol d st a n d ar d of p ai n m e di c ati o ns. ” It misl e a di n gl y d o w n pl a y e d p h ysi c al t ol er a n c e as “si m pl y a ps y c h ol o gi c al pr o c ess t h at d o es n’t o c c ur f or all p e o pl e or wit h all m e di c ati o ns, ” a n d i m pli e d t h at o nl y t h os e w h o a b us e o pi oi ds or us e t h e m r e cr e ati o n all y b e c o m e a d di ct e d. E v e n m or e e gr e gi o usl y, E xit W o u n ds cl ai m e d t h at R o b ert E. T ar o n e et al., N o ns el e cti v e N o n as piri n N o nst er oi d al A nti -I nfl a m m at or y Dr u gs a n d G astr oi nt esti n al Bl e e di n g: R el ati v e a n d A bs ol ut e Ris k Esti m at es Fr o m R e c e nt E pi d e mi ol o gi c St u di es , 1 1 A m. J. T h er a p e uti cs 1 7, 2 1 ( 2 0 0 4). 86 56 63 of 258 INDEX NO. 400016/2018 FILED: SUFFOLK COUNTY CLERK 04/11/2019 11:19 AM NYSCEF DOC. NO. 19 RECEIVED NYSCEF: 04/11/2019 V ersi o n D at e d A pr. 1 0, 2 0 1 9 wit h C ert ai n R e d a cti o ns R e m o v e d P er P arti es' A gr e e m e nt “[l] o n g e x p eri e n c e wit h o pi oi ds s h o ws t h at p e o pl e w h o ar e n ot pr e dis p os e d t o a d di cti o n ar e u nli k el y t o b e c o m e a d di ct e d t o o pi oi d p ai n m e di c ati o ns. ” 1 9 2. E xit W o u n ds als o f ail e d t o dis cl os e t h e ris ks of f at al i nt er a cti o ns b et w e e n o pi oi ds a n d a nti -a n xi et y m e di ci n es k n o w n as b e n z o di a z e pi n es, w hi c h ar e c o m m o nl y pr es cri b e d t o v et er a ns wit h p osttr a u m ati c str ess dis or d er. A c c or di n g t o a V A Offi c e of I ns p e ct or G e n er al R e p ort, 9 6. 4 % of v et er a ns w h o w er e pr es cri b e d o pi oi d dr u gs l o n g -t er m w er e als o pr es cri b e d b e n z o di a z e pi n es, d es pit e t h e i n cr e as e d d a n g er of r es pir at or y d e pr essi o n w h e n t h e t w o dr u gs ar e t a k e n t o g et h er.8 7 1 9 3. E xit W o u n ds als o e x a g g er at e d t h e si d e eff e cts of N S AI Ds, s u c h as st o m a c h ul c ers a n d g astr oi nt esti n al bl e e di n g, w hil e u n d erst ati n g t h e si g nifi c a ntl y m or e s eri o us si d e eff e cts ass o ci at e d wit h o pi oi ds, w hi c h i n cl u d e n a us e a, v o miti n g, c o nsti p ati o n, m e nt al cl o u di n g, a n d, of c o urs e a d di cti o n, o v er d os e, a n d d e at h. 1 9 4. A P F als o p u blis h e d A P oli c y m a k er’s G ui d e t o U n d erst a n di n g P ai n & Its M a n a g e m e nt , w hi c h a m o n g ot h er misl e a di n g st at e m e nts, c h ar a ct eri z e d as a “ m yt h ” t h e i d e a t h at “[ c] hil dr e n c a n e asil y b e c o m e a d di ct e d t o p ai n m e di c ati o ns, ” b e c a us e “[l] ess t h a n 1 p er c e nt of c hil dr e n tr e at e d wit h o pi oi ds b e c o m e a d di ct e d. ” T his p u bli c ati o n als o f als el y ass ert e d t h at p ai n is u n d ertr e at e d d u e t o “ mis c o n c e pti o ns a b o ut o pi oi d a d di cti o n. ” 1 9 5. I n M a y 2 0 1 2, t h e U. S. S e n at e Fi n a n c e C o m mitt e e b e g a n i n v esti g ati n g A P F’s ti es t o o pi oi d m a n uf a ct ur ers. I m m e di at el y t h er e aft er, t h e m a n uf a ct ur ers c ut off f u n di n g f or A P F, w hi c h s h ortl y t h er e aft er f ol d e d , it cl ai m e d, “ d u e t o irr e p ar a bl e e c o n o mi c cir c u mst a n c es. ” D e p’t of V et er a ns Aff airs Offi c e of I ns p e ct or G e n er al, R e vi e w of P ai n M a n a g e m e nt S er vi c es i n V et er a ns H e alt h A d mi nistr ati o n F a ciliti es at i v ( S e pt. 2 7, 2 0 1 8), a v ail a bl e at htt ps:// w w w. v a. g o v/ oi g/ p u bs/ V A OI G -1 6 -0 0 5 3 8 -2 8 2. p df . 87 57 64 of 258 INDEX NO. 400016/2018 FILED: SUFFOLK COUNTY CLERK 04/11/2019 11:19 AM NYSCEF DOC. NO. 19 RECEIVED NYSCEF: 04/11/2019 V ersi o n D at e d A pr. 1 0, 2 0 1 9 wit h C ert ai n R e d a cti o ns R e m o v e d P er P arti es' A gr e e m e nt 65 of 258 INDEX NO. 400016/2018 FILED: SUFFOLK COUNTY CLERK 04/11/2019 11:19 AM NYSCEF DOC. NO. 19 RECEIVED NYSCEF: 04/11/2019 V ersi o n D at e d A pr. 1 0, 2 0 1 9 wit h C ert ai n R e d a cti o ns R e m o v e d P er P arti es' A gr e e m e nt 66 of 258 INDEX NO. 400016/2018 FILED: SUFFOLK COUNTY CLERK 04/11/2019 11:19 AM NYSCEF DOC. NO. 19 RECEIVED NYSCEF: 04/11/2019 V ersi o n D at e d A pr. 1 0, 2 0 1 9 wit h C ert ai n R e d a cti o ns R e m o v e d P er P arti es' A gr e e m e nt l e gisl at ors, p ati e nt a d v o c a c y or g a ni z ati o ns, a n d c o ns u m ers. In 2 0 0 8, AI P M’s e x e c uti v e d ir e ct or ur g e d t h e F D A t o c o nsi d er t h e ris k of u n d er -tr e ati n g p ai n as f ar m or e ur g e nt a n d s eri o us t h a n t h e c al a mit y of i n cr e asi n g o pi oi d di v ersi o n, a b us e, a n d a d di cti o n. 2 0 3. AI P M l e d t h e P ai n A cti o n Alli a n c e t o I m pl e m e nt a N ati o n al Str at e g y ( “ P AI N S ”) pr o gr a m , w hi c h p u blis h e d a st at e p oli c y r e p ort c ar d t h at d o w n gr a d ed a st at e f or r e g ul ati n g o v er pr es cri bi n g of o pi oi ds a n d a bri ef d e n yi n g its r ol e i n cr e ati n g t h e o pi oi d e pi d e mi c. 2 0 4. P ur d u e, J a nss e n a n d E n d o f u n d e d a m e di c al e d u c ati o n g ui d e, O pi oi d Pr es cri bi n g: Cli ni c al T o ols a n d Ris k M a n a g e m e nt Str at e gi es ( “O pi oi d Pr es cri bi n g ”) , w hi c h w as a ut h or e d b y t hr e e m e m b ers of t h e b o ar d of d ir e ct ors of AI P M, o n e of w h o m s er v e d as a p ai d c o ns ult a nt t o J a nss e n. T h e g ui d e, w hi c h w as m a d e a v ail a bl e t o m e m b ers of AI P M at n o c h ar g e, w as i nt e n d e d t o r e a c h pri m ar y c ar e p h ysi ci a ns a n d ot h er h e alt h c ar e pr of essi o n als, a n d l ar g e p orti o ns of t h e g ui d e r e m ai n a v ail a bl e o n li n e. 2 0 5. O pi oi d Pr es cri bi n g mi ni mi z es ris ks ass o ci at e d wit h o pi oi d a d di cti o n, t e a c hi n g pr es cri b ers, f or e x a m pl e, t h at “f e ar of a d di cti o n a n d a b us e pr e v e nts p h ysi ci a ns fr o m pr o p erl y pr es cri bi n g o pi oi ds, p arti c ul arl y f or t h os e wit h a s u bst a n c e a b us e hist or y w h o c o ul d b e n efit fr o m o pi oi ds[.] ” T h e g ui d e d e c e pti v el y i nstr u cts H C Ps t o gi v e p ati e nts w h o pr es e nt s y m pt o ms of “ ps e u d o a d di cti o n ” m or e p ai n tr e at m e nt — i n ot h er w or ds, hi g h er or m or e fr e q u e nt d os a g es of o pi oi ds — b e c a us e “[ w] h e n p ai n is tr e at e d a p pr o pri at el y, a g gr essi v e dr u g -s e e ki n g b e h a vi or c e as es. ” O pi oi d Pr es cri bi n g t ells H C Ps t h at p ati e nts w h o us e o pi oi ds t o “ c o p e wit h str ess [ or] r eli e v e a n xi et y, ” or e v e n p ati e nts w h o “ us e o pi oi ds t o g et hi g h, b ut ... n ot i n a c o m p ulsi v e w a y, ” ar e n ot e x hi biti n g si g ns of a d di cti o n, b ut r at h er ar e dis pl a yi n g “ ot h er f or ms of a b err a nt dr u g us e. ” O pi oi d Pr es cri bi n g f urt h er pr o vi d es t h at e v e n “ b e h a vi ors t h at s u g g est a b us e, ” s u c h as “ u ns c h e d ul e d visits, m ulti pl e t el e p h o n e c alls t o t h e cli ni c, u ns a n cti o n e d d os e es c al ati o ns, 60 67 of 258 INDEX NO. 400016/2018 FILED: SUFFOLK COUNTY CLERK 04/11/2019 11:19 AM NYSCEF DOC. NO. 19 RECEIVED NYSCEF: 04/11/2019 V ersi o n D at e d A pr. 1 0, 2 0 1 9 wit h C ert ai n R e d a cti o ns R e m o v e d P er P arti es' A gr e e m e nt 68 of 258 INDEX NO. 400016/2018 FILED: SUFFOLK COUNTY CLERK 04/11/2019 11:19 AM NYSCEF DOC. NO. 19 RECEIVED NYSCEF: 04/11/2019 V ersi o n D at e d A pr. 1 0, 2 0 1 9 wit h C ert ai n R e d a cti o ns R e m o v e d P er P arti es' A gr e e m e nt 69 of 258 INDEX NO. 400016/2018 FILED: SUFFOLK COUNTY CLERK 04/11/2019 11:19 AM NYSCEF DOC. NO. 19 RECEIVED NYSCEF: 04/11/2019 V ersi o n D at e d A pr. 1 0, 2 0 1 9 wit h C ert ai n R e d a cti o ns R e m o v e d P er P arti es' A gr e e m e nt 70 of 258 INDEX NO. 400016/2018 FILED: SUFFOLK COUNTY CLERK 04/11/2019 11:19 AM NYSCEF DOC. NO. 19 RECEIVED NYSCEF: 04/11/2019 V ersi o n D at e d A pr. 1 0, 2 0 1 9 wit h C ert ai n R e d a cti o ns R e m o v e d P er P arti es' A gr e e m e nt 71 of 258 INDEX NO. 400016/2018 FILED: SUFFOLK COUNTY CLERK 04/11/2019 11:19 AM NYSCEF DOC. NO. 19 RECEIVED NYSCEF: 04/11/2019 V ersi o n D at e d A pr. 1 0, 2 0 1 9 wit h C ert ai n R e d a cti o ns R e m o v e d P er P arti es' A gr e e m e nt 72 of 258 INDEX NO. 400016/2018 FILED: SUFFOLK COUNTY CLERK 04/11/2019 11:19 AM NYSCEF DOC. NO. 19 RECEIVED NYSCEF: 04/11/2019 V ersi o n D at e d A pr. 1 0, 2 0 1 9 wit h C ert ai n R e d a cti o ns R e m o v e d P er P arti es' A gr e e m e nt 5. T h e M a n uf a ct u r e r D ef e n d a nts T a r g et e d T h ei r S u r r e ptiti o us C a m p ai g n at V ul n e r a bl e P o p ul ati o ns 2 2 7. T he M a n uf a ct ur er D ef e n d a nts s p e cifi c all y t ar g et e d t h eir m ar k eti n g at t w o v ul n er a bl e p o p ul ati o ns —t h e el d erl y a n d v et er a ns. 2 2 8. El d erl y p ati e nts t a ki n g o pi oi ds h a v e b e e n f o u n d t o b e e x p os e d t o el e v at e d fr a ct ur e ris ks, a gr e at er ris k f or h os pit ali z ati o ns, a n d i n cr e as e d v ul n er a bilit y t o a d v ers e dr u g eff e cts a n d i nt er a cti o ns, s u c h as r es pir at or y d e pr essi o n, w hi c h o c c urs m or e fr e q u e ntl y i n el d erl y p ati e nts. 2 2 9. T h e M a n uf a ct ur er D ef e n d a nts pr o m ot e d t h e n oti o n — wit h o ut a d e q u at e s ci e ntifi c f o u n d ati o n —t h at t h e el d erl y ar e p arti c ul arl y u nli k el y t o b e c o m e a d di ct e d t o o pi oi ds. As d es cri b e d a b o v e, t h e A G S 2 0 0 9 G ui d eli n es, f or e x a m pl e, w hi c h P ur d u e, E n d o, a n d J a nss e n p u bli ci z e d , d es cri b e d t h e ris k of a d di cti o n as “ e x c e e di n gl y l o w i n ol d er p ati e nts wit h n o c urr e nt or p ast hist or y of s u bst a n c e a b us e ” ( e m p h asis a d d e d). As a n ot h er e x a m pl e, a n E n d o -s p o ns or e d C M E p ut o n b y NI P C, P ersist e nt P ai n i n t h e Ol d er A d ult , t a u g ht t h at pr es cri bi n g o pi oi ds t o ol d er p ati e nts c arri e d “ p ossi bl y l ess p ot e nti al f or a b us e t h a n i n y o u n g er p ati e nts. ” C o ntr ar y t o t h es e ass erti o ns, h o w e v er, a 2 0 1 0 st u d y e x a mi ni n g o v er d os es a m o n g l o n g -t er m o pi oi d us ers f o u n d t h at p ati e nts 6 5 or ol d er w er e a m o n g t h os e wit h t h e l ar g est n u m b er of s eri o us o v er d os es. 2 3 0. A st u d y s h o w e d t h at v et er a ns r et ur ni n g fr o m Ir a q a n d Af g h a nist a n w h o w er e pr es cri b e d o pi oi ds h a v e a hi g h er i n ci d e n c e of a d v ers e cli ni c al o ut c o m es, s u c h as o v er d os es a n d s elf-i nfli ct e d a n d a c ci d e nt al i nj uri es. 9 0 A 2 0 0 8 s ur v e y s h o w e d t h at pr es cri pti o n dr u g mis us e a m o n g 90 Ir a q a n d Af g h a nist a n V et er a ns: N ati o n al Fi n di n gs fr o m V A R esi d e nti al Tr e at m e nt Pr o gr a ms, htt ps:// w w w n c bi. nl m. ni h. g o v/ p m c/ arti cl es/ P M C 3 6 6 1 2 7 6/ p df/ ni h ms 4 6 8 7 2 7. p df (l ast visit e d M ar. 2 5, 2 0 1 9). 66 73 of 258 INDEX NO. 400016/2018 FILED: SUFFOLK COUNTY CLERK 04/11/2019 11:19 AM NYSCEF DOC. NO. 19 RECEIVED NYSCEF: 04/11/2019 V ersi o n D at e d A pr. 1 0, 2 0 1 9 wit h C ert ai n R e d a cti o ns R e m o v e d P er P arti es' A gr e e m e nt 74 of 258 INDEX NO. 400016/2018 FILED: SUFFOLK COUNTY CLERK 04/11/2019 11:19 AM NYSCEF DOC. NO. 19 RECEIVED NYSCEF: 04/11/2019 V ersi o n D at e d A pr. 1 0, 2 0 1 9 wit h C ert ai n R e d a cti o ns R e m o v e d P er P arti es' A gr e e m e nt g a ps i n t h e di v ersi o n pi p eli n e u n d er t h eir s u p er visi o n . Ev e n if t h e p ol i ci es h a d b e e n stri ctl y e nf or c e d, t h er ef or e, t h e y c o ul d n ot h a v e b e e n eff e cti v e i n st o p pi n g t h e fl o w of i m pr o p erl ydistri b ut e d o pi oi ds. 2 3 6. F or e x a m pl e, n o n e of t h e Distri b ut or D ef e n d a nts’ writt e n p oli ci es a d e q u at el y a d dr ess e d t h e ris k of usi n g s al es p ers o n nel t o c o m m u ni c at e wit h, a n d pr o vi d e a c c ur at e c o m pli a n c e r el at e d i nf or m ati o n fr o m, t h eir p h ar m a c y c ust o m ers. I n d e e d, t h eir writt e n p oli ci es s o m eti m es a ct u all y e x a c er b at e d t h at pr o bl e m. F or e x a m pl e, s al es p e o pl e w o ul d w ar n c ust o m ers t h at t h e y w er e a p pr o a c hi n g t h eir m o nt hl y t hr es h ol d li mit s f or or d eri n g c ert ai n c at e g ori es of c o ntr oll e d s u bst a n c es, p utti n g t h e m i n a p ositi o n t o assist t h eir c ust o m ers i n e v a di n g c o m pli a n c e r e vi e ws t h at w o ul d h a v e ot h er wis e o c c urr e d b y m a ni p ul ati n g t h e ti mi n g a n d v ol u m e of t h eir or d ers. 2 3 7. Li k e wis e, n o n e of t h e Distri b ut or D ef e n d a nts e n a ct e d p oli ci es t h at a d e q u at el y s af e g u ar d e d a g ai nst c ust o m ers r e c ei vi n g u nj ustifi a bl e i n cr e as es i n t h eir m o nt hl y t hr es h ol d all o w a n c e f or o pi oi d pr o d u ct or d ers. I nst e a d, t h os e p oli ci es dir e ct e d c o m pli a n c e st aff t o r el y pri n ci p all y o n i nf or m ati o n pr o vi d e d b y t h e c ust o m ers t h e ms el v es i n or d er t o j ustif y s u c h i n cr e as es, a n d r ar el y m a n d at e d i n d e p e n d e nt i n v esti g ati o n b ef or e a t hr es h ol d all o w a n c e f or o pi oi ds c o ul d b e i n cr e as e d. 2 3 8. M ost c o ns e q u e nti all y, n o n e of t h e Distri b ut or D ef e n d a nts e n a ct e d p oli ci es t h at r e q uir e d c ust o m ers t o b e s us p e n d e d fr o m or d eri n g c o ntr oll e d s u bst a n c es, or t er mi n at e d e ntir el y, aft er t h os e c ust o m ers h a d dis pl a y e d c o nsist e nt ( a n d e v e n y e ars -l o n g) p att er ns of m a ki n g s us pi ci o us or d ers t h at e x c e e d e d t h eir est a blis h e d t hr es h ol d li mits. 2 3 9. T his br o a d f ail ur e of t h e Distri b ut or D ef e n d a nts t o f ulfill t h eir e x pli cit st at ut or y d uti es t o cr e at e eff e cti v e a nti -di v ersi o n p oli ci es w as t h e n c o m p o u n d e d i n e a c h c as e b y a c o m m o n 68 75 of 258 INDEX NO. 400016/2018 FILED: SUFFOLK COUNTY CLERK 04/11/2019 11:19 AM NYSCEF DOC. NO. 19 RECEIVED NYSCEF: 04/11/2019 V ersi o n D at e d A pr. 1 0, 2 0 1 9 wit h C ert ai n R e d a cti o ns R e m o v e d P er P arti es' A gr e e m e nt p att er n of p r a cti c al f ail ur es, w hi c h r e pr es e nt e d s e p ar at e vi ol ati o ns of t h e N Y C S A’s r e q uir e m e nt t h at t h e y m ai nt ai n eff e cti v e a nti - di v ersi o n p oli ci es. 2 4 0. First , t h e Distri b ut or D ef e n d a nts r o uti n el y f ail e d t o st aff t h eir c o m pli a n c e f u n cti o ns wit h q u alifi e d p ers o n n el, a n d f ail e d t o pr o vi d e t h os e c o m pli a n c e e m pl o y e es a n d t h eir s al es r e pr es e nt ati v es wit h a p pr o pri at e tr ai ni n g. E v e n fr o nt-li n e c o m pli a n c e f u n cti o ns, s u c h as a p pr o vi n g t hr es h ol d i n cr e as es, d et e cti n g, bl o c ki n g, a n d r e p orti n g s us pi ci o us or d ers, a n d t er mi n ati n g a n d/ or s us p e n di n g c ust o m ers, w er e oft e n assi g n e d t o o p er ati o ns, s al es a n d a d mi nistr ati v e e m pl o y e es w h o h a d n o e x p eri e n c e wit h r e g ul at or y c o m pli a n c e of a n y ki n d. 2 4 1. S e c o n d, n o n e of t h e Distri b ut or D ef e n d a nts h a d a c o nsist e nt pr a cti c e of c o n d u cti n g a p pr o pri at e d u e dili g e n c e of eit h e r pr os p e cti v e n e w c u st o m ers or t h eir e xisti n g c ust o m ers. Ne w c ust o m ers w er e r o uti n el y o n b o ar d e d d es pit e t h e a c k n o wl e d g e d pr es e n c e of u nr es ol v e d r e d fl a gs, a n d n o n e of t h e Distri b ut or D ef e n d a nts e ns ur e d t h at a d diti o n al i n v esti g ati o n s w er e c o n d u ct e d w h e n e x isti n g c ust o m ers m a d e s us pi ci o us or d ers, e v e n w h e n c o m pli a n c e st aff fl a g g e d t h os e or d ers as s us pi ci o us, bl o c k e d t h e m, a n d r e p ort e d t h e m t o t h e St at e. 2 4 2. I n d e e d, t h e Distri b ut or D ef e n d a nts r o uti n el y all o w e d t h eir c ust o m ers t o m a k e m ulti pl e s us pi ci o us or d ers wi t hi n t h e s a m e m o nt h, w e e k, or e v e n y e ar, wit h o ut c o n d u cti n g a n y a d diti o n al d u e dili g e n c e of t h os e c ust o m ers. E v e n w h er e c ust o m ers h a d t o b e bl o c k e d fr o m or d eri n g o pi oi ds i n e x c ess of t h eir m o nt hl y t hr es h ol d all o w a n c e m ulti pl e ti m es wit hi n t h at m o nt h, t h e Distri b ut or D ef e n d a nts w o ul d all o w t h os e c ust o m ers t o r es u m e or d eri n g o pi oi ds t h e n e xt m o nt h, at t h e s a m e v ol u m e l e v els as b ef or e, wit h o ut r e q uiri n g a n y f oll o w u p i n v esti g ati o n. 2 4 3. A n d n o n e of t h e Distri b ut or D ef e n d a nts c o n d u ct e d p eri o di c, u n e x p e ct e d d u e - dili g e n c e a u dits of t h eir c ust o m ers, e v e n a m o n g t h e e asil y i d e ntifi a bl e a n d r el ati v el y s m all gr o u ps of p h ar m a ci es t h at c o nsist e ntl y or d er e d t h e hi g h est v ol u m es of o pi oi ds. I nst e a d, t h es e p h ar m a ci es 69 76 of 258 INDEX NO. 400016/2018 FILED: SUFFOLK COUNTY CLERK 04/11/2019 11:19 AM NYSCEF DOC. NO. 19 RECEIVED NYSCEF: 04/11/2019 V ersi o n D at e d A pr. 1 0, 2 0 1 9 wit h C ert ai n R e d a cti o ns R e m o v e d P er P arti es' A gr e e m e nt c o ul d g o f or y e ars wit h o ut t h e Distri b ut or D ef e n d a nts u p d ati n g t h eir k n o wl e d g e of t h os e c ust o m ers’ pr es cri b er b as e, c ust o m er tr affi c p att er ns, a n d ot h er r el e v a nt st or e c o n diti o ns. E v e n w h e n t h os e p h ar m a ci es w er e s cr uti ni z e d, t h e c ust o m er w as oft e n w ar n e d i n a d v a n c e. 2 4 4. T hir d , t h e Distri b ut or D ef e n d a nts r o uti n el y f ail ed t o d et e ct, bl o c k a n d r e p ort t h eir c ust o m ers’ s us pi ci o us or d ers f or o pi oi ds. 2 4 5. W hil e t h e Distri b ut or D ef e n d a nts’ p oli ci es n o mi n all y all o w e d f or c o m pli a n c e st aff t o i d e ntif y a n y or d er as s us pi ci o us b as e d o n f a ct ors s u c h as t h e n o n-e x h a usti v e crit eri a i d e ntifi e d b y t h e N Y C S A , as a m att er of pr a cti c e, o nl y or d ers t h at e x c e e d e d a c ust o m er’s m o nt hl y t hr es h ol d li mit f or a p arti c ul ar c at e g or y of c o ntr oll e d s u bst a n c es w o ul d a ct u all y tri g g er a c o m pli a n c e r e vi e w. As a r es ult, u nt ol d n u m b ers of o pi oi d or d ers t h at s h o ul d h a v e b e e n r e vi e w e d d u e t o t h eir u n us u al si z e or fr e q u e n c y, or t h eir d e p art ur e fr o m t h e c ust o m ers’ n or m al or d eri n g p att er ns, w er e n e v er e v e n c h e c k e d t o d et er mi n e w h et h er t h e y w er e s us pi ci o us. 2 4 6. B e c a us e t h e Distri b ut or D ef e n d a nts r o uti n el y all o w e d t h eir c ust o m ers t o o bt ai n i nf or m ati o n a b o ut t h e m o nt hl y t hr es h ol d li mits g o v er ni n g t h eir or d ers of o pi oi d pr o d u cts, o r d ers c ust o m ers m a d e wi t hi n t h e li mits aft er b ei n g e n a bl e d t o “ g a m e ” t h e m w er e i m pr o p erl y e x cl u d e d fr o m c o m pli a n c e r e vi e w, w h e n t h e y all s h o ul d h a v e b e e n c h e c k e d t o s e e w h et h er t h e c ust o m ers w er e d eli b er at el y str u ct uri n g t h eir or d ers t o e v a d e s cr uti n y. 2 4 7. E v e n as t o or d ers t h at e x c e e d e d c ust o m ers’ m o nt hl y t hr es h ol ds, t h e Distri b ut or D ef e n d a nts , o v er v ar yi n g ti m e p eri o ds, r o uti n el y f ail e d t o a c c ur at el y i d e ntif y t h os e or d ers as s us pi ci o us. Inst e a d , t h e y r el e as e d t h os e or d ers f or d eli v er y b as e d o n p erf u n ct or y a n d u n v erifi e d i nf or m ati on pr o vi d e d b y t h e c ust o m er, or f or n o d o c u m e nt e d r e as o n at all. 2 4 8. M or e o v er, e v e n w h e n t h e Distri b ut or D ef e n d a nts di d i d e ntif y or d ers as s us pi ci o us a n d di d bl o c k t h e m fr o m d eli v er y t o c ust o m ers, t h e y r o uti n el y f ail e d t o r e p ort t h os e s us pi ci o us 70 77 of 258 INDEX NO. 400016/2018 FILED: SUFFOLK COUNTY CLERK 04/11/2019 11:19 AM NYSCEF DOC. NO. 19 RECEIVED NYSCEF: 04/11/2019 V ersi o n D at e d A pr. 1 0, 2 0 1 9 wit h C ert ai n R e d a cti o ns R e m o v e d P er P arti es' A gr e e m e nt or d ers t o t he St at e, s o m eti m es g oi n g m o nt hs or y e ars wit h o ut r e p orti n g a n y at all . W h e n t h e y di d m a k e s us pi ci o us -or d er r e p orts, t h e r e p orts w er e r o uti n el y i n c o m pl et e, f or e x a m pl e, b y f aili n g t o i d e ntif y all of t h e r el e v a nt s us pi ci o us or d ers f or a c ust o m er, e v e n w h e n t h e y w er e m a d e wit hi n t h e s a m e m o nt h, w e e k, or e v e n d a y. 2 4 9. F o urt h , t h e Distri b ut or D ef e n d a nts f ail e d t o a ct t o s us p e n d c ust o m ers fr o m or d eri n g c o ntr oll e d s u bst a n c e s, l et al o n e t er mi n at e t h eir a c c o u nts, e v e n aft er c o m pli a n c e st aff h a d bl o c k e d a n d r e p ort e d d o z e ns, or e v e n h u n dr e ds, of s us pi ci o us or d ers fr o m t h os e c ust o m ers. I n t h e r el ati v el y r ar e i nst a n c es w h er e a c ust o m er h a d b e e n t er mi n at e d or s us p e n d e d, t h e Distri b ut or D ef e n d a nts all o w e d t h e m t o r ei nst at e t h eir a c c o u nts, or o p e n a c c o u nts u n d er n e w b usi n ess n a m es, wit h o ut i n v esti g ati n g a n d r es ol vi n g t h e iss u es t h at h a d l e d t o t h e i niti al t er mi n ati o n or s us p e nsi o n. 2 5 0. Fift h , n o n e of t h e D ef e n d a nt Distri b ut ors s yst e m ati c all y st or e d, or g a ni z e d, a n d m a d e a c c essi bl e f or r ef er e n c e i nf or m ati o n a b o ut t h eir c ust o m ers or t h eir o w n ers, p h ar m a cists, a n d t o p pr es cri b ers, i n or d er t o all o w f or m e a ni n gf ul f ut ur e c o m pli a n c e eff orts. 2 5 1. T h e D ef e n d a nt Distri b ut ors di d n ot r e q uir e c o m pli a n c e st aff t o o bt ai n c ust o m ers’ pr es cri b er i nf or m ati o n, a n d s o m e a ct u all y c h a n g e d t h eir p oli ci es t o f or bi d s u c h i n q uiri es, willf ull y bli n di n g t h e ms el v es t o o n e of t h e m ost i m p ort a nt i n di c at ors of di v ersi o n. 2 5 2. Whil e c o m pli a n c e st aff a n d/ or t hir d -p art y i n v esti g at ors r et ai n e d b y t h e D ef e n d a nt Distri b ut ors w o ul d s o m eti m es fl a g pr es cri b ers as s us pi ci o us i n t h e c o urs e of c o n d u cti n g d u e dili g e n c e of a p h ar m a c y, t h at i nf or m ati o n w as n ot st or e d or s h ar e d i n a n y us e a bl e f or m at. As a r es ult, w h e n t h e s a m e s us pi ci o us pr es cri b er a p p e ar e d a m o n g a n ot h er p h ar m a c y’s t o p pr es cri b ers, t h e c o m pli a n c e st aff h a n dli n g t h at s u bs e q u e nt d u e dili g e n c e i n v esti g ati o n w o ul d h a v e n o w a y of k n o wi n g a b o ut t his ris k t h at h a d alr e a d y b e e n i d e ntifi e d, u nl ess t h e y h a d p ers o n all y h a n dl e d t h e e arli er i n v esti g ati o n, a n d h a p p e n e d t o r e m e m b er t h e pr es cri b er’s n a m e. 71 78 of 258 INDEX NO. 400016/2018 FILED: SUFFOLK COUNTY CLERK 04/11/2019 11:19 AM NYSCEF DOC. NO. 19 2 5 3. RECEIVED NYSCEF: 04/11/2019 V ersi o n D at e d A pr. 1 0, 2 0 1 9 wit h C ert ai n R e d a cti o ns R e m o v e d P er P arti es' A gr e e m e nt Si mil arl y, t h e y m a d e n o eff ort t o c oll e ct a n d c o m p ar e i nf or m ati o n a b o ut p h ar m a ci es t h at m a d e hi g h-v ol u m e or d ers of o pi oi ds, h a d b e e n fl a g g e d f or m a ki n g s us pi ci o us or d ers, or h a d b e e n s us p e n d e d or t er mi n at e d f or s us pi ci o us or ill e g al pr a cti c es. As a r es ult, c o m pli a n c e st aff h a d n o w a y of k n o wi n g t h at a p h ar m a c y t h e y w er e i n v esti g ati n g s h ar e d or d eri n g p att er ns or t o p pr es cri b ers wit h a n ot h er ris k y, s us pi ci o us, a n d/ or pr e vi o usl y dis ci pli n e d c ust o m er. 2 5 4. Si xt h , t h e Distri b ut or D ef e n d a nts f ail e d t o pr o m ptl y r e p ort c o m pli a n c e vi ol ati o ns t o t h e St at e. I n d e e d, ev e n w h e n t h e y a ct u all y d et e ct e d f ail ur es i n t h eir c o m pli a n c e s yst e ms, t h e y m a d e n o eff ort t o r e p ort t h os e k n o w n i n ci d e nts. M or e br o a dl y, d u e t o t h e c o m bi n ati o n of s yst e m ati c f ail ur es ri d dli n g t h eir c o m pli a n c e s yst e ms d es cri b e d a b o v e, n o n e of t h e Distri b ut or D ef e n d a nts h a d t h e c o m p et e n c e t o eff e cti v el y d et e ct t h eir o w n vi ol ati o ns. 2 5 5. F or e x a m pl e, if a n y of t h e r el e v a nt Distri b ut or D ef e n d a nts h a d c o n d u ct e d p eri o di c a u dits of t h eir o w n r e c or ds of c ust o m ers’ or d ers, t h os e c ust o m ers’ p att er ns of or d eri n g i n e x c ess of t h eir m o nt hl y t hr es h ol d all o w a n c e f or o pi oi d pr o d u cts, t h e n u m b er of ti m es t h os e or d ers w er e r el e as e d wit h o ut j ustifi c ati o n, a n d t h e n u m b er of ti m es t h os e or d ers w er e bl o c k e d as s us pi ci o us wit h o ut b ei n g r e p ort e d t o g o v er n m e nt a g e n ci es a n d/ or tri g g eri n g a d diti o n al i n v esti g ati o ns, s us p e nsi o ns, or t er mi n ati o ns, t h e y w o ul d h a v e e a c h b e e n o bli g e d t o r e p ort h u n dr e ds, if n ot t h o us a n ds, of N Y C S A vi ol ati o ns at a ti m e. 2 5 6. I n s h ort, t h e Distri b ut or D ef e n d a nts d eli b er at el y li e d t o t h e St at e, b ot h e x pr essl y a n d b y o missi o n, y e ar i n a n d y e ar o ut, a b o ut t h e eff e cti v e n ess of t h eir c o m pli a n c e s yst e ms a n d t h e i nci d e n c e of N Y C S A vi ol ati o ns, s o t h at t h e y c o ul d fr a u d ul e ntl y m ai nt ai n t h eir li c e ns es t o c o nti n u e d oi n g b usi n ess i n N e w Y or k. 72 79 of 258 FILED: SUFFOLK COUNTY CLERK 04/11/2019 11:19 AM NYSCEF DOC. NO. 19 INDEX NO. 400016/2018 RECEIVED NYSCEF: 04/11/2019 80 of 258 INDEX NO. 400016/2018 FILED: SUFFOLK COUNTY CLERK 04/11/2019 11:19 AM NYSCEF DOC. NO. 19 RECEIVED NYSCEF: 04/11/2019 V ersi o n D at e d A pr. 1 0, 2 0 1 9 wit h C ert ai n R e d a cti o ns R e m o v e d P er P arti es' A gr e e m e nt 81 of 258 INDEX NO. 400016/2018 FILED: SUFFOLK COUNTY CLERK 04/11/2019 11:19 AM NYSCEF DOC. NO. 19 RECEIVED NYSCEF: 04/11/2019 V ersi o n D at e d A pr. 1 0, 2 0 1 9 wit h C ert ai n R e d a cti o ns R e m o v e d P er P arti es' A gr e e m e nt ori gi n all y f or m e d a n d i n c or p or at e d i n N e w Y or k ( u p u ntil M a y 2 0 0 4, w h e n it w as m er g e d i nt o P F L a bs), s ol d a r a n g e of pr o d u cts. R a y m o n d w as t h e h e a d e x e c uti v e of t h e f a mil y’s U . S. b usi n ess w hil e M orti m er r a n t h e U . K. si d e of t h e b usi n ess. 2 6 5. T h e n i n t h e 1 9 8 0s, P F C o. a n d its ass o ci at e d c o m p a ni es e nt er e d t h e o pi oi d b usi n ess. T h e S a c kl er F a mili es, t hr o u g h a U . K. affili at e, a c q uir e d a S c ottis h dr u g pr o d u c er t h at h a d d e v el o p e d a s ust ai n e d -r el e as e t e c h n ol o g y s uit a bl e f or m or p hi n e. P F C o. m ar k et e d t his e xt e n d e d-r el e as e m or p hi n e as M S C o nti n, w hi c h q ui c kl y b e c a m e a b est s ell er, pri n ci p all y f or m a n a gi n g c a n c er a n d e n d- of- lif e p ai n. 2 6 6. Wit h M S C o nti n’s p at e nt e x pir ati o n l o o mi n g, h o w e v er, t h e S a c kl er F a mili es s e ar c h e d f or a dr u g t o r e pl a c e it. Ar o u n d t h at ti m e, Ri c h ar d S a c kl er, R a y m o n d S a c kl er’s s o n , b e c a m e m or e i n v ol v e d i n t h e m a n a g e m e nt of t h e f a mili es’ b usi n ess es. Ri c h ar d h a d gr a n d a m biti o ns f or t h e f a mil y busi n ess; a c c or di n g t o a l o n g -ti m e P ur d u e s al es r e pr es e nt ati v e, Ri c h ar d r e all y w a nt e d P ur d u e t o b e bi g — “I m e a n r e all y bi g. ”9 5 Ri c h ar d b eli e v e d P ur d u e s h o ul d d e v el o p a n ot h er us e f or its “ C o nti n ” ti m e d-r el e as e s yst e m. 2 6 7. I n 1 9 9 0, P ur d u e’s vi c e pr esi d e nt of cli ni c al r es e ar c h, R o b ert K ai k o, s e nt a m e m o t o Ri c h ar d a n d ot h er e x e c uti v es r e c o m m e n di n g t h at t h e c o m p a n y o x y c o d o n e. 96 w or k o n a pill c o nt ai ni n g A c c or di n gl y, P ur d u e d e v el o p e d “ O x y C o nti n ”— a p ur e o x y c o d o n e i n a ti m e -r el e as e f or m ul a si mil ar t o M S C o nti n, m or e p ot e nt t h a n m or p hi n e, a n d a v ail a bl e i n d os es f ar i n e x c ess of ot h er pr es cri pti o n o pi oi ds. C hrist o p h er Gl a z e k, T h e S e cr eti v e F a mil y M a ki n g Billi o ns Fr o m T h e O pi oi d Crisis , Es q uir e M a g a zi n e, O ct. 1 6, 2 0 1 7 ( q u oti n g P ur d u e s al es r e pr es e nt ati v e S h el b y S h er m a n) ( e m p h asis i n ori gi n al). 96 H arri et R y a n, s u pr a n ot e 2 1, P ur d u e m e m o. 95 75 82 of 258 INDEX NO. 400016/2018 FILED: SUFFOLK COUNTY CLERK 04/11/2019 11:19 AM NYSCEF DOC. NO. 19 2 6 8. RECEIVED NYSCEF: 04/11/2019 V ersi o n D at e d A pr. 1 0, 2 0 1 9 wit h C ert ai n R e d a cti o ns R e m o v e d P er P arti es' A gr e e m e nt Wit h Ri c h ar d S a c kl er l e a di n g t h e c h ar g e, P ur d u e l a u n c h e d its bl o c k b ust er dr u g O x y C o nti n i n 1 9 9 6 wit h t h e e x pli cit str at e g y of p ositi o ni n g it as a n o pi oi d t h at p h ysi ci a ns c o ul d r es p o nsi bl y pr es cri b e t o a d dr ess a br o a d s p e ctr u m of p ai n r eli ef, i n c o ntr ast t o e xisti n g ( a n d, p ar a d o xi c all y, l ess p ot e nt) o pi oi ds o n t h e m ar k et, w hi c h h a d t h e “sti g m a ” of o nl y b ei n g a p pr o pri at e f or c a n c er a n d e n d- of-lif e p ai n. 2 6 9. T his str at e g y w as d e vis e d fr o m P ur d u e’s e x p eri e n c e wit h M S C o nti n a n d its f o c us gr o u ps r e v e ali n g t h at d o ct ors w er e c o n c er n e d a b o ut t h e a b us e p ot e nti al of o pi oi ds, w hi c h w as i d e ntifi e d as t h e “ bi g g est n e g ati v e ” t h at mi g ht pr e v e nt wi d es pr e a d us e of t h e dr u g. A m ark eti n g m e m o s e nt t o P ur d u e’s t o p s al es e x e c uti v es i n M ar c h 1 9 9 5 r e c o m m e n d e d t h at if P ur d u e c o ul d s h o w t h at t h e ris k of a b us e w as l o w er wit h O x y C o nti n t h a n wit h tr a diti o n al i m m e di at e-r el e as e n ar c oti cs, it w o ul d i n cr e as e us a g e f or n o n-c a n c er p ai n. 2 7 0. T o a c hi e v e t h at m ar k eti n g g o al a n d a v oi d t h e “sti g m a ” att a c h e d t o l ess p ot e nt o pi oi ds, P ur d u e p ers u a d e d t h e assi g n e d F D A e x a mi n er, o v er i nt er n al o bj e cti o ns wit hi n t h e F D A, t o a p pr o v e a l a b el st ati n g: “ D el a y e d a bs or pti o n as pr o vi d e d b y O x y C o nti n t a bl ets, is b eli e v e d t o r e d u c e t h e a b us e li a bilit y of a dr u g. ” 2 7 1. T h e b asis f or t his r e d u c e d a b us e li a bilit y cl ai m w as e ntir el y t h e or eti c al a n d n ot b as e d o n a n y a ct u al r es e ar c h, d at a, or e m piri c al s ci e ntifi c s u p p ort, a n d t h e F D A ulti m at el y p ull e d t his l a n g u a g e fr o m O x y C o nti n’s l a b el i n 2 0 0 1. 2 7 2. N o n et h el ess, as s et f ort h i n d et ail b el o w, P ur d u e m a d e r e d u c e d ris k of a d di cti o n a n d a b us e t h e c or n erst o n e of its m ar k eti n g eff orts. 2 7 3. At t h e O x y C o nti n l a u n c h p art y, Ri c h ar d S a c kl er as k e d t h e a u di e n c e t o i m a gi n e a s eri es of n at ur al dis ast ers: a n e art h q u a k e, a v ol c a ni c er u pti o n, a h urri c a n e, a n d a bli z z ar d. H e s ai d: 76 83 of 258 INDEX NO. 400016/2018 FILED: SUFFOLK COUNTY CLERK 04/11/2019 11:19 AM NYSCEF DOC. NO. 19 RECEIVED NYSCEF: 04/11/2019 V ersi o n D at e d A pr. 1 0, 2 0 1 9 wit h C ert ai n R e d a cti o ns R e m o v e d P er P arti es' A gr e e m e nt 84 of 258 INDEX NO. 400016/2018 FILED: SUFFOLK COUNTY CLERK 04/11/2019 11:19 AM NYSCEF DOC. NO. 19 RECEIVED NYSCEF: 04/11/2019 V ersi o n D at e d A pr. 1 0, 2 0 1 9 wit h C ert ai n R e d a cti o ns R e m o v e d P er P arti es' A gr e e m e nt 85 of 258 FILED: SUFFOLK COUNTY CLERK 04/11/2019 11:19 AM NYSCEF DOC. NO. 19 INDEX NO. 400016/2018 RECEIVED NYSCEF: 04/11/2019 86 of 258 FILED: SUFFOLK COUNTY CLERK 04/11/2019 11:19 AM NYSCEF DOC. NO. 19 INDEX NO. 400016/2018 RECEIVED NYSCEF: 04/11/2019 87 of 258 INDEX NO. 400016/2018 FILED: SUFFOLK COUNTY CLERK 04/11/2019 11:19 AM NYSCEF DOC. NO. 19 2 8 6. RECEIVED NYSCEF: 04/11/2019 V ersi o n D at e d A pr. 1 0, 2 0 1 9 wit h C ert ai n R e d a cti o ns R e m o v e d P er P arti es' A gr e e m e nt P ur d u e str at e gi c all y dir e ct e d its d et ail ers t o f o c us t h eir misl e a di n g m ess a gi n g o n t w o k e y t ar g ets: pri m ar y c ar e pr o vi d ers a n d h e a v y o pi oi d pr es cri b ers. First, P ur d u e t ar g et e d pri m ar y c ar e p h ysi ci a ns a n d ot h ers u nf a mili ar wit h p ai n m a n a g e m e nt — i n cl u di n g “ p h ysi ci a ns still i n tr ai ni n g ”—t o p ositi o n O x y C o nti n as t h e dr u g t h e y c o ul d “st art wit h a n d st a y wit h ” t o m a n a g e t h eir p ati e nts’ p ai n r eli ef, e v e n if t h e y di d n ot pr e vi o usl y m a n a g e p ati e nts’ p ai n . 2 8 7. T his str at e g y is r efl e ct e d i n P ur d u e s al es r e pr es e nt ati v es’ c all n ot es. I n 2 0 0 8, t hr e e c at e g ori es of pr o vi d ers c o m pris e d n e arl y o n e -t hir d of all s al es c alls i n N e w Y or k: i nt er n al m e di ci n e, f a mil y m e di ci n e, a n d n urs e pr a ctiti o n ers. C o nsi d eri n g o v er o n e -t hir d of s al es c alls di d n ot i d e ntif y a n y s p e ci alt y, t h at p er c e nt a g e is al m ost c ert ai nl y hi g h er. 2 8 8. F or its s e c o n d t ar g et, P ur d u e a n al y z e d v ast d at a s ets t o i d e ntify t h e hi g h est v ol u m e o pi oi d pr es cri b ers s o det ail ers c o ul d r e p e at e dl y visit t h e m t o e n c o ur a g e s wit c hi n g t o P ur d u e’s o pi oi d pr o d u cts a n d “titr at e ” t o hi g h er d os es. 2 8 9. T his q u esti o n a bl e d et aili n g pr a cti c e als o e m er g es fr o m c a ll n ot es. F or e x a m pl e, P ur d u e d et ail ers c all e d o n a p ai n- m a n a g e m e nt f a cilit y wit h t hr e e l o c ati o ns i n c e ntr al N e w Y or k o v er 2 5 0 ti m es i n 2 0 1 7 al o n e. T his f a cilit y h a d a l o n g hist or y wit h P ur d u e — i n 2 0 1 1, t h e f a cilit y’s cli ni c al r es e ar c h dir e ct or e nt er e d i nt o a c o ntr a ct wit h P ur d u e t o b e a “ c o ns ult a nt . ” 2 9 0. T o e ns ur e t h e s u c c ess of its d et aili n g str at e g y, P ur d u e d a n gl e d fi n a n ci al i n c e nti v es t o dri v e its s al es f or c e t o i n cr e as e o pi oi d pr es cri pti o ns, gi vi n g s al es r e pr es e nt ati ves t h e a bilit y t o e ar n b o n us es of t e ns of t h o us a n ds of d oll ars, a n d p ossi bl y m or e, d e p e n di n g o n t h e v ol u m e of pr es cri pti o ns t h e y c o ul d g e n er at e. I n 2 0 0 1, a n n u al b o n us es f or s al es r e pr es e nt ati v es a v er a g e d $ 7 1, 5 0 0 a n d r e a c h e d as hi g h as n e arl y $ 2 4 0, 0 0 0. 2 9 1. T o t a k e j ust o n e q u art er as a n e x a m pl e : i n t h e t hir d q u art er of 2 0 1 0, d et ail ers c o ul d r e c ei v e u p t o f o ur diff er e nt b o n us es b as e d o n o x y c o d o n e a n d R y z olt pr es cri pti o ns i n a si n gl e 81 88 of 258 INDEX NO. 400016/2018 FILED: SUFFOLK COUNTY CLERK 04/11/2019 11:19 AM NYSCEF DOC. NO. 19 RECEIVED NYSCEF: 04/11/2019 V ersi o n D at e d A pr. 1 0, 2 0 1 9 wit h C ert ai n R e d a cti o ns R e m o v e d P er P arti es' A gr e e m e nt 89 of 258 INDEX NO. 400016/2018 FILED: SUFFOLK COUNTY CLERK 04/11/2019 11:19 AM NYSCEF DOC. NO. 19 RECEIVED NYSCEF: 04/11/2019 V ersi o n D at e d A pr. 1 0, 2 0 1 9 wit h C ert ai n R e d a cti o ns R e m o v e d P er P arti es' A gr e e m e nt i. 2 9 6. P u r d u e ’s F als e a n d D e c e pti v e “ S u p e ri o rit y ” C l ai ms P ur d u e d e c e pti v el y hi g hli g ht e d t h e ris ks of hi g h d os es of a c et a mi n o p h e n a n d N S AI Ds b y m ar k eti n g t h at o pi oi ds, u nli k e t h os e m e di c ati o ns, h a v e “ n o c eili n g d os e ” a n d ar e t h us s af er p ai n m a n a g e m e nt o pti o ns. 2 9 7. Dir e ctl y a n d t hr o u g h its v ari o us Fr o nt Gr o u ps, P ur d u e pr o m ot e d t h e m ess a g e t h at N S AI Ds a n d T yl e n ol h a v e “lif e -t hr e at e ni n g ” si d e eff e cts, w hil e o pi oi ds ar e “t h e g ol d st a n d ar d of p ai n m e di c ati o ns. ” F or e x a m pl e, P ur d u e s p o ns or e d a n ati o n all y -a v ail a bl e C M E, e dit e d i n p art b y K O L Dr. R uss ell P ort e n o y, t h at d e c e pti v el y i nstr u ct e d p h ysi ci a ns t h at N S AI Ds a n d ot h er dr u gs, b ut n ot o pi oi ds, ar e u ns af e at hi g h d os es. 2 9 8. As l at e as 2 0 1 6, P ur d u e p erf or m e d m ar k et r es e ar c h o n h o w t o g et pr es cri b ers t o s wit c h p ati e nts fr o m N S AI Ds t o o pi oi ds, i d e ntif yi n g “ N S AI Ds [ as a] k e y o p p ort u nit y f or gr o wt h ” f or B utr a ns a n d s etti n g a d et aili n g g o al of h a vi n g 1 0 % of B utr a ns pr es cri pti o ns b e c o n v ersi o ns fr o m N S AI Ds. 2 9 9. E v e n w hil e it w as pr o m oti n g t h es e misr e pr es e nt ati o ns, P ur d u e k n e w its o pi oi ds w er e n ot s af er alt er n ati v es. A 2 0 1 1 P ur d u e s al es tr ai ni n g a c k n o wl e d g e d t h at t h e c o m p a n y “ c a n n ot r e pr es e nt or s u g g est ” t h at its dr u gs ar e “s af er ” or “ m or e eff e cti v e ” or m a k e “ a n y ot h er s ort of c o m p ar ati v e cl ai m . ” ii. 3 0 0. P u r d u e F als el y C l ai m e d O pi oi ds Im p r o v e d F u n cti o n a n d Q u alit y of L if e P ur d u e als o pr o m ot e d its o pi oi d pr o d u cts b y f als el y cl ai mi n g t h at t h e y i m pr o v e p ati e nts’ f u n cti o n a n d “ q u alit y of lif e. ” P ur d u e’s dir e ct m ar k eti n g m at eri als a n d s al es r e pr es e nt ati v es r e p e at e dl y cl ai m e d t h at o pi oi ds w o ul d h el p pati e nts r e g ai n f u n cti o n alit y a n d m a k e it e asi er f or t h e m t o c o n d u ct e v er y d a y t as ks li k e w al ki n g, w or ki n g, a n d e x er cisi n g. 83 90 of 258 INDEX NO. 400016/2018 FILED: SUFFOLK COUNTY CLERK 04/11/2019 11:19 AM NYSCEF DOC. NO. 19 3 0 1. RECEIVED NYSCEF: 04/11/2019 V ersi o n D at e d A pr. 1 0, 2 0 1 9 wit h C ert ai n R e d a cti o ns R e m o v e d P er P arti es' A gr e e m e nt F or e x a m pl e, c all n ot es fr o m 2 0 0 6 r efl e ct t h at s al es r e pr es e nt ati v es r e p e at e dl y us e d a P ur d u e -s p o ns or e d 2 0 0 0 arti cl e b y S a nf or d H. R o t h, M. D. t o pr o m ot e its o pi oi ds f or i m pr o v e d q u alit y of lif e, wit h c all n ot es s a yi n g : “ w e t al k e d a b o ut t h e b e n efits of l o n g a cti n g o pi oi ds f or q ol, ” “ w e dis c uss e d r ot h a n d h o w o x y c o nti n w as eff e cti v e o n i m pr o vi n g p ati e nts q ol, ” a n d “i m pr o v e q u alit y of lif e a n d r e h a bilit ati o n t a k es l ess ti m e wit h q 1 2 d ois n g [ si c]. Si mil arl y, a 2 0 0 8 c all n ot e r efl e cts t h e d et ail er’s f oll o w u p t o pi c wit h a pr o vi d er is t o “ c o nti n u e t o dis c uss w h er e o x c o nti n [si c] mi g ht b e m or e b e n efi ci al a n d h el p wit h a p ati e nts q ol o v er a n i m m e di at e r el e as e o pi oi d. ” 3 0 2. N ot o nl y w as t h er e n o e vi d e nti ar y b asis f or t h es e cl ai ms, as d es cri b e d a b o v e, b ut P ur d u e’s i nt er n al d o c u m e nts a d mit t h at “ P ur d u e h as n o cli ni c al st u di es or ot h er s u bst a nti al e vi d e n c e d e m o nstr ati n g t h at a P ur d u e Pr o d u ct will i m pr o v e t h e q u alit y of a p ers o n’s lif e. ” iii. 3 0 3. P u r d u e ’s D e c e pti v e C l ai m t h at O x y C o nti n P r o vi d e d T w el v e H o u rs of Pai n R e li ef Alt h o u g h O x y C o nti n is a p pr o v e d b y t h e F D A f or 1 2 h o ur d osi n g, P ur d u e k n e w t h at m a n y p ati e nts, a n d p ossi bl y m ost, di d n ot r e c ei v e a f ull 1 2 h o urs of c o nti n u o us p ai n r eli ef w h e n t a ki n g O x y C o nti n a n d t h at p ati e nts st art e d e x p eri e n ci n g n ot j ust p ai n, b ut als o wit h dr a w al s y m pt o ms, b ef or e t h e ti m e f or t h eir n e xt d os e. 3 0 4. N o n et h el ess, P ur d u e m a d e 1 2 -h o ur d osi n g o n e of its c or e m ar k eti n g m ess a g es, r o uti n el y pr o m oti n g t h at O x y C o nti n pr o vi d e d a f ull 1 2 h o urs of p ai n r eli ef. 3 0 5. T o s u p p ort its cl ai m t h at O x y C o nti n pr o vi d es p ati e nts wit h a “s m o ot h er ” 1 2 c o nti n u o us h o urs of p ai n r eli ef, u nli k e its c o m p etit ors t h at c a us e “ p e a ks ” of e u p h ori a a n d “tr o u g hs ” of i ns uffi ci e nt p ai n r eli ef, P ur d u e us e d “ P e a k a n d Tr o u g h ” gr a p hs: 84 91 of 258 INDEX NO. 400016/2018 FILED: SUFFOLK COUNTY CLERK 04/11/2019 11:19 AM NYSCEF DOC. NO. 19 3 0 6. RECEIVED NYSCEF: 04/11/2019 V ersi o n D at e d A pr. 1 0, 2 0 1 9 wit h C ert ai n R e d a cti o ns R e m o v e d P er P arti es' A gr e e m e nt I n f a ct, h o w e v er, e xt e n d e d-r el e as e o x y c o d o n e d o es n ot e nt er t h e b o d y o n a li n e ar r at e, as r efl e ct e d i n P ur d u e’s m ar k eti n g gr a p hs; r at h er, O x y C o nti n r el e as es a gr e at er pr o p orti o n of o x y c o d o n e i nt o t h e b o d y u p o n a d mi nistr ati o n, a n d t h e r el e as e gr a d u all y t a p ers. 3 0 7. P ur d u e’s o w n r es e ar c h o n O x y C o nti n f o u n d a r e c urr e n c e of p ost -s ur gi c al p ai n w ell b ef or e 1 2 h o urs, a n d m or e t h a n of t h e h alf of t h e st u d y p arti ci p a nts gi v e n O x y C o nti n r e- m e di c at e d b ef or e 1 2 h o urs. In 2 0 0 8, t h e F D A f o u n d t h at a “s u bst a nti al n u m b er ” of c hr o ni c p ai n p ati e nts t a ki n g O x y C o nti n e x p eri e n c e “ e n d - of-d os e f ail ur e ” wit h littl e or n o p ai n r eli ef at t h e e n d of t h e d osi n g p eri o d. 9 7 3 0 8. P ur d u e e x pr essl y t ol d t h e F D A t h at 1 2-h o ur d osi n g “r e pr es e nts a si g nifi c a nt c o m p etiti v e a d v a nt a g e of O x y C o nti n o v er ot h er pr o d u cts. ” i v. 3 0 9. P u r d u e C o n c e al e d t h e L i n k B et w e e n L o n g - Te r m U s e of O pi oi ds a n d A b us e a n d A d di cti o n O n e of P ur d u e’s k e y h ur dl es w h e n l a u n c hi n g O x y C o nt i n w as o v er c o mi n g t h e m e di c al c o m m u nit y’s e ntr e n c h e d vi e ws a b o ut o pi oi ds’ si g nifi c a nt ris k of a d di cti o n. L ett er fr o m J a n et W o o d c o c k, M D., Dir., Ctr. f or Dr u g E v al. a n d R es e ar c h, t o C o n n e cti c ut Att or n e y G e n er al Ri c h ar d Bl u m e nt h al 5 ( S e pt. 9, 2 0 0 8), a v ail a bl e at htt ps:// w w w.s cri b d. c o m/ d o c u m e nt/ 3 2 8 7 5 2 8 0 5/ Bl u m e nt h al -C p -W o o d c o c k . 97 85 92 of 258 INDEX NO. 400016/2018 FILED: SUFFOLK COUNTY CLERK 04/11/2019 11:19 AM NYSCEF DOC. NO. 19 3 1 0. RECEIVED NYSCEF: 04/11/2019 V ersi o n D at e d A pr. 1 0, 2 0 1 9 wit h C ert ai n R e d a cti o ns R e m o v e d P er P arti es' A gr e e m e nt R at h er t h a n tr ut hf ull y m ar k et its o pi oi d pr o d u c ts b as e d o n t h e k n o w n ris ks of a d di cti o n a n d a b us e, P ur d u e b e g a n i n u n d ati n g t h e m e di c al c o m m u nit y , b ot h dir e ctl y a n d t hr o u g h its K O Ls a n d Fr o nt Gr o u ps, wit h misl e a di n g i nf or m ati o n t o d e c e pti v el y c o n c e al t h e li n k b et w e e n l o n g-t er m o pi oi d us e a n d a d di cti o n. P ur d u e r e c o g ni z e d t h at p h ysi ci a ns w a nt e d “ p ai n r eli ef f or t h es e p ati e nts wit h o ut a d di cti n g t h e m t o a n o pi oi d, ” a n d p ositi o n e d its pr o d u cts a c c or di n gl y. 3 1 1. F or e x a m pl e, i n its 1 9 9 8 pr o m oti o n al vi d e o, I G ot M y Lif e B a c k, P ur d u e cl ai m e d t h e r at e of a d di cti o n “ is m u c h l ess t h a n 1 %. ” P ur d u e m ail e d t h o us a n ds of d o ct ors t his pr o m oti o n al vi d e o , w h er e a p h ysi ci a n ass erts: T h er e’s n o q u esti o n t h at o ur b est, str o n g est p ai n m e di ci n es ar e t h e o pi oi ds. B ut t h es e ar e t h e s a m e dr u gs t h at h a v e a r e p ut ati o n f or c a usi n g a d di cti o n a n d ot h er t erri bl e t hi n gs. N o w, i n f a ct, t h e r at e of a d di cti o n a m o n gst p ai n p ati e nts w h o ar e tr e at e d b y d o ct ors is m u c h l ess t h a n o n e p er c e nt. T h e y d o n’t w e ar o ut, t h e y g o o n w or ki n g, t h e y d o n ot h a v e s eri o us m e di c al si d e eff e cts. 3 1 2. P ur d u e e v e n tr ai n e d its s al es r e pr es e nt ati v es t o d e c ei v e d o ct ors t h at t h e ris k of a d di cti o n w as “l ess t h a n o n e p er c e nt. ” 3 1 3. E v e n w hil e pr o m oti n g t h es e misr e pr es e nt ati o ns, P ur d u e k n e w t h at p ati e nts w h o us e d o pi oi ds as pr es cri b e d w er e at ris k of d e v el o pi n g a n a d di cti o n. As e arl y as 1 9 9 6, P ur d u e’s l e a d ers hi p b e g a n r e c ei vi n g an e c d ot al r e p orts t h at t h e ti m e -r el e as e O x y C o nti n a n d m et h o ds. m e c h a nis m us e d i n b ot h M S C o nti n w as b ei n g s u b v ert e d e asil y b y cr us hi n g a n d ot h er str ai g htf or w ar d B y 1 9 9 8, P ur d u e k n e w of fi n di n gs r e p orte d i n a m e di c al j o ur n al c o n c er ni n g M S C o nti n a b us e a n d str e et v al u e — a 2, 0 5 9 p er c e nt m ar k u p. 3 1 4. B y 1 9 9 9, t h e c o m p a n y a n d its s al es st aff w er e r e c ei vi n g wi d es pr e a d r e p orts fr o m t h e fi el d t h at O x y C o nti n w as b ei n g wi d el y di v ert e d a n d a b us e d. P ur d u e its elf f u n d e d a st u d y i n 1 9 9 9 t h at f o u n d 1 3 % of p ati e nts w h o us e d O x y C o nti n t o tr e at h e a d a c h es d e v el o p e d “ a d di cti v e b e h a vi or. ” 86 93 of 258 INDEX NO. 400016/2018 FILED: SUFFOLK COUNTY CLERK 04/11/2019 11:19 AM NYSCEF DOC. NO. 19 3 1 5. RECEIVED NYSCEF: 04/11/2019 V ersi o n D at e d A pr. 1 0, 2 0 1 9 wit h C ert ai n R e d a cti o ns R e m o v e d P er P arti es' A gr e e m e nt A 1 9 9 9 i nt er n al e m ail t o a s e ni or e x e c uti v e a b o ut a b us e a n d di v ersi o n of M S C o nti n a n d O x y C o nti n r efl e cts P ur d u e’s f a mili arit y wit h t h e iss u es, w h er e a n e m pl o y e e dis p ut es a cl ai m t h at s o m e i n di vi d u als “s h o ot ” M S C o nti n aft er e xtr a cti n g t h e m or p hi n e, writi n g: W h at I ’v e h e ar d is t h at t h e c o ati n g is r e m o v e d, t h e n t h e t a bl ets ar e cr us h e d i nt o a p o w d er. N o “ e xtr a cti o n ” h er e. Th e us ers g e n er all y s n ort t h e p o w d er; i nj e cti o n is n ot t o o p o p ul ar b e c a us e t h e w a x y j u n k i n t h e t a bl ets c a n m ess u p t h e us er ’s v ei ns. At l e ast, t h at’s w h at I ’v e r e a d. Als o, I u n d erst a n d t h at O x y c o nti n is t h e pr ef err e d dr u g; or al m or p hi n e is n ot w h at it’s c r a c k e d u p t o b e, e v e n if s n ort e d . ( e m p h asis a d d e d) 3 1 6. Pr es cri b ers i n N e w Y or k als o r e p ort e d t h eir a b us e a n d di v ersi o n c o n c er ns t o P ur d u e’s d et ail ers. F or e x a m pl e, o n e d et ail er i n N e w Y or k wr ot e i n 2 0 0 8: “ S a ys pr a cti c e will n ot writ e n e w s cri pts f or O x y C o nt i n b c of a b us e a n d di v ersi o n iss u es. S a ys t h e y ar e c o n c er n e d s o m e p ati e nts ar e n ot t a ki n gs [ si c] pr es cri b e d m e ds of [si c] ar e t a ki n g t o o m u c h. ” A n ot h er s al es r e pr es e nt ati v e w as t ol d t h at a p ati e nt w as s e e n cr us hi n g a n d s n orti n g O x y C o nti n ri g ht aft er it w as pr es cri b e d, a n d w as e v e n s h ari n g it wit h fri e n ds i n t h e p h ysi ci a n’s p ar ki n g l ot. v. 3 1 7. P u r d u e M is r e p r es e nt e d t h e E xt e nt t o w hi c h A d di cti o n R is k C a n B e M a n a ge d T o d o w n pl a y c o n c er ns o v er a d di cti o n e v e n f urt h er, P ur d u e diss e mi n at e d Fr o nt Gr o u p- br a n d e d a d di cti o n m a n a g e m e nt “t o ols ” t h at P ur d u e cl ai m e d c o ul d b e us e d t o m a n a g e t h e ris k of a d di cti o n, d es pit e l a c ki n g e vi d e n c e t h e t o ols w er e at eff e cti v e f or a c hi e vi n g t h at g o al. 3 1 8. F or e x a m pl e, P ur d u e distri b ut e d A P F’s Tr e at m e nt O pti o ns g ui d e, w hi c h as n ot e d a b o v e, t o ut e d “ o pi oi d a gr e e m e nts. ” P ur d u e’s d et ail ers als o pr o vi d e d N e w Y or k pr es cri b ers a P art n ers A g ai nst P ai n “ P ai n M a n a g e m e nt Kit ” t h at c o nt ai n e d s e v er al “ dr u g a b us e s cr e e ni n g t o ols ,” i n cl u di n g t he “ O pi oi d Ris k T o ol. ” P ur d u e a cti v el y diss e mi n at e d t h es e m at eri als t o misl e a di n gl y gi v e pr o vi d ers a f als e s e ns e of s e c urit y t h at t h e y c o ul d s af el y st art a c o urs e of o pi oi ds wit h p ati e nts a n d eff e cti v el y m a n a g e t h os e wit h a hi g h ris k of a d di cti o n. 87 94 of 258 INDEX NO. 400016/2018 FILED: SUFFOLK COUNTY CLERK 04/11/2019 11:19 AM NYSCEF DOC. NO. 19 RECEIVED NYSCEF: 04/11/2019 V ersi o n D at e d A pr. 1 0, 2 0 1 9 wit h C ert ai n R e d a cti o ns R e m o v e d P er P arti es' A gr e e m e nt 95 of 258 INDEX NO. 400016/2018 FILED: SUFFOLK COUNTY CLERK 04/11/2019 11:19 AM NYSCEF DOC. NO. 19 RECEIVED NYSCEF: 04/11/2019 V ersi o n D at e d A pr. 1 0, 2 0 1 9 wit h C ert ai n R e d a cti o ns R e m o v e d P er P arti es' A gr e e m e nt 96 of 258 INDEX NO. 400016/2018 FILED: SUFFOLK COUNTY CLERK 04/11/2019 11:19 AM NYSCEF DOC. NO. 19 RECEIVED NYSCEF: 04/11/2019 V ersi o n D at e d A pr. 1 0, 2 0 1 9 wit h C ert ai n R e d a cti o ns R e m o v e d P er P arti es' A gr e e m e nt 97 of 258 INDEX NO. 400016/2018 FILED: SUFFOLK COUNTY CLERK 04/11/2019 11:19 AM NYSCEF DOC. NO. 19 RECEIVED NYSCEF: 04/11/2019 V ersi o n D at e d A pr. 1 0, 2 0 1 9 wit h C ert ai n R e d a cti o ns R e m o v e d P er P arti es' A gr e e m e nt 98 of 258 INDEX NO. 400016/2018 FILED: SUFFOLK COUNTY CLERK 04/11/2019 11:19 AM NYSCEF DOC. NO. 19 3 3 8. RECEIVED NYSCEF: 04/11/2019 V ersi o n D at e d A pr. 1 0, 2 0 1 9 wit h C ert ai n R e d a cti o ns R e m o v e d P er P arti es' A gr e e m e nt T hr o u g h t h es e c o m p a ni es, P ur d u e c o nti n u e d its d e c e pti v e m ar k eti n g, l ar g el y t hr o u g h m or e s urr e ptiti o us m e a ns, fr a u d ul e ntl y c o n c e ali n g its n o n-c o m pli a n c e a n d c o nti n u e d d e c e pti o n u ntil r e c e nt r e n e w e d s cr uti n y r e v e al e d its el a b or at e eff orts t o a v oi d d et e cti o n. 3 3 9. I n t h e p ast f e w y e ars, P ur d u e, oft e n t hr o u g h its Fr o nt Gr o u ps, c o nti n u e d t o misl e a d t h e p u bli c, i nfl u e n c e p u bli c p oli c y a n d p u bli c o pi ni o n, a n d r esist eff orts t o pl ac e r e as o n a bl e r estri cti o ns o n o pi oi d pr es cri pti o n a cti vit y t h at mi g ht h a v e r e d u c e d t h e s c al e of t h e crisis. 3 4 0. I n F e br u ar y 2 0 1 8, t h e S e n at e p u bli c ati o n F u eli n g a n E pi d e mi c r e v e al e d t h at P ur d u e h a d b e e n t h e si n gl e l ar g est f u n d er of or g a ni z ati o ns t h at s er v e d as Fr o nt Gr o u ps or t h at ot h er wis e a d v a n c e d P ur d u e’s i nt er ests, s p e n di n g o v er $ 4. 1 5 milli o n b et w e e n J a n u ar y 2 0 1 2 a n d M ar c h 2 0 1 7 o n t w el v e diff er e nt or g a ni z ati o ns t h at w er e e x a mi n e d b y t h e S e n at e c o m mitt e e. 9 8 I n d e e d, P ur d u e’s q u art erl y s p e n di n g n ot a bl y d e cr e as e d fr o m 2 0 0 0 t o 2 0 0 7, as P ur d u e c a m e u n d er i n v esti g ati o n b y t h e D e p art m e nt of J usti c e, b ut t h e n s pi k e d t o a b o v e $ 2 5 milli o n i n 2 0 1 1 (f or a t ot al of $ 1 1 0 milli o n t h at y e ar), a n d c o nti n u e d t o ris e t hr o u g h fis c al y e ar 2 0 1 5. 3 4 1. M u c h of t his f u n di n g w e nt t o or g a ni z ati o ns t h at, wit h P ur d u e’s k n o wl e d g e a n d i n m a n y c as es P ur d u e’s pri or a p pr o v al, mi ni mi z e d t h e ris k of a d di cti o n a n d m a d e ot h er misl e a di n g st at e m e nts s et f ort h h er ei n. M a n y of t h e p a y m e nts fr o m P ur d u e t o t h es e Fr o nt Gr o u ps w er e n ot a d e q u at el y dis cl os e d b y P ur d u e or b y t h e Fr o nt Gr o u ps t h e ms el v es. 3 4 2. P ur d u e h as w or k e d dir e ctl y a n d t hr o u g h its Fr o nt Gr o u ps, i n s o m e c as es s e cr etl y, t o d ef e at or d el a y m e as ur es ai m e d at miti g ati n g t h e s pir ali n g p u bli c h e alt h crisis, s u c h as m e as ur es t o cr e at e a c c o u nt a bilit y f or o v er pr es cri bi n g p h ysi ci a ns, a n d iss u a n c e of t h e C D C Gui d eli n e t h at c o ul d r es ult i n r e d u c e d pr es cri bi n g. 98 F u eli n g a n E pi d e mi c , s u pr a n ot e 8 4, at 4 -5. 92 99 of 258 INDEX NO. 400016/2018 FILED: SUFFOLK COUNTY CLERK 04/11/2019 11:19 AM NYSCEF DOC. NO. 19 3 4 3. RECEIVED NYSCEF: 04/11/2019 V ersi o n D at e d A pr. 1 0, 2 0 1 9 wit h C ert ai n R e d a cti o ns R e m o v e d P er P arti es' A gr e e m e nt As n ot e d a b o v e, P ur d u e is a k e y f or c e b e hi n d t h e P ai n C ar e F or u m, w hi c h h as att e m pt e d t o bl o c k eff orts b y N e w Y or k a n d ot h er st at es t o a d o pt c o m m o n -s e ns e m e as ur e s t o all e vi at e t h e o pi oi ds e pi d e mi c . T h e or g a ni z ati o n is l e d b y a P ur d u e l o b b yist w h o us es a P ur d u e c or p or at e e m ail a c c o u nt t o i nfl u e n c e f e d er al a n d st at e l e gisl ati o n a n d r e g ul at or y a cti viti es. 3 4 4. S al es r e pr es e nt ati v es als o t o ut e d t h e t a m p er- r esist a nt pr o p erti es of a r ef or m ul at e d v ersi o n of O x y C o nti n t h at b e g a n t o b e m ar k et e d i n 2 0 1 0, e v e n t h o u g h P ur d u e k n e w fr o m its s ur v eill a n c e of o nli n e f or u ms us e d b y dr u g a b us ers t h at “ a b us ers ar e a c c e pti n g t h e c h a n g e [i n f or m ul ati o n] a n d w or ki n g t o o ver c o m e t h e t a m p er -r esist a nt pr o p erti es of t h e n e w f or m ul ati o n of O x y C o nti n, ” a n d e v e n t h o u g h it w as a w ar e t h at or al i n g esti o n — f or w hi c h t a m p er r esist a n c e h a d n o eff e ct — w as t h e m ost fr e q u e nt m et h o d of a b us e. 3 4 5. M or e o v er, P ur d u e p ai d f or a n d pr o m ot e d arti cl es t h at st at e d or i m pli e d t h at its t a m p er-r esist a nt dr u gs w er e s af e, e v e n w hil e it w as a w ar e of t h e e as e wit h w hi c h t h e y c o ul d b e a b us e d t hr o u g h or al i n g esti o n a n d ot h er m e a ns. I n 2 0 1 4, f or e x a m pl e, P ur d u e pl a c e d t hr e e arti cl es i n T h e Atl a nti c m a g a zi n e as s p o ns or e d c o nt e nt, i n cl u di n g o n e arti cl e b y a p h ysi ci a n t h at misl e a di n gl y c all e d t h e t a m p er -r esist a nt f or m ul ati o ns (t h e m ost pr o mi n e nt of w hi c h w as m a d e b y P ur d u e) “ n e w er, s af er alt er n ati v es ” t h at w er e w ort h usi n g d es pit e t h eir “ hi g h er pri c e t a g, ” a n d e n c o ur a g e d n o n -e x p ert “ p h ysi ci a ns [t o] e m br a c e t h es e a d diti o n al c h oi c es, r at h er t h a n d e ci d e t o l e a v e o pi oi d pr es cri bi n g[.] ” R e p orts o bt ai n e d fr o m P ur d u e r efl e ct t h at t his pr o m oti o n al eff ort g e n er at e d o v er 8 8, 0 0 0 p a g e vi e ws o n T h e Atl a nti c ’s w e bsit e. 4. P u r d u e Fail e d t o P r e v e nt D i v e rsi o n of O x y C o nti n 3 4 6. I n 2 0 1 5, t h e O A G e nt er e d i nt o a n Ass ur a n c e of Dis c o nti n u a n c e ( “ A O D ”) wit h P ur d u e t h at n arr o wl y f o c us e d o n P ur d u e’s f ail ur e t o i d e ntif y i nst a n c es of p ossi bl e a b us e, di v ersi o n, or i n a p pr o pri at e pr es cri bi n g t hr o u g h d et aili n g visits. P ur d u e pl e d g e d t o str e n gt h e n its o v ersi g ht of 93 100 of 258 INDEX NO. 400016/2018 FILED: SUFFOLK COUNTY CLERK 04/11/2019 11:19 AM NYSCEF DOC. NO. 19 RECEIVED NYSCEF: 04/11/2019 V ersi o n D at e d A pr. 1 0, 2 0 1 9 wit h C ert ai n R e d a cti o ns R e m o v e d P er P arti es' A gr e e m e nt its s al es r e pr es e nt ati v es a n d b olst er its i d e ntifi c ati o n of a n d r es p o ns e t o si g ns of a b us e, di v ersi o n, or i n a p pr o pri at e pr es cri bi n g b y r e m o vi n g pr es cri b ers fr o m its s al es c all lists . 3 4 7. H o w e v er, P ur d u e c o nti n u e d t o a g gr essi v el y pr o m ot e its dr u gs wit h o ut a d e q u at e s af e g u ar ds a g ai nst a b us e a n d di v ersi o n . Up u ntil P ur d u e st o p p e d d et aili n g i n F e br u ar y 2 0 1 8, it t y pi c all y fl a g g e d a pr es cri b er as p ot e nti all y pr o bl e m ati c o nl y w h e n it l e ar n e d th at t h e pr es cri b er w as arr est e d or t h e s u bj e ct of a n a cti v e i n v esti g ati o n or dis ci pli n ar y pr o c e e di n g. P ur d u e d e cli n e d t o us e a v ail a bl e d at a s o ur c es t o m or e r o b ustl y t ar g et pr o bl e m ati c pr es cri b ers. 3 4 8. P ur d u e e v e n c o nti n u e d t o m a k e s al es c alls t o d o ct ors pr e v i o usl y dis ci pli n e d f or i n a p pr o pri at e pr es cri bi n g. 5. As t h e O w n e rs of P u r d u e, M e m b e rs of P u r d u e’s B o a r d a n d F o r m e r O ffi c e rs of t h e C o m p a n y, t h e S a c kl e r s h a d A ct u al K n o wl e d g e of, S a n cti o n e d , a n d P a rti ci p at e d i n P u r d u e’s D e c e pti v e, M isl e a di n g, a n d O t h e r wis e Ill e g al P r a cti c es 3 4 9. P ur d u e’s d eli b er at e a cti o ns t o misl e a d pr es cri b ers a n d t h e p u bli c a b o ut t h e ris ks a n d b e n efits of l o n g -t er m o pi oi d tr e at m e nt w er e or c h estr at e d b y t h e S a c kl ers fr o m t h e l a u n c h of O x y C o nti n t hr o u g h t h e pr es e nt . P ur d u e is n ot a p u bli cl y tr a d e d c o m p a n y , b ut r at h er a f a mil y b usi n ess: it is c o m pl et el y S a c kl er -o w n e d a n d S a c kl er -l ed. T h e S a c kl er s w er e dir e ctl y i n v ol v e d i n d e v el o pi n g a n d s a n cti o ni ng P ur d u e’s d e c e pti v e a n d ill e g al a cti viti es , a n d t h e y e a c h p arti ci p at e d i n its d e cisi o n s t o misl e a d N e w Y or k pr o vi d ers, p ati e nts, g o v er n m e nt a ut h oriti es, a n d i ns ur ers t o n or m ali z e o pi oi d pr es cri bi n g a n d g e n er at e a fi n a n ci al wi n df all f or t h e ms el v es. 3 5 0. T h e S a c kl er s c o ntr ol P ur d u e. E a c h of t h e m t o o k s e ats o n t h e b o ar d of P ur d u e P h ar m a I n c . a n d m a n y s er v e d as offi c ers of P ur d u e e ntiti es . T o g et h er, t h ey al w a ys c o ntr oll e d t h e dir e ct or at e t h at g a v e t h e m t ot al p o w er o v er P ur d u e a n d its offi c ers a n d ot h er e m pl o y e es, a n d t h e y fr e q u e ntl y e x er cis e d t h at p o w er i n p ers o n at P ur d u e h e a d q u art ers, s o m e w or ki n g t h er e o n a d ail y b asis . 94 101 of 258 FILED: SUFFOLK COUNTY CLERK 04/11/2019 11:19 AM NYSCEF DOC. NO. 19 INDEX NO. 400016/2018 RECEIVED NYSCEF: 04/11/2019 102 of 258 INDEX NO. 400016/2018 FILED: SUFFOLK COUNTY CLERK 04/11/2019 11:19 AM NYSCEF DOC. NO. 19 RECEIVED NYSCEF: 04/11/2019 V ersi o n D at e d A pr. 1 0, 2 0 1 9 wit h C ert ai n R e d a cti o ns R e m o v e d P er P arti es' A gr e e m e nt 103 of 258 INDEX NO. 400016/2018 FILED: SUFFOLK COUNTY CLERK 04/11/2019 11:19 AM NYSCEF DOC. NO. 19 RECEIVED NYSCEF: 04/11/2019 V ersi o n D at e d A pr. 1 0, 2 0 1 9 wit h C ert ai n R e d a cti o ns R e m o v e d P er P arti es' A gr e e m e nt 104 of 258 INDEX NO. 400016/2018 FILED: SUFFOLK COUNTY CLERK 04/11/2019 11:19 AM NYSCEF DOC. NO. 19 3 6 4. RECEIVED NYSCEF: 04/11/2019 V ersi o n D at e d A pr. 1 0, 2 0 1 9 wit h C ert ai n R e d a cti o ns R e m o v e d P er P arti es' A gr e e m e nt T h e S a c kl er s w h o w er e i n v ol v e d i n r u n ni n g t h e f a mil y b usi n ess k n e w si n c e at l e ast t h e s u m m er of 1 9 9 9 th at pr es cri pti o n o pi oi ds l e a d t o a d di cti o n, a n d s p e cifi c all y t h at O x y C o nti n c o ul d b e, a n d w as, a b us e d. I n s u m m er 1 9 9 9, a P ur d u e s al es r e pr es e nt ati v e wr o t e t o t h e p r esi d e nt of P ur d u e r e p orti n g wi d es pr e a d a b us e of O x y C o nti n. “ W e h a v e i n f a ct pi c k e d u p r ef er e n c es t o a b us e of o ur o pi oi d pr o d u cts o n t h e i nt er n et, ” P ur d u e P h ar m a’s g e n er al c o u ns el, H o w ar d R. U d ell, wr ot e i n e arl y 1 9 9 9 t o a n ot h er c o m p a n y offi ci al . 3 6 5. I n J a n u ar y 2 0 0 1, Ri c h ar d S a c kl er r e c ei v e d a n e m ail fr o m a P ur d u e s al es r e pr es e nt ati v e d es cri bi n g a c o m m u nit y m e eti n g at a l o c al hi g h s c h o ol t h at or g a ni z e d b y m ot h ers w h os e c hil dr e n o v er d os e d o n O x y C o nti n a n d di e d. T h e s al es r e p r es e nt ati v e wr ot e: “ St at e m e nts w er e m a d e t h at O x y C o nti n s al es w er e at t h e e x p e ns e of d e a d c hil dr e n a n d t h e o nl y diff er e n c e b et w e e n h er oi n a n d O x y C o nti n is t h at y o u c a n g et O x y C o nti n fr o m a d o ct or. ” 3 6 6. In F e br u ar y 2 0 0 1, a f e d er al pr os e c ut or r e p ort e d 5 9 d e at hs fr o m O x y C o nti n i n a si n gl e st at e. D ef e n d a nt Ri c h ar d S a c kl er wr ot e t o P ur d u e e x e c uti v es: “ T his is n ot t o o b a d. It c o ul d h a v e b e e n f ar w ors e. ” 3 6 7. I n 2 0 0 7, Ri c h ar d S a c kl er a p pli e d f or a p at e nt t o tr e at o pi oi d a d di cti o n. H e fi n all y r e c ei v e d it i n J a n u ar y 2 0 1 8 a n d assi g n e d it t o R h o d es, a diff er e nt c o m p a n y c o ntr oll e d b y t h e S a c kl er f a mil y, i nst e a d of P ur d u e. Ri c h ar d’s p at e nt a p pli c ati o n s a ys o pi oi ds ar e a d di cti v e. T h e a p pli c ati o n c alls t h e p e o pl e w h o b e c o m e a d di ct e d t o o pi oi ds “j u n ki es ” a n d as ks f or a m o n o p ol y o n a m et h o d of tr e ati n g a d di cti o n. 3 6 8. At n o p oi nt d uri n g t h e r el e v a nt ti m e p eri o d di d t h e S a c kl er s r e c ei v e i nf or m ati o n s h o wi n g t h at pr es cri pti o n o pi oi d a b us e h a d a b at e d. 3 6 9. I nst e a d, in 2 0 1 0, st aff g a v e t h e S a c kl ers t h e f oll o wi n g m a p , c orr el ati n g t h e l o c ati o n of d a n g er o us pr es cri b ers wit h r e p orts of o x y c o d o n e p ois o ni n gs, b ur gl ari es a n d r o b b eri es: 98 105 of 258 INDEX NO. 400016/2018 FILED: SUFFOLK COUNTY CLERK 04/11/2019 11:19 AM NYSCEF DOC. NO. 19 3 7 0. RECEIVED NYSCEF: 04/11/2019 V ersi o n D at e d A pr. 1 0, 2 0 1 9 wit h C ert ai n R e d a cti o ns R e m o v e d P er P arti es' A gr e e m e nt In M ar c h 2 0 1 3, st aff r e p ort e d t o t h e S a c kl ers o n t h e d e v ast ati o n c a us e d b y pr es cri pti o n o pi oi ds. St aff t ol d t h e S a c kl ers t h at dr u g o v er d os e d e at hs h a d m or e t h a n tri pl e d si n c e 1 9 9 0 — t h e p eri o d d uri n g w hi c h P ur d u e h a d m a d e O x y C o nti n t h e b est-s elli n g p ai n kill er. T h e y t ol d t h e S a c kl ers t h at t e ns of t h o us a n ds of d e at hs w er e o nl y t h e “ti p of t h e i c e b er g, ” a n d t h at, f or e v er y d e at h, t h er e w er e m or e t h a n a h u n dr e d p e o pl e s uff eri n g fr o m pr es cri pti o n o pi oi d d e p e n d e n c e or a b us e. 3 7 1. Just t w o m o nt hs l at er , at a M a y 2 0 1 3 b o ar d m e eti n g, st aff r e p ort e d t o t h e S a c kl ers th at t h e y w er e s u c c essf ull y p us hi n g o pi oi d s a vi n gs c ar ds t hr o u g h dir e ct m ail a n d e m ail t o g et p ati e nts t o “r e m ai n o n t h er a p y l o n g er. ” 99 106 of 258 INDEX NO. 400016/2018 FILED: SUFFOLK COUNTY CLERK 04/11/2019 11:19 AM NYSCEF DOC. NO. 19 RECEIVED NYSCEF: 04/11/2019 V ersi o n D at e d A pr. 1 0, 2 0 1 9 wit h C ert ai n R e d a cti o ns R e m o v e d P er P arti es' A gr e e m e nt i. 3 7 2. T h e S a c kl e r s I nt e nti o n all y Bl a m e d I n di vi d u als I nst e a d of Di r e cti n g P u r d u e t o A d d r ess T h e Ris k its O pi oi d P r o d u cts C r e at e d I n F e br u ar y 2 0 0 1, Ri c h ar d S a c kl er di c tat e d P ur d u e’s str at e g y f or r es p o n di n g t o t h e i n cr e asi n g e vi d e n c e of a b us e of pr es cri pti o n o pi oi ds a n d a d di cti o n t o P ur d u e’s o pi oi ds: bl a m e a n d sti g m ati z e t h eir o w n vi cti ms. Ri c h ar d S a c kl er wr ot e i n a n e m ail: “ w e h a v e t o h a m m er o n t h e a b us ers i n e v er y w a y p oss i bl e. T h e y ar e t h e c ul prits a n d t h e pr o bl e m. T h e y ar e r e c kl ess cri mi n als. ” Ri c h ar d o bj e ct e d t o “ cri mi n al a d di cts [] b ei n g gl orifi e d as s o m e s ort of p o p ulist vi cti m. ” 3 7 3. I n a n e m ail e x c h a n g e dis c ussi n g w h et h er p e o pl e d e p e n d e nt o n o pi oi ds “ w a nt t o b e a d di ct s ” Ri c h ar d wr ot e: “I’ll t ell y o u s o m et hi n g t h at will t ot all y r e vis e y o ur b eli ef t h at a d di cts d o n’t w a nt t o b e a d di ct e d. It is f a ct u all y u ntr u e. T h e y g et t h e ms el v es a d di ct e d o v er a n d o v er a g ai n. ” Ri c h ar d h a m m er e d it h o m e: “[ O pi oi d a d di cts] ar e cri mi n als, a n d t h e y e n g a g e i n it wit h f ull, cri mi n al i nt e nt. W h y s h o ul d t h e y b e e ntitl e d t o o ur s y m p at hi es ? ” H e f urt h er wr ot e: “ T his vilifi c ati o n is s hit. ” 3 7 4. T h e S a c kl er D ef e n d a nts e v e n e x pl or e d t h e p ossi bilit y of usi n g P E T s c a ns t o disti n g uis h “ p ati e nts ” fr o m “ a b u s ers, ” wit h J o n at h a n S a c kl er writi n g t o Ri c h ar d S a c kl er i n M a y 2 0 0 8 t h at h e “ w as t hi n ki n g a b o ut t h e diff er e n c es b et w e e n p ai n p ati e nts a n d dr u g a b us ers i n t h eir r e a cti o n t o o pi oi ds. ” J o n at h a n as k e d, “ H as a n y b o d y tri e d usi n g P E T t o e x pl or e t his ? ” D ef e n d a nt Ri c h ar d S a c kl er r e pli e d: “I t hi n k t h e i d e a of c o m p ari n g P E T s c a ns of a d di cts a n d p ai n p ati e nts is v er y i nt er esti n g. ” 3 7 5. W he n Ti m e m a g a zi n e p u blis h e d a n arti cl e a b o ut O x y C o nti n d e at hs i n N e w E n gl a n d, P ur d u e e m pl o y e es t ol d Ri c h ar d S a c kl er t h e y w er e c o n c er n e d. Ri c h ar d r es p o n d e d wit h a m ess a g e t o his st aff. H e wr ot e t h at Ti m e ’s c o v er a g e of p e o pl e w h o l ost t h eir li v es t o O x y C o nti n w as n ot “ b al a n c e d, ” a n d t h e d e at hs w er e t h e f a ult of “t h e dr u g a d di cts, ” i nst e a d of P ur d u e. 100 107 of 258 INDEX NO. 400016/2018 FILED: SUFFOLK COUNTY CLERK 04/11/2019 11:19 AM NYSCEF DOC. NO. 19 RECEIVED NYSCEF: 04/11/2019 V ersi o n D at e d A pr. 1 0, 2 0 1 9 wit h C ert ai n R e d a cti o ns R e m o v e d P er P arti es' A gr e e m e nt ii. 3 7 6. T h e S a c kl e r s’ E ff o rts D i r e cti n g P u r d u e t o D e v el o p, M a r k et , a n d S ell Ad di cti o n T r e at m e nts D e m o nst r at es t h ei r F ull K n o wl e d g e of t h e E xt e nt of O pi oi ds’ A d di cti v e Q u aliti es T h e S a c kl ers’ f ull u n d erst a n di n g of o pi oi ds’ a b us e a n d a d di cti o n ris k is u n d ers c or e d b y t h eir willi n g n ess t o r es e ar c h, q u a ntif y a n d ulti m at el y m o n eti z e o pi oi d a b us e a n d a d di cti o n b y p urs ui n g t h e d e v el o p m e nt of m e di c ati o ns t o tr e at t h e a d di cti o n t h eir o w n o pi oi ds c a us e d . 3 7 7. D ef e n d a nts K at h e S a c kl er, Ri c h ar d S a c kl er , a n d P ur d u e’s st aff d et er mi n e d t h at milli o ns of p e o pl e w h o b e c a m e a d di ct e d t o o pi oi ds w er e t h e S a c kl er F a mili es ’ n e xt b usi n ess o p p ort u nit y . A sli d e titl e d S u bst a n c e A b us e, D e p e n d e n c e a n d A d di cti o n tr e at m e nt is a g o o d fit a n d n e xt n at ur al st e p f or P ur d u e st at es: “It is a n attr a cti v e m ar k et. L ar g e u n m et n e e d f or v ul n er a bl e, u n d ers er v e d a n d sti g m ati z e d p ati e nt p o p ul ati o n s uff eri n g fr o m s u bst a n c e a b us e, d e p e n d e n c e a n d a d di cti o n. ” 3 7 8. I n S e pt e m b er 2 0 1 4, K at h e S a c kl er p arti ci p at e d i n a c all a b o ut Pr oj e ct T a n g o — a pl a n f or P ur d u e t o e x p a n d i nt o t h e b usi n ess of s elli n g dr u gs t o tr e at o pi oi d a d di cti o n. I n t h eir i nt er n al d o c u m e nts, d ef e n d a nt K at h e S a c kl er a n d st aff m e m ori ali z e d w h at P ur d u e p u bli cl y d e ni e d f or d e c a d es: “ P ai n tr e at m e nt a n d a d di cti o n ar e n at ur all y li n k e d. ” T h e y ill ustr at e d t his p oi nt, a n d t h e b usi n ess o p p ort u nit y it pres e nt e d, wit h a f u n n el b e gi n ni n g wit h p ai n tr e at m e nt a n d l e a di n g t o o pi oi d a d di cti o n tr e at m e nt: 101 108 of 258 INDEX NO. 400016/2018 FILED: SUFFOLK COUNTY CLERK 04/11/2019 11:19 AM NYSCEF DOC. NO. 19 3 7 9. RECEIVED NYSCEF: 04/11/2019 V ersi o n D at e d A pr. 1 0, 2 0 1 9 wit h C ert ai n R e d a cti o ns R e m o v e d P er P arti es' A gr e e m e nt T h e s a m e pr es e nt ati o n als o pr o vi d e d: “[ O pi oi d a d di cti o n] c a n h a p p e n t o a n y - o n e — fr o m a 5 0 y e ar ol d w o m a n wit h c hr o ni c l o w er b a c k p ai n t o a 1 8 y e ar ol d b o y wit h a s p orts i nj ur y, fr o m t h e v er y w e alt h y t o t h e v er y p o or. ” 3 8 0. D ef e n d a nt K at h e S a c kl er a n d P ur d u e’s Pr oj e ct T a n g o t e a m r e vi e w e d fi n di n gs t h at t h e “ m ar k et ” of p e o pl e a d di ct e d t o o pi oi ds h a d d o u bl e d fr o m 2 0 0 9 t o 2 0 1 4. K at h e a n d t h e st aff f o u n d t h at t h e n ati o nal c at astr o p h e t h e y c a us e d pr o vi d e d a n e x c ell e nt c o m p o u n d a n n u al gr o wt h r at e ( “ C A G R ”): “ O pi oi d a d di cti o n ( ot h er t h a n h er oi n) h as gr o w n b y ~ 2 0 % C A G R fr o m 2 0 0 0 t o 2 0 1 0. ” 3 8 1. D ef e n d a nt K at h e S a c kl er or d er e d st aff’s “i m m e di at e att e nti o n, v erifi c ati o n, a n d ass ess m e nt ” of r e p orts of c hil dr e n r e q uiri n g h os pit ali z ati o n aft er s w all o wi n g b u pr e n or p hi n e as a fil m t h at m elts i n y o ur m o ut h, a n d st aff ass ur e d K at h e t h at c hil dr e n w er e o v er d osi n g o n pills li k e O x y C o nti n , n ot fil ms, “ w hi c h is a p ositi v e f or T a n g o . ” 3 8 2. I n F e br u ar y 2 0 1 5, st aff pr es e nt e d K at h e S a c kl er’s w or k o n Pr oj e ct T a n g o t o P ur d u e’s bo ar d. T h e pl a n w as f or a j oi nt ve nt ur e c o ntr oll e d b y t h e S a c kl ers t o s ell t h e a d di cti o n m e di c ati o n s u b o x o n e a n d w o ul d r es ult i n t h e S a c kl ers’ a c q uisiti o n of t h e “ m ar k et l e a d [] i n t h e a d di cti o n m e di ci n e s p a c e .” 102 109 of 258 FILED: SUFFOLK COUNTY CLERK 04/11/2019 11:19 AM NYSCEF DOC. NO. 19 INDEX NO. 400016/2018 RECEIVED NYSCEF: 04/11/2019 110 of 258 INDEX NO. 400016/2018 FILED: SUFFOLK COUNTY CLERK 04/11/2019 11:19 AM NYSCEF DOC. NO. 19 RECEIVED NYSCEF: 04/11/2019 V ersi o n D at e d A pr. 1 0, 2 0 1 9 wit h C ert ai n R e d a cti o ns R e m o v e d P er P arti es' A gr e e m e nt 111 of 258 INDEX NO. 400016/2018 FILED: SUFFOLK COUNTY CLERK 04/11/2019 11:19 AM NYSCEF DOC. NO. 19 RECEIVED NYSCEF: 04/11/2019 V ersi o n D at e d A pr. 1 0, 2 0 1 9 wit h C ert ai n R e d a cti o ns R e m o v e d P er P arti es' A gr e e m e nt visits s al es r e pr es e nt ati v es a v er a g e d p er w or k d a y; h o w m u c h e a c h visit c ost P ur d u e . T h ey k n e w t h e c o m p a n y’s pl a n f or s al es visits i n e a c h u p c o mi n g q u art er a n d a p pr o v e d s p e cifi c pl a ns t o hir e n e w s al es r e pr es e nt ati v es, hir e a n d pr o m ot e n e w Distri ct a n d R e gi o n al m a n a g ers, a n d cr e at e s al es “t errit ori es ” i n w hi c h r e pr es e nt ati v es w o ul d t ar g et d o ct ors . T h e S a c kl er s k n e w h o w m a n y visits s al es r e pr es e nt ati v es a v er a g e d p er w or k d a y a n d r e q uir e d t h eir s al es r e pr es e nt ati v es t o a v er a g e 7. 5 pr es cri b ers p er d a y. As wit h t h e d ail y visits p er r e pr es e nt ati v e, t h e S a c kl ers tr a c k e d t h e t ot al n u m b er of s al es visits p er q u art er u ntil at l e ast 2 0 1 4. 3 9 0. T h e S a c kl er s m a d e k e y d e cisi o ns r el ati n g t o P ur d u e’s s al es r e pr es e nt ati v es. F or e x a m pl e, t h e y c o nsi d er e d a n d a p pr o v e d hiri n g m or e s al es r e pr es e nt ati v es. T h e y d e ci d e d t o a p pr o v e s al es r e pr es e nt ati v es’ c o m p e ns ati o n, a n d t h e y e v e n v ot e d t o gift s al es r e pr es e nt ati v es l a pt o ps. 3 9 1. T h e S a c kl er s o v ers a w t h e t a cti cs t h at s al es r e pr es e nt ati v es us e d t o p us h t h eir o pi oi ds. F or e x a m pl e, a P ur d u e b o ar d r e p ort a n al y z e d a P ur d u e i niti ati v e t o us e i P a ds d uri n g s al es visits, w hi c h i n cr e as e d t h e a v er a g e l e n gt h of t h e s al es m e eti n g wit h t h e d o ct or t o “ 1 6. 7 mi n ut es i n fr o nt of t h e c ust o m er. ” 3 9 2. T h e S a c kl er s e v e n m o nit or e d s al es r e pr es e nt ati v es’ e m ails. P ur d u e h el d t h o us a n ds of f a c e -t o-fa c e s al es m e eti n gs wit h d o ct ors, b ut t h e c o m p a n y pr o hi bit e d its s al es r e pr es e nt ati v es fr o m writi n g e m ails t o d o ct ors, w hi c h c o ul d cr e at e e vi d e n c e of P ur d u e’s mis c o n d u ct. W h e n P ur d u e f o u n d t h at s o m e s al es r e pr es e nt ati v es h a d e m ail e d d o ct ors, t h e c o m p a n y c on d u ct e d a n “i n v esti g ati o n ” a n d r e p ort e d t o t h e b o ar d t h at s al es r e pr es e nt ati v es h a d b e e n dis ci pli n e d a n d t h at t h eir e m ails w o ul d b e dis c uss e d at t h e b o ar d m e eti n g. 3 9 3. E v e n aft er P ur d u e’s 2 0 0 7 g uilt y pl e a a n d t h e C or p or at e I nt e grit y A gr e e m e nt bi n di n g P ur d u e’s dir e ct ors, t h e S a c kl ers m ai nt ai n e d t h eir c o ntr ol o v er P ur d u e’s d e c e pti v e s al es c a m p ai g n. Ri c h ar d S a c kl er e v e n w e nt i nt o t h e fi el d t o s u p er vis e r e pr es e nt ati v es f a c e t o f a c e. 105 112 of 258 INDEX NO. 400016/2018 FILED: SUFFOLK COUNTY CLERK 04/11/2019 11:19 AM NYSCEF DOC. NO. 19 3 9 4. RECEIVED NYSCEF: 04/11/2019 V ersi o n D at e d A pr. 1 0, 2 0 1 9 wit h C ert ai n R e d a cti o ns R e m o v e d P er P arti es' A gr e e m e nt T h e S a c kl er s dir e ct e d P ur d u e t o hir e h u n dr e ds of s al es r e pr es e nt ati v es t o c arr y o ut t h eir d e c e pti v e s al es c a m p ai g n s u bs e q u e nt t o t h e 2 0 0 7 g uilt y pl e a. C o m pl yi n g wit h t h os e or d ers, P ur d u e st aff r e p ort e d t o t h e S a c kl ers i n J a n u ar y 2 0 1 1 t h at a k e y i niti ati v e i n Q 4 2 0 1 0 h a d b e e n t h e e x p a nsi o n of t h e s al es f or c e. B ut i n 2 0 1 2, Ri c h ar d S a c kl er c o m pl ai n e d t h at P ur d u e’s m a n a g e m e nt w as n ot s uffi ci e ntl y f o c us e d o n “ ur g e nt c urr e nt t hr e ats a n d o ur s al es d e cli n e[.] ” 3 9 5. I n N o v e m b er 2 0 1 2, t h e S a c kl ers v ot e d t o s et P ur d u e’s b u d g et f or S al es a n d Pr o m oti o n f or 2 0 1 3 at $ 3 1 2, 5 6 3, 0 0 0. 3 9 6. F ur t h er d e m o nstr ati n g h o w i nti m at el y i n v ol v e d t h e S a c kl er D ef e n d a nts w er e i n d e cisi o ns c o n c er ni n g t h e s al es f or c e: i n F e br u ar y 2 0 1 2, d uri n g a l e n gt h y e x c h a n g e b et w e e n s o m e S a c kl er i n di vi d u al D ef e n d a nts a n d P ur d u e’s offi c ers, D ef e n d a nt M orti m er S a c kl er s u g g est e d t h at P ur d u e r es c h e d ul e its J a n u ar y a n n u al s al es m e eti n g t o F e br u ar y s o t h at s al es r e pr es e nt ati v es “ g et b a c k t o w or k f or J a n u ar y a n d b a c k i n fr o nt of d o ct ors w h o e nt er t h e n e w y e ar r efr es h e d … ” . M orti m er als o s u g g est e d t h at r e pr es e nt ati v es t a k e “t hr e e f ull w e e ks ” t o “ visit all t h eir d o ct ors w h il e t h e y ar e still fr es h fr o m t h e wi nt er br e a k. ” M orti m er p os e d t h es e q u esti o ns d es pit e P ur d u e’s r o b ust s al es d uri n g t h at ti m e p eri o d. I n r es p o ns e t o t his e x c h a n g e d ef e n d a nt Ri c h ar d S a c kl er s u g g est e d t h e a n n u al m e eti n g b e c a n c el e d alt o g et h er. 3 9 7. I n O ct o b er 2 0 1 3, M orti m er S a c kl er pr ess e d f or m or e i nf or m ati o n o n d osi n g a n d “t h e br e a k d o w n of O x y C o nti n m ar k et s h ar e b y str e n gt h. ” St aff t ol d t h e S a c kl ers t h at “t h e hi g h d os e pr es cri pti o ns ar e d e cli ni n g, ” a n d “t h er e ar e f e w er p ati e nts titr ati n g t o t h e hi g h er str e n gt hs fr o m t h e l o w er o n es. ” I n r es p o ns e t o t h e S a c kl ers’ q u esti o ns, st aff e x pl ai n e d t h at s al es of t h e hi g h est d os es w er e n ot k e e pi n g u p wit h t h e S a c kl ers’ e x p e ct ati o ns b e c a us e s o m e p h ar m a ci es h a d i m pl e m e nt e d “ g o o d f ait h dis p e nsi n g ” p oli ci es t o d o u bl e-c h e c k pr es cri pti o ns t h at l o o k e d ill e g al a n d s o m e pr es cri b ers w er e u n d er pr ess ur e fr o m t h e Dr u g E nf or c e m e nt A d mi nistr ati o n ( “ D E A ”) . 106 113 of 258 St aff INDEX NO. 400016/2018 FILED: SUFFOLK COUNTY CLERK 04/11/2019 11:19 AM NYSCEF DOC. NO. 19 RECEIVED NYSCEF: 04/11/2019 V ersi o n D at e d A pr. 1 0, 2 0 1 9 wit h C ert ai n R e d a cti o ns R e m o v e d P er P arti es' A gr e e m e nt 114 of 258 INDEX NO. 400016/2018 FILED: SUFFOLK COUNTY CLERK 04/11/2019 11:19 AM NYSCEF DOC. NO. 19 RECEIVED NYSCEF: 04/11/2019 V ersi o n D at e d A pr. 1 0, 2 0 1 9 wit h C ert ai n R e d a cti o ns R e m o v e d P er P arti es' A gr e e m e nt 115 of 258 INDEX NO. 400016/2018 FILED: SUFFOLK COUNTY CLERK 04/11/2019 11:19 AM NYSCEF DOC. NO. 19 RECEIVED NYSCEF: 04/11/2019 V ersi o n D at e d A pr. 1 0, 2 0 1 9 wit h C ert ai n R e d a cti o ns R e m o v e d P er P arti es' A gr e e m e nt b y P et er B o er as “ g e n er ati n g l ot’s [ si c] of g o o d i n v est m e nt i d e as f or f a mil y c as h. ” P et er B o er w as n o str a n g er t o P ur d u e or t h e S a c kl ers w h e n h e j oi n e d P ur d u e’s B o ar d. H e h a d b e e n s er vi n g o n t h e b o ar d of t h e S a c kl ers’ R h o d e Isl a n d -b as e d o pi oi d m a n uf a ct uri n g c o m p a n y, R h o d es T e c h n ol o gi es, dir e cti n g P ur d u e’s o x y c o d o n e pi p eli n e t h er e f or a d e c a d e. 4 0 7. T h e S a c kl er s h a d f ull k n o wl e d g e of P ur d u e’s r el ati o ns hi p wit h R h o d es a n d P ur d u e’s eff orts t o e x p a n d a n d pr o d u c e m or e o x y c o d o n e c o nt e m p or a n e o us t o t h eir f el o n y c o n vi cti o ns. 4 0 8. P ur d u e a n d t h e S a c kl er s o v ers a w a n d a p pr o v e d all R h o d es -r el at e d a cti vit y. T h e S a c kl er s r e c ei v e d t h e a g e n d as f or R h o d es P h ar m a a n d R h o d es T e c h b o ar d of dir e ct ors’ m e eti n gs i n a d diti o n t o R h o d es’ fi n a n ci al st at e m e nts a n d fi n a n ci al r es ults . S o m e of t h e i n di vi d u al S a c kl er D ef e n d a nts s er v e d o n R h o d es’ c o m mitt e es. F or e x a m pl e, i n 2 0 1 5, T h er es a S a c kl er ( C h air p ers o n), K at h e S a c kl er , a n d J o n at h a n S a c kl er s er v e d o n R h o d es’ G o v er n a n c e c o m mitt e e. A n d i n 2 0 1 7, R h o d es’ B usi n ess D e v el o p m e nt C o m mitt e e i n cl u d e d i n di vi d u al S a c kl er D ef e n d a nts K at h e S a c kl er , J o n at h a n S a c kl er , M orti m er S a c kl er , a n d D a vi d S a c kl er . I n 2 0 1 8, d ef e n d a nt Ri c h ar d S a c kl er w as list e d o n R h o des’ p at e nt f or a dr u g t o tr e at o pi oi d a d di cti o n a n d f urt h er pr ofit fr o m t h e o pi oi d crisis t h e S a c kl er F a mili es cr e at e d. R h o d es r eli e d o n P ur d u e f or c o m pli a n c e; f or e x a m pl e, i n 2 0 1 8, R h o d es’ C o m pli a n c e C o m mitt e e dis c uss e d t h e s us pi ci o us or d eri n g s yst e m a n d st atisti cs f or 2 0 1 8 as pr o vi d e d b y P ur d u e. R h o d es als o m a d e distri b uti o ns t o d ef e n d a nts R os e b a y M e di c al L. P. a n d t h e B e a c o n C o m p a n y i n t h e milli o ns, f or t h e b e n efit of t h e S a c kl er Fa mili es. 4 0 9. A c c or di n g t o t h e Fi n a n ci al Ti m es , i n 2 0 1 6, R h o d es h a d a s u bsta nti all y l ar g er s h ar e of pr es cri pti o ns i n t h e U. S. pr es cri pti o n o pi oi d m ar k et t h a n P ur d u e. 9 9 P ur d u e h as oft e n ar g u e d t h at D a vi d Cr o w, H o w P ur d u e’s ‘ O n e -T w o’ P u n c h F u el e d t h e M ar k et f or O pi oi ds , Fi n a n ci al Ti m es, S e pt. 9, 2 0 1 8, a v ail a bl e at htt ps:// w w w.ft. c o m/ c o nt e nt/ 8 e 6 4 e c 9 c -b 1 3 3 -1 1 e 8 -8 d 1 4 -6f 0 4 9 d 0 6 4 3 9 c . 99 109 116 of 258 INDEX NO. 400016/2018 FILED: SUFFOLK COUNTY CLERK 04/11/2019 11:19 AM NYSCEF DOC. NO. 19 RECEIVED NYSCEF: 04/11/2019 V ersi o n D at e d A pr. 1 0, 2 0 1 9 wit h C ert ai n R e d a cti o ns R e m o v e d P er P arti es' A gr e e m e nt 117 of 258 INDEX NO. 400016/2018 FILED: SUFFOLK COUNTY CLERK 04/11/2019 11:19 AM NYSCEF DOC. NO. 19 RECEIVED NYSCEF: 04/11/2019 V ersi o n D at e d A pr. 1 0, 2 0 1 9 wit h C ert ai n R e d a cti o ns R e m o v e d P er P arti es' A gr e e m e nt 4 1 4. P ur d u e lat er a gr e e d t o p a y K e nt u c k y $ 2 4 milli o n o v er t h e c o urs e of ei g ht y e ars i n a s ettl e m e nt a n n o u n c e d i n l at e 2 0 1 5. 4 1 5. T h e K e nt u c k y Att or n e y G e n er al’s l a ws uit w as dis c uss e d b y P ur d u e’s s al es st aff w h o e x c h a n g e d n e ws r e p orts of a l a ws uit a c c usi n g P ur d u e of d e c e pti v e m ar k eti n g i n K e nt u c k y. T h e r e p ort q u ot e d P ur d u e’s o w n att or n e y a n d c hi ef fi n a n ci al o ffi c er st ati n g t h at t h e c o m p a n y f a c e d cl ai ms of m or e t h a n a billi o n d oll ars t h at “ w o ul d h a v e a cri p pli n g eff e ct o n P ur d u e’s o p er ati o ns a n d j e o p ar di z e P ur d u e’s l o n g-t er m vi a bilit y. ” T h e s a m e n e ws r e p orts r e g ar di n g t h e 2 0 1 5 K e nt u c k y s ettl e m e nt, dis p osi n g of K e nt u c k y’s 2 0 0 7 s uit, n ot e d t h at si mil ar liti g ati o n “ a g ai nst P ur d u e a n d ot h er o pi oi d m a k ers ” w o ul d s u bj e ct P ur d u e t o t h e “ billi o ns ” f a c e d b y “ Bi g T o b a c c o i n t h e 1 9 9 0s. ” 4 1 6. In M a y 2 0 1 9, P ur d u e w as s c h e d ul e d t o f a c e tri al i n O kl a h o m a i n a n a cti o n c o m m e n c e d b y O kl a h o m a’s Att or n e y G e n er al. I n O ct o b er 2 0 1 9, P ur d u e will f a c e tri al i n f e d er al c o urt i n Cl e v el a n d, O hi o i n t h e N ati o n al Pr es cri pti o n O pi at e Liti g ati o n , w hi c h i n cl u d es 1, 5 0 0 c o u nti es, a n d m u ni ci p aliti es, h os pit als , a n d ot h ers. T o d at e, tri al d at es h a v e b e e n s et i n at l e ast s e v e n st at es a g ai nst P ur d u e i n cl u di n g C alif or ni a, W as hi n gt o n, S o ut h C ar oli n a, N e w J ers e y, Al as k a , a n d Miss o uri. T h es e c as es , c o m m e n c e d b y st at e att or ne ys g e n er al i n 2 0 1 7 a n d 2 0 1 8, r e pr es e nt t h e c ul mi n ati o n of i n v esti g ati o ns st art e d y e ars e arli er d uri n g t h e s e c o n d w a v e of liti g ati o n a g ai nst P ur d u e b e gi n ni n g i n 2 0 1 4. 4 1 7. I n e arl y M ar c h 2 0 1 9, P ur d u e b e g a n a w ell -t h o u g ht o ut a n d d eli b er at e m e di a c a m p ai g n t o i nti mi d at e t h e liti g ati n g st at es, i n cl u di n g N e w Y or k, b y t hr e at e ni n g t o c o m m e n c e b a n kr u pt c y pr o c e e di n gs. “ As a pri v at el y -h el d c o m p a n y, it h as b e e n P ur d u e P h ar m a’s l o n gst a n di n g 111 118 of 258 INDEX NO. 400016/2018 FILED: SUFFOLK COUNTY CLERK 04/11/2019 11:19 AM NYSCEF DOC. NO. 19 RECEIVED NYSCEF: 04/11/2019 V ersi o n D at e d A pr. 1 0, 2 0 1 9 wit h C ert ai n R e d a cti o ns R e m o v e d P er P arti es' A gr e e m e nt p oli c y n ot t o c o m m e nt o n o ur fi n a n ci al or l e g al str at e g y, ” 1 0 1 P ur d u e s ai d i n a st at e m e nt , b ut l ess t h a n t e n d a ys l at er P ur d u e’s p r esi d e nt a n d C E O Cr ai g L a n d a u s p o k e wit h T h e W as hi n gt o n P ost t o d o u bl e- d o w n o n t h e P ur d u e’s t hr e at t o d el a y s c h e d ul e d tri als, fr ustr at e o n g oi n g dis c o v er y wit h N e w Y or k St at e , a n d ulti m at el y d el a y a n d ot h er wis e li mit st at es’ r e c o v er y a g ai nst P ur d u e. 4 1 8. On M ar c h 1 3, 2 0 1 9, P ur d u e’s Mr. L a n d a u, “ d e cli n e d t o dis c uss t h e p e n di n g [ o pi oi ds] liti g ati o n ” b ut, i n t h e s a m e i nt er vi e w wit h T h e W as hi n gt o n P ost , a n n o u n c e d t h at b a n kr u pt c y w a s s o m et hi n g t h e c o m p a n y w as w ei g hi n g as it c o nsi d ers t h e i m p a ct of p ot e nti al l e g al s ettl e m e nts or j ur y v er di cts t h at c o ul d c ost t e ns of billi o ns of d oll ars. “It is a n o pti o n, ” L a n d a u s ai d. “ W e ar e c o nsi d eri n g it, b ut w e’ v e r e all y m a d e n o d e cisi o ns o n w h at c o urs e of a cti o ns t o p urs u e. A l ot d e p e n ds o n w h at u nf ol ds i n t h e w e e ks a n d m o nt hs a h e a d. ” 1 0 2 4 1 9. D es pit e k n o wi n g t h at P ur d u e f a c es c ert ai n li a biliti es t o t h e st at es, i n cl u di n g N e w Y or k St at e, P ur d u e — at t h e S a c kl er D ef e n d a nts ’ dir e cti o n— c o nti n u e d t o p a y t h e S a c kl er F a mili es h u n dr e ds of milli o ns of d oll ars e a c h y e ar i n distri b uti o ns d uri n g t h e r el e v a nt ti m e p eri o d f or n o c o nsi d er ati o n a n d i n b a d f ait h. As a r es ult of D ef e n d a nts’ u nl a wf ul distri b uti o ns t o t h e S a c kl er F a mili es, ass ets ar e n o l o n g er a v ail a bl e t o s atisf y P ur d u e’s f ut ur e cr e dit or, t h e St at e of N e w Y or k. 4 2 0. A c c or di n g t o p u bli cl y a v ail a bl e i nf or m ati o n, a n n u al r e v e n u e at P ur d u e a v er a g e d a b o ut $ 3 billi o n, m ostl y d u e t o O x y C o nti n s al es, a n d P ur d u e h a d m a d e m or e t h a n $ 3 5 bil li o n si n c e r el e asi n g O x y C o nti n i n 1 9 9 5. 1 0 3 A c c or di n g t o p u bli cl y a v ail a bl e i nf or m ati o n, P ur d u e, at t h e Mi k e S p e ct or e t al., O x y C o nti n m a k er P ur d u e P h ar m a e x pl ori n g b a n kr u pt c y , R e ut ers, M ar. 4, 2 0 1 9, a v ail a bl e at htt ps:// w w w.r e ut ers. c o m/ arti cl e/ u k -p ur d u e p h ar m a -b a n kr u pt c y -e x cl usi v e/ e x cl usi v e -o x y c o nti n -m a k er -p ur d u e p h ar m a -e x pl ori n g -b a n kr u pt c y -s o ur c es-i d U S K C N 1 Q L 1 K P 102 K ati e Z e zi m a, P ur d u e P h ar m a C E O s a ys b a n kr u pt c y is ‘ a n o pti o n’ as c o m p a n y f a c es o pi oi d l a ws uits, W as h. P ost, M ar. 1 3, 2 0 1 9, a v ail a bl e at htt ps:// w w w. w as hi n gt o n p ost. c o m/ n ati o n al/ p ur d u e -p h ar m a -c e o -s a ys-b a n kr u pt c y -is-a n o pti o n -as -c o m p a n y -f a c es-o pi oi d -l a ws uits/ 2 0 1 9/ 0 3/ 1 2/ 6f 7 9 4 e 1 a-4 5 0 b -1 1 e 9 -9 0f 0 0 c cf e e c 8 7 a 6 1 _st or y ht ml ? ut m _t er m =. 4 c 0f 9 e 3 7 2 8 9 a . 103 Ell a Nils e n, A G l o c k e d i n pr ol o n g e d b attl e wit h d r u g c o m p a ni es , C o n c or d M o nit or, J ul y 1 4, 2 0 1 6, a v ail a bl e at htt ps:// w w w. c o n c or d m o nit or. c o m/ N H -att or n e y -g e n er al -b attl e -wit h -dr u g -c o m p a ni es -3 4 2 4 0 2 1 . 101 112 119 of 258 INDEX NO. 400016/2018 FILED: SUFFOLK COUNTY CLERK 04/11/2019 11:19 AM NYSCEF DOC. NO. 19 RECEIVED NYSCEF: 04/11/2019 V ersi o n D at e d A pr. 1 0, 2 0 1 9 wit h C ert ai n R e d a cti o ns R e m o v e d P er P arti es' A gr e e m e nt dir e cti o n of t h e S a c kl er -c o ntr oll e d b o ar d, p ai d t h e S a c kl er F a mili es $ 4 billi o n i n pr ofits st e m mi n g fr o m t h e s al e of P ur d u e’s o pi oi ds. I n J u n e 2 0 1 0, P ur du e’s st aff g a v e t h e S a c kl er s a n u p d at e d 1 0 y e ar pl a n f or gr o wi n g P ur d u e’s o pi oi d s al es i n w hi c h t h e S a c kl er s st o o d t o r e c ei v e at l e ast $ 7 0 0 milli o n e a c h y e ar fr o m 2 0 1 0 t hr o u g h 2 0 2 0. I n D e c e m b er 2 0 1 4, P ur d u e’s st aff t ol d t h e S a c kl ers t h at P ur d u e w o ul d p a y t h eir f a mil y $ 1 6 3 milli o n i n 2 0 1 4 a n d pr oj e ct e d $ 3 5 0 milli o n i n 2 0 1 5. At b o ar d m e eti n g aft er b o ar d m e eti n g, t h e S a c kl er s v ot e d t o h a v e P ur d u e p a y t h eir f a mili es h u n dr e ds of milli o ns i n P ur d u e pr ofits fr o m t h e s al e of o pi oi ds t hr o u g h e ntiti es i n cl u di n g d ef e n d a nts P L P Ass o ci at es H ol di n gs L. P., R os e b a y M e di c al C o m p a n y, L. P. , B e a c o n C o m p a n y , a n d P ur d u e H ol di n gs L. P.. T h e s e e ntiti es ar e o w n e d b y D ef e n d a nt D o e C o m p a ni es 1 - 1 0, w hi c h c o nsist of tr usts f or t h e b e n efit of t h e S a c kl ers. 4 2 1. T o d ef e n d a nt P L P Ass o ci at e s H ol di n gs L. P., t h e S a c kl er s v ot e d t o distri b ut e t h e f oll o wi n g a m o u nts: • • • • • • • • • • • • • • • • • • • • $ 5 0, 0 0 0, 0 0 0 i n A pril 2 0 0 8; $ 2 5 0, 0 0 0, 0 0 0 i n J u n e 2 0 0 8; $ 1 9 9, 0 1 2, 1 8 2 i n S e pt e m b er 2 0 0 8; $ 2 0 0, 0 0 0, 0 0 0 i n M ar c h 2 0 0 9; $ 1 6 2, 0 0 0, 0 0 0 i n J u n e 2 0 0 9; $ 1 7 3, 0 0 0, 0 0 0 i n S e pt e m b er 2 0 0 9; $ 2 3 6, 6 5 0, 0 0 0 i n F e br u ar y 2 0 1 0 ; $ 1 4 1, 0 0 0, 0 0 0 i n A pril 2 0 1 0; $ 2 4 0, 0 0 0, 0 0 0 i n S e pt e m b er 2 0 1 0; $ 1 6 0, 0 0 0, 0 0 0 i n D e c e m b er 2 0 1 0; $ 2, 9 3 0, 0 0 0 i n F e br u ar y 2 0 1 3; $ 3 6 7, 0 5 9 i n O ct o b er 2 0 1 4; $ 9 4 0, 0 0 0 a n d $ 2 0 4, 0 0 0 i n N o v e m b er 2 0 1 4; $ 5 7, 4 0 0, 0 0 0, a n d 1 5, 6 0 0, 0 0 0 i n D e c e m b er 2 0 1 4; $ 7 1 0, 5 0 0 i n J a n u ar y 2 0 1 5 ; $ 2, 1 6 0, 0 0 0 i n M ar c h 2 0 1 5; $ 1 3 5, 0 0 0, 0 0 0 i n S e pt e m b er 2 0 1 5; $ 1, 9 7 5, 0 0 0 i n O ct o b er 2 0 1 5 ; $ 6 0, 0 0 0, 0 0 0 i n N o v e m b er 2 0 1 5; a n d $ 1 0 7, 0 0 0, 0 0 0 i n J a n u ar y 2 0 1 6. 113 120 of 258 INDEX NO. 400016/2018 FILED: SUFFOLK COUNTY CLERK 04/11/2019 11:19 AM NYSCEF DOC. NO. 19 4 2 2. RECEIVED NYSCEF: 04/11/2019 V ersi o n D at e d A pr. 1 0, 2 0 1 9 wit h C ert ai n R e d a cti o ns R e m o v e d P er P arti es' A gr e e m e nt T h e S a c kl er s als o v ot e d t o distri b ut e P ur d u e’s o pi oi d pr ofits t o D ef e n d a nt P ur d u e H ol di n gs, L. P. i n cl u di n g $ 1 5 milli o n i n F e br u ar y 2 0 1 3 a n d $ 5, 5 1 2, 5 0 0 i n J u n e 2 0 1 5. 4 2 3. I n e arl y 2 0 0 8, t h e S a c kl er B o ar d a ut h ori z e d distri b uti o ns t o D ef e n d a nts R os e b a y a n d B e a c o n i n t h e a m o u nt of $ 2 7 5 milli o n e a c h. I n N o v e m b er 2 0 0 8, t h e P ur d u e b o ar d a ut h ori z e d a n a d diti o n al $ 3 2 5 milli o n b e distri b ut e d t o R os e b a y a n d B e a c o n. I n D e c e m b er 2 0 1 0, t h e S a c kl ers a ut h ori z e d $ 1 0 0 milli o n i n P ur d u e’s pr ofits t o b e p ai d t o R os e b a y a n d B e a c o n ( $ 5 0 milli o n e a c h). I n A pril 2 0 1 1, t h e S a c kl ers v ot e d t o dis b urs e $ 1 8 9 , 7 0 0, 0 0 0 t o R os e b a y a n d B e a c o n t hr o u g h P L P Ass o ci at es H ol di n g L. P. A n d a g ai n i n J u n e a n d S e pt e m b er 2 0 1 1, t h e S a c kl ers v ot e d t o dis b urs e $ 2 0 0 milli o n a n d $ 1 4 0, 8 0 0, 0 0 0 t o R os e b a y M e di c al a n d B e a c o n t hr o u g h P L P Ass o ci at es H ol di n g L. P. , r es p e cti v el y. 4 2 4. P ur d u e als o m a d e si g nifi c a nt n o n -t a x distri b uti o ns i n r e c e nt y e ars. I n J ul y 2 0 1 2, a $ 1 1 3 milli o n n o n-t a x distri b uti o n w as m a d e bri n gi n g t h e y e ar -t o-d at e t ot al t o $ 2 4 2 milli o n ” i n n o n t a x distri b uti o ns. B y M a y 2 0 1 4, P ur d u e h a d alr e a d y m a d e o v er $ 1 0 0 milli o n i n 2 0 1 4 n o n -t a x distri b uti o ns. I n 2 0 1 4, P ur d u e m a d e a p pr o xi m at el y $ 2 7 4. 4 milli o n p a y m e nts i n “ n o n -t a x distri b uti o ns ” t o D ef e n d a nts R os e b a y M e di c al a n d B e a c o n. 4 2 5. A c c or di n g t o a 2 0 1 4 P ur d u e Fi n a n c e U p d at e, P ur d u e’s “ E x -U S ” e x p e ns es f or 2 0 1 3 c o nsist e d of a p pr o xi m at el y $ 9 7 milli o n . “ E x-U S ” e x p e ns es r ef er t o P ur d u e’s e x p e ns es or i n v est m e nts o utsi d e t h e U nit e d St at es. 4 2 6. P ur d u e’s d o c u m e nts a c k n o wl e d g e d t h e t oll “ n o n -t a x distri b uti o ns ” a n d i n cr e asi n g “ E x -U S ” — or P ur d u e’s p ur p ort e d i n v est m e nts o utsi d e t h e U nit e d St at es — w er e t a ki n g o n P ur d u e’s fi n a n c es. 114 121 of 258 INDEX NO. 400016/2018 FILED: SUFFOLK COUNTY CLERK 04/11/2019 11:19 AM NYSCEF DOC. NO. 19 4 2 7. RECEIVED NYSCEF: 04/11/2019 V ersi o n D at e d A pr. 1 0, 2 0 1 9 wit h C ert ai n R e d a cti o ns R e m o v e d P er P arti es' A gr e e m e nt B y 2 0 1 4, t h e writi n g f or P ur d u e w as o n t h e w all. H o w e v er, n o w h er e i n P ur d u e’s i nt er n al d o c u m e nts is t h er e a n y c o nsi d er ati o n of P ur d u e’s u n d et er mi n e d l e g al li a biliti es c a us e d b y t h e o pi oi ds liti g ati o n. I nst e a d, as d e m o nstr at e d a b o v e, P ur d u e a n d t h e Sa c kl er D ef e n d a nts distri b ut e d h u n dr e ds of milli o ns of P ur d u e’s o pi oi d pr ofits t o t h e S a c kl er F a mili es e a c h y e ar. P ur d u e h as b e e n i n v ol v e d i n t w o d e c a d es of liti g ati o n f or its mis c o n d u ct vis - à-vis t h e s al e a n d m ar k eti n g of O x y C o nti n. P ur d u e a n d t h e S a c kl e rs t h us al w a ys u n d erst o o d, a n d w er e a w ar e of , t h e c at astr o p hi c eff e ct of i n v esti g ati o ns a n d l a ws uits r el ati n g t o t h e o pi oi ds liti g ati o n. B ut P ur d u e’s a n d t h e S a c kl er s’ b usi n ess as us u al a p pr o a c h m e a ns — b y P ur d u e’s o w n r e c e nt a d missi o n — t h at P ur d u e c a n n ot p a y w h at it o w es t o pl ai ntiffs i n cl u di n g N e w Y or k St at e b e c a us e distri b uti o ns t o P ur d u e’s o w n ers ( t h e S a c kl ers) c o nti n u e d u n a b at e d d uri n g t h e r el e v a nt ti m e p eri o d. 4 2 8. P ur d u e, at t h e dir e cti o n of t h e S a c kl er s, fr a u d ul e ntl y c o n v e y e d h u n dr e ds of milli o ns of d oll ars of P ur d u e’s pr ofits fr o m o pi oi ds t o t h e S a c kl er F a mili es e a c h y e ar d uri n g t h e r el e v a nt ti m e p eri o d d es pit e P ur d u e’s a n d t h e S a c kl er s’ k n o wl e d g e t h at t h e y f a c e d c ert ai n, a n d si g nifi c a nt, li a biliti es b e c a us e of t h e m ultit u d e of liti g ati o ns a g ai nst P ur d u e b y st at e att or n e ys g e n er al, i n cl u di n g N e w Y or k ’s Att or n e y G e n er al. 115 122 of 258 INDEX NO. 400016/2018 FILED: SUFFOLK COUNTY CLERK 04/11/2019 11:19 AM NYSCEF DOC. NO. 19 RECEIVED NYSCEF: 04/11/2019 V ersi o n D at e d A pr. 1 0, 2 0 1 9 wit h C ert ai n R e d a cti o ns R e m o v e d P er P arti es' A gr e e m e nt 123 of 258 FILED: SUFFOLK COUNTY CLERK 04/11/2019 11:19 AM NYSCEF DOC. NO. 19 INDEX NO. 400016/2018 RECEIVED NYSCEF: 04/11/2019 124 of 258 INDEX NO. 400016/2018 FILED: SUFFOLK COUNTY CLERK 04/11/2019 11:19 AM NYSCEF DOC. NO. 19 RECEIVED NYSCEF: 04/11/2019 V ersi o n D at e d A pr. 1 0, 2 0 1 9 wit h C ert ai n R e d a cti o ns R e m o v e d P er P arti es' A gr e e m e nt P ai n R eli ef ” a n d a h y p ot h eti c al p ati e nt’s f e ar t h at “I’ m afr ai d I’ll b e c o m e a dr u g a d di ct. ” J a nss e n’s r es p o ns e: “ A d di cti o n is r el ati v el y r ar e w h e n p ati e nts t a k e o pi oi ds a p pr o pri at el y. ” 4 3 6. T o br o a d e n t h e i m p a ct of its d e c e pti v e m ar k eti n g, J a nss e n w or k e d cl os e l y wit h est a blis h e d F r o nt Gr o u ps, pr o vi di n g t h e l att er al m ost h alf a milli o n d oll ars i n f u n di n g b et w e e n 2 0 1 2 a n d 2 0 1 7 al o n e . As d es cri b e d a b o v e, t h es e gr o u ps h a v e a si n g ul ar a g e n d a: t o d o w n pl a y f e ars a b o ut a d di cti o n fr o m o pi oi ds s o t h at pr es cri b ers will f e el c o mf ort a bl e pr es cri bi n g t h e m e arl y a n d oft e n. 4 3 7. Fr o nt G r o u ps s er v e d as e xt e nsi o ns of J a nss e n’s o w n m ar k eti n g d e p art m e nt. F or e x a m pl e, J a nss e n t e a m e d wit h t h e A P F t o “ dr aft m e di a m at eri als a n d e x e c ut e [ a] l a u n c h pl a n ” f or J a nss e n's dr u gs at a n u p c o mi n g m e eti n g of t h e A A P M. J a nss e n als o dr e w o n A P F p u bli c ati o n s t o c orr o b or at e cl ai ms i n its o w n m ar k eti n g m at eri als a n d its s al es tr ai ni n g. J a nss e n p ers o n n el p arti ci p at e d i n a M ar c h 2 0 1 1 c all wit h A P F's “ C or p or at e R o u n dt a bl e, ” i n w hi c h t h e y w or k e d wit h A P F t o d e v el o p str at e gi es t o pr o m ot e c hr o ni c o pi oi d t h er a p y. 4 3 8. Ja nss e n w or k e d wit h A A P M a n d A G S t o cr e at e a p ati e nt e d u c ati o n g ui d e titl e d Fi n di n g R eli ef: P ai n M a n a g e m e nt f or Ol d er A d ults ( “Fi n di n g R eli ef ”) . T o a c c o m p a n y t his g ui d e , J a nss e n pr o d u c e d a vi d e o t h at w as a c c essi bl e t hr o u g h t h e A A P M w e bsit e. J a nss e n als o wor k e d wit h A G S t o d e v el o p A G S’s C M E pr o m oti n g its 2 0 0 9 G ui d eli n es f or t h e P h ar m a c ol o gi c al M a n a g e m e nt of P ersist e nt P ai n i n Ol d er P ers o ns. 4 3 9. J a nss e n fr e q u e ntl y hi d its d e c e pti v e m ess a gi n g i n el a b or at el y pr o d u c e d, u n br a n d e d m ar k eti n g m at eri als. M ost pr o mi n e nt a m o n g t h es e eff orts w as t h e J a nss e n w e bsit e, l etst al k p ai n. or g, w hi c h w as dir e ct e d at p ati e nts. St arti n g i n 2 0 0 9, J a nss e n fi n a n c e d t h e w e bsit e a n d cr e at e d its c o nt e nt i n c o nj u n cti o n wit h A P F a n d A A P M . Alt h o u g h t h e w e bsit e is n o l o n g er p u bli cl y a c c essi bl e , arti cl es p u blis h e d o n it r e m ai n a c c essi bl e els e w h er e o n t h e i nt er n et t o d a y. 118 125 of 258 INDEX NO. 400016/2018 FILED: SUFFOLK COUNTY CLERK 04/11/2019 11:19 AM NYSCEF DOC. NO. 19 4 4 0. RECEIVED NYSCEF: 04/11/2019 V ersi o n D at e d A pr. 1 0, 2 0 1 9 wit h C ert ai n R e d a cti o ns R e m o v e d P er P arti es' A gr e e m e nt J a nss e n e x er cis e d s u bst a nti al c o ntr ol o v er t h e c o nt e nt of its L et ’s T al k P ai n w e bsit e , i nt er n all y r ef erri n g t o it as pr o m oti n g t a p e nt a d ol, t h e dr u g t h e c o m p a n y s ol d as N u c y nt a. J a nss e n r e g ar d e d l etst al k p ai n. or g a n d a n ot h er w e bsit e, pr es cri b er es p o nsi bl y. c o m ( d es cri b e d b el o w) as i nt e gr al p arts of N u c y nt a’s l a u n c h: 4 4 1. J a nss e n p ers o n n el vi e w e d A P F a n d A A P M as “ c o aliti o n m e m b ers ” i n t h e fi g ht t o i n cr e as e m ar k et s h ar e. J a nss e n a n d A P F e nt er e d i nt o a p art n ers hi p t o “ k e e p p ai n a n d t h e i m p ort a n c e of r es p o nsi bl e p ai n m a n a g e m e nt t o p of mi n d ” a m o n g pr es cri b ers a n d p ati e nts, w or ki n g t o r e a c h “ t ar g et a u di e n c es ” t h at i n cl u d e d p ati e nts, p ai n m a n a g e m e nt p h ysi ci a ns, pri m ar y c ar e p h ysi ci a ns, a n d K O Ls. O n e of t h e r ol es J a nss e n ass u m e d i n t h e pr o c ess w as t o “ [r] e vi e w, pr o vi d e c o u ns el o n, a n d a p pr o v e m at eri als. ” J a nss e n di d i n f a ct r e vi e w a n d a p pr o v e m at eri al f or t h e L et’s T al k P ai n w e bsit e , as e vi d e n c e d b y t h e f oll o wi n g e dits b y a J a nss e n e x e c uti v e t o t h e tr a ns cri pt of a vi d e o t h at w as t o a p p e ar o n t h e sit e: 119 126 of 258 INDEX NO. 400016/2018 FILED: SUFFOLK COUNTY CLERK 04/11/2019 11:19 AM NYSCEF DOC. NO. 19 4 4 2. RECEIVED NYSCEF: 04/11/2019 V ersi o n D at e d A pr. 1 0, 2 0 1 9 wit h C ert ai n R e d a cti o ns R e m o v e d P er P arti es' A gr e e m e nt E v e n t h o u g h J a nss e n’s L et’s T al k P ai n w e bsit e w as h ost e d b y A P F, c o ns ulti n g a gr e e m e nts a n d i nt er n al m e m os c o nfir m t h at J a nss e n h a d a p pr o v al ri g hts o v er its c o nt e nt. T h us, b y J a nss e n’s c o m m a n d, t h e fi n al v ersi o n of t h e vi d e o p ost e d o n t h e w e bsit e o mitt e d t h e stri c k e n l a n g u a g e a b o v e. 4 4 3. T h e L et’s T al k P ai n w e bsit e mis i nf or m e d c o ns u m ers t h at “t h e sti g m a of dr u g a d di cti o n a n d a b us e ” ass o ci at e d wit h t h e us e of o pi oi ds st e m m e d fr o m a “ l a c k of u n d erst a n di n g a b o ut a d di cti o n. ” T h e w e bsit e als o pr o m ot e d t h e s p uri o us c o n c e pt of “ ps e u d o a d di cti o n, ” w hi c h it d es cri b e d as “ p ati e nt b e h a vi ors t h at m a y o c c ur w h e n p ai n is u n d er -tr e at e d ” b ut diff ers “fr o m tr u e a d di cti o n b e c a us e s u c h b e h a vi ors c a n b e r es ol v e d wit h eff e cti v e p ai n m a n a g e m e nt. ” T h e w e bsit e als o misl e a di n gl y st at e d t h at t h e us e of o pi oi ds f or t h e tr e at m e nt of c hr o ni c p ai n w o ul d l e a d t o p ati e nts r e g ai ni n g f u n cti o n alit y a n d f e at ur e d a n i nt er vi e w cl ai mi n g t h at o pi oi ds w er e w h at all o w e d a p ati e nt t o “ c o nti n u e t o f u n cti o n. ” 4 4 4. J a nss e n als o pr o d u c e d a n d diss e mi n at e d c o ns u m er-dir e ct e d vi d e os t hr o u g h its affili ati o n wit h t h e L et’s T al k P ai n C o aliti o n. T h es e vi d e os w er e d esi g n e d t o e n c o ur a g e p ati e nts t o s e e k tr e at m e nt , i. e., o pi oi ds, f or c hr o ni c pai n. O n e s u c h vi d e o, titl e d “ S af e Us e of O pi oi ds, ” a n d w hi c h is c urr e ntl y a c c essi bl e vi a w w w. Y o u T u b e. c o m, o v erst at es t h e b e n efits of c hr o ni c o pi oi d us e a n d o mits dis c ussi o n of t h e ris ks of a d di cti o n a n d a b us e ass o ci at e d wit h o pi oi ds. 120 127 of 258 INDEX NO. 400016/2018 FILED: SUFFOLK COUNTY CLERK 04/11/2019 11:19 AM NYSCEF DOC. NO. 19 4 4 5. RECEIVED NYSCEF: 04/11/2019 V ersi o n D at e d A pr. 1 0, 2 0 1 9 wit h C ert ai n R e d a cti o ns R e m o v e d P er P arti es' A gr e e m e nt A n ot h er J a nss e n -c o ntr oll e d u n br a n d e d m ar k eti n g pr oj e ct w as a w e bsit e ir o ni c all y c all e d pr es cri b er es p o nsi bl y. c o m, w hi c h pr o m ot e d t h e o p p osit e of its titl e. T his w e bsit e, w hi c h w as ai m e d at b ot h pr es cri b ers a n d p ati e nts, cl ai m e d t h at c o n c er ns a b o ut o pi oi d a d di cti o n ar e “ o v erst at e d. ” A dis cl ai m er at t h e b ott o m of t h e w e bsit e st at e d t h at t h e “sit e is p u blis h e d b y J a nss e n P h ar m a c e uti c als, I n c., w hi c h is s ol el y r es p o nsi bl e f or its c o nt e nt. ” 4 4 6. J a nss e n’s pr es cri b er es p o nsi bl y. c o m w e bsit e c o nt ai ns n u m er o us arti cl es — still a c c essi bl e t o b o t h pr es cri b ers a n d p ati e nts— t h at misr e pr es e nt, tri vi ali z e, or f ail t o dis cl os e t h e k n o w n ris ks of o pi oi d pr o d u cts. F or e x a m pl e, o n e arti cl e dis miss es c o n c er ns a b o ut o pi oi d a d di cti o n as “ oft e n o v er esti m at e d, ” a n d pr o cl ai ms t h at “tr u e a d di cti o n o c c urs i n o n l y a s m all p er c e nt a g e of p ati e nts ”: 4 4 7. T h e s a m e arti cl e misl e a di n gl y s u g g ests t h at “ wit h a p pr o pri at e d osi n g a n d titr ati o n, [ o pi oi ds] c a n b e eff e cti v e a n d s af e m e di c ati o ns f or t h e tr e at m e nt of p ai nf ul c o n diti o ns. ” It is d e c e pti v e t o d es cri b e c hr o ni c o pi oi d t h er a p y as “ eff e cti v e a n d s af e ” wit h a p pr o pri at e d osi n g a n d titr ati o n w hil e d es cri bi n g t h e ris ks of a d di cti o n ass o ci at e d wit h c hr o ni c o pi oi d us e as “ o v er esti m at e d ” a n d o c c urri n g i n “ o nl y a s m all p er c e nt a g e ” of p ati e nts. 4 4 8. Ot h er arti cl es o n pr es cri b er es p o nsi b l y. c o m misl e a di n gl y i nstr u ct pr es cri b ers a n d p ati e nts t h at : 121 128 of 258 INDEX NO. 400016/2018 FILED: SUFFOLK COUNTY CLERK 04/11/2019 11:19 AM NYSCEF DOC. NO. 19 RECEIVED NYSCEF: 04/11/2019 V ersi o n D at e d A pr. 1 0, 2 0 1 9 wit h C ert ai n R e d a cti o ns R e m o v e d P er P arti es' A gr e e m e nt 129 of 258 INDEX NO. 400016/2018 FILED: SUFFOLK COUNTY CLERK 04/11/2019 11:19 AM NYSCEF DOC. NO. 19 4 5 2. RECEIVED NYSCEF: 04/11/2019 V ersi o n D at e d A pr. 1 0, 2 0 1 9 wit h C ert ai n R e d a cti o ns R e m o v e d P er P arti es' A gr e e m e nt E vi d e n c e fr o m pr e cli ni c al st u di es h a d s u g g est e d t h at effi c a c y of t a p e nt a d ol w as t h o u g ht t o b e d u e t o t w o s e p ar at e a cti o ns: ( a) m u-o pi oi d r e c e pt or a g o nis m, m e a ni n g t h at it a cti v at e s a n o pi oi d r e c e pt or; a n d ( b) n or e pi n e p hri n e r e u pt a k e i n hi biti o n, m e a ni n g t h at it i m p a cts n e ur otr a ns mitt ers (s u c h as n or e pi n e p hri n e) t h at c o m m u ni c at e b et w e e n br ai n c ells. T h e F D A h as w ar n e d t h at s u c h pr e cli ni c al st u di es ar e of li mit e d utilit y a n d ar e “ n ot a s u bstit ut e f or st u di es of w a ys t h e dr u g will i nt er a ct wit h t h e h u m a n b o d y. ” 4 5 3. J a nss e n n e v ert h el ess m ar k et e d N u c y nt a as h a vi n g a “ d u al m e c h a nis m of a cti o n, ” i. e., t h at t h e dr u g a cts as b ot h a n o pi oi d a n d a n or e pi n e p hri n e r e u pt a k e i n hi bit or ( “ N RI ”). J a nss e n e xt e nsi v el y r eli e d o n t his u n pr o v e n d u al m e c h a nis m of a cti o n t o d e c e pti v el y p ortr a y N u c y nt a as a mil d o pi oi d t h at is l ess a d di cti v e t h a n ot h er S c h e d ul e II o pi oi ds s u c h as O x y C o nti n. F or e x a m pl e, J a nss e n oft e n d es cri b e d t a p e nt a d ol as “ p ot e nti at[i n g ] m u-s p ari n g pr o p erti es, ” or off eri n g “ m u r e c e pt or s p ari n g b e n efits, ” or h a vi n g a “ d u al [ m e c h a nis m of a cti o n t h at] p ot e nti at es m u-s p ari n g pr o p erti es, ” or as pr o vi di n g a “ m ulti -p at h w a y a p pr o a c h [t h at h as] m u r e c e pt or s p ari n g eff e cts. ” J a nss e n als o m ai nt ai n e d t h at t h e p ur p ort e d d u al m e c h a nis m of a cti o n all o w e d N u c y nt a t o b e m or e eff e cti v e at tr e ati n g c ert ai n t y p es of p ai n, wit h f e w er si d e eff e cts s u c h as wit h dr a w al. 4 5 4. I n m a ki n g t h es e r e pr es e nt ati o ns, J a nss e n r o uti n el y o bs c ur e d or f ail e d t o dis cl os e t h at N u c y nt a’s e x a ct m e c h a nis m of a cti o n is u n k n o w n a n d t h at t h e c o m p a n y’s r e pr es e nt ati o ns r e g ar di n g t h e dr u g’s d u al m e c h a nis m of a cti o n w er e s u p p ort e d o nl y b y li mit e d e vi d e n c e gl e a n e d fr o m pr e cli ni c al st u di es. 4 5 5. J a nss e n t h us d e c ei v e d pr es cri b ers i nt o b eli e vi n g t h at N u c y nt a w as n ot li k e ot h er hi g hl y a d di cti v e a n d d a n g er o us S c h e d ul e II n ar c oti cs, b ut w as m or e a ki n t o s af er, o v er-t h e- c o u nt er p ai n m e di c ati o ns. J a nss e n’s b usi n ess pl a ns e x pli citl y c all e d f or “ n o n o pi oi d ”: 123 130 of 258 m ar k eti n g N u c y nt a as a FILED: SUFFOLK COUNTY CLERK 04/11/2019 11:19 AM NYSCEF DOC. NO. 19 INDEX NO. 400016/2018 RECEIVED NYSCEF: 04/11/2019 131 of 258 INDEX NO. 400016/2018 FILED: SUFFOLK COUNTY CLERK 04/11/2019 11:19 AM NYSCEF DOC. NO. 19 RECEIVED NYSCEF: 04/11/2019 V ersi o n D at e d A pr. 1 0, 2 0 1 9 wit h C ert ai n R e d a cti o ns R e m o v e d P er P arti es' A gr e e m e nt Distri ct H u b M e eti n gs, at w hi c h J a nss e n p eri o di c all y g at h er e d its s al es t e a ms t o dis c uss str at e g y. 4 6 0. T o i n c e nti vi z e a g gr essi v e s al es t a cti cs , J a nss e n p ai d its Ne w Y or k s al es r e pr es e nt ati v es b o n us es b as e d o n t h e n u m b er of pr es cri pti o ns f or N u c y nt a writt e n b y t h e pr es cri b ers t h e y visit e d, wit h a v er a g e b o n us a m o u nts r a n gi n g fr o m $ 5 0 0 t o $ 5, 0 0 0 p er q u art er a n d t h e hi g h estp erf or mi n g r e pr es e nt ati v es m a ki n g b o n us es of o v er $ 2 0, 0 0 0 p er q u art er. 4 6 1. C all n ot es e nt er e d b y J a nss e n s al es r e pr es e nt ati v es c o nfir m t h at t h e y c o m m u ni c at e d t o N e w Y or k H C Ps t h e f als e a n d misl e a di n g m ess a g e t h at N u c y nt a h as a u ni q u e “ m e c h a nis m of a cti o n ” — i. e., t h at it is mil d er a n d l ess a d di cti v e t h a n ot h er o pi oi ds — t h o us a n ds of ti m es. 4 6 2. J a nss e n’s c all n ot es als o s h o w t h at d o z e ns of N e w Y or k H C Ps w h o m J a nss e n fr e q u e ntl y d et ail e d a n d p ers u a d e d t o writ e N u c y nt a pr es cri pti o ns, i n cl u di n g u n d er N e w Y or k’s M e di c ai d pr o gr a m, w er e l at er i n di ct e d or c o n vi ct e d f or ill e g al p r es cri bi n g of c o ntr oll e d s u bst a n c es. F or e x a m pl e: • O n J u n e 2 9, 2 0 0 9, a J a nss e n s al es r e pr es e nt ati v e visit e d Dr. D a nt e C u b a n g b a n g ( c urr e ntl y u n d er i n di ct m e nt f or ill e g al pr es cri bi n g) i n his Q u e e ns offi c e, writi n g: “ N U C - Dr. i s R Xi n g f or his c as h p a yi n g p ati e nts alr e a d y. ” O n A u g ust 5, 2 0 0 9, a J a nss e n s al es r e pr es e nt ati v e a g ai n visit e d Dr. C u b a n g b a n g, writi n g: “ S p o k e t o t h e Dr. a b o ut M e di c ai d r ei m b urs e m e nt w h e n usi n g a f or m ul ar y pr o d u ct as o p p[ o]s e d t o a n o n f or[] m[ u]l ar y m e d. ” • O n A u g ust 5, 2 0 0 9, a J a nss e n s al es r e pr es e nt ati v e visit e d t h e St at e n Isl a n d offi c e of p h ysi ci a n’s assist a nt L e o n ar d M ar c h ett a ( w h o pl e a d e d g uilt y i n 2 0 1 5 t o r u n ni n g a m assi v e pr es cri pti o n o pi oi ds distri b uti o n ri n g), writi n g: “ Dis c uss e d usi n g N u c y nt a w h er e h e is usi n g P er c o c et or O x y. R e vi e w e d t h at N u c y nt a is f ull y c o v er e d o n N Y M e di c ai d. As k e d if t h er e w as a n y r e as o n w h y h e w o ul d n't st art usi n g N u c y nt a. S ai d n o. Cl os e d f or p ati e nts w h er e h e w o ul d us e P er c o c et or O x y. ” • O n F e br u ar y 9 , 2 0 1 0, a J a nss e n s al es r e pr es e nt ati v e visit e d t h e Br o o kl y n offi c e of Dr. S h ai k h H as a n (l at er c o n vi ct e d f or s elli n g o pi oi d pills f or c as h), writi n g: “ d o c h as a n s ai d h e k e e ps f or g etti n g t o pr es cri b e n u c y nt a. i h a n g a p ost er o n t h e w all t o r e mi n d hi m. ” Aft er a n ot h er visit, t h e r e p wr ot e: “ cl os e d f or m e di c ai d pri m ar y a n d m a n a g e[ d] m e di c ai d pts. ” 125 132 of 258 INDEX NO. 400016/2018 FILED: SUFFOLK COUNTY CLERK 04/11/2019 11:19 AM NYSCEF DOC. NO. 19 4 6 3. RECEIVED NYSCEF: 04/11/2019 V ersi o n D at e d A pr. 1 0, 2 0 1 9 wit h C ert ai n R e d a cti o ns R e m o v e d P er P arti es' A gr e e m e nt J a nss e n als o hir e d, tr ai n e d, a n d d e pl o y e d H C Ps as p art of its s p e a k ers’ b ur e a u t o pr o m ot e N u c y nt a, p a yi n g t h e m t o pr es e nt J a nss e n m at eri als c o nt ai ni n g d e c e pti v e i nf or m ati o n a b o ut t h e ris ks, b e n efits, a n d s u p eri orit y of N u c y nt a. F or e x a m pl e, a M ar c h 2 0 1 1 pr es e nt ati o n titl e d A N e w P ers p e cti v e F or M o d er at e t o S e v er e A c ut e P ai n R eli ef: A F o c us o n t h e B al a n c e of Effi c a c y a n d T ol er a bilit y s et o ut t h e f oll o wi n g a d v ers e e v e nts ass o ci at e d wit h us e of N u c y nt a: n a us e a, v o miti n g, c o nsti p ati o n, di arr h e a, di z zi n ess, h e a d a c h e, a n xi et y, r estl ess n ess, i ns o m ni a, m y al gi a, a n d b o n e p ai n. It c o m pl et el y o mitt e d t h e ris ks of mis us e, a b us e, a d di cti o n, h y p er al g esi a (i n cr e as e d p ai n), h or m o n al d ysf u n cti o n, d e cli n e i n i m m u n e f u n cti o n, m e nt al cl o u di n g, c o nf usi o n, a n d ot h er k n o w n, s eri o us ris ks ass o ci at e d wit h c hr o ni c o pi oi d t h er a p y. T h e pr es e nt ati o n als o mi ni mi z e d t h e ris ks of wit h dr a w al b y st ati n g t h at “ m or e t h a n 8 2 % of s u bj e cts tr e at e d wit h t a p e nt a d ol I R ( N u c y nt a) r e p ort ed n o o pi oi d wit h dr a w al s y m pt o ms. ” 4 6 4. J a nss e n’s s p e a k er e v e nts t y pi c all y o c c urr e d at u ps c al e r est a ur a nts, wit h di n n er a n d dri n ks p ai d f or b y t h e c o m p a n y . A n i n vit ati o n t o j oi n t h e s p e a k ers’ b ur e a u w as b ot h a r e w ar d f or writi n g N u c y nt a pr es cri pti o ns — b e c a us e s p e a k ers w er e w ell c o m p e ns at e d b y J a nss e n — a n d a n i n c e nti v e t o c o nti n u e writi n g pr es cri pti o ns. 3. J a nss e n’s T a r g eti n g of V ul n e r a bl e E l d e rl y P ati e nts 4 6 5. J a nss e n’s b arr a g e of li es a b o ut o pi oi ds als o w as t ar g et e d at v ul n er a bl e el d erl y p e o pl e, a p o p ul ati o n m or e s us c e pti bl e t o t h e a d v ers e eff e cts of o pi oi ds, i n cl u di n g r es pir at or y d e pr essi o n a n d ris k of b o n e fr a ct ur e. 4 6 6. J a nss e n’s p ati e nt e d u c ati o n g ui d e Fi n di n g R eli ef , w hi c h t h e c o m p a n y distri b ut e d vi a its s al es r e pr es e nt ati v es t e ns of t h o us a n ds of ti m es t hr o u g h o ut t h e U. S. , w a s p a c k e d wit h l ar g epri nt, b ol d -f a c e d li es a b o ut t h e ris ks of o pi oi ds, dis missi n g as “ m yt hs ” t h e pr o v e n f a cts t h at o pi oi ds ar e a d di cti v e, m a k e f u n cti o ni n g m or e diffi c ult, a n d oft e n m ust b e pr es cri b e d i n hi g h er d os es o v er ti m e: 126 133 of 258 INDEX NO. 400016/2018 FILED: SUFFOLK COUNTY CLERK 04/11/2019 11:19 AM NYSCEF DOC. NO. 19 4 6 7. RECEIVED NYSCEF: 04/11/2019 V ersi o n D at e d A pr. 1 0, 2 0 1 9 wit h C ert ai n R e d a cti o ns R e m o v e d P er P arti es' A gr e e m e nt T h e g ui d e f als el y d es cri b e d as “f a cts ” n u m er o us u ns u p p ort e d cl ai ms a b o ut i m pr o v e d f u n cti o ni n g, i n cl u di n g t h at o pi oi ds c a n m a k e it p ossi bl e f or p e o pl e wit h c hr o ni c p ai n t o “r et ur n t o n or m al , e. g. , t o g et b a c k t o w or k, w al k or r u n, pl a y s p orts, a n d p arti ci p at e i n ot h er a cti viti es. ” I n 2 0 0 8, t h e F D A f o u n d s u c h st at e m e nts t o b e d e c e pti v e if m a d e wit h o ut s u bst a nti al e vi d e n c e. U ntil r e c e ntl y, Fi n di n g R eli ef w as still a v ail a bl e o nli n e. 4 6 8. T h e J a nss e n -s p o ns or e d A G S G ui d eli n es f als el y st at e d t h at “t h e ris ks [ of a d di cti o n] ar e e x c e e di n gl y l o w i n ol d er p ati e nts wit h n o c urr e nt or p ast hist or y of s u bst a n c e a b us e, ” alt h o u g h t h e st u d y s u p p orti n g t his ass erti o n di d n ot a n al y z e a d di cti o n r at es b y a g e. T h e A G S G ui d eli n es als o st at e d f als el y t h at “[ a]ll p ati e nts wit h m o d er at e t o s e v er e p ai n . . . s h o ul d b e c o nsi d er e d f or o pi oi d t h er a p y (l o w q u alit y of e vi d e n c e, str o n g r e c o m m e n d ati o n). ” 4 6 9. J a nss e n als o s p o ns or e d, pr es e nt e d, or distri b ut e d st u di es s u g g esti n g t h at o pi oi ds s h o ul d b e pr es cri b e d t o t h e el d erl y. F or e x a m pl e, a n arti cl e p u blis h e d i n t h e J o ur n al of t h e A m eri c a n 127 134 of 258 FILED: SUFFOLK COUNTY CLERK 04/11/2019 11:19 AM NYSCEF DOC. NO. 19 INDEX NO. 400016/2018 RECEIVED NYSCEF: 04/11/2019 135 of 258 FILED: SUFFOLK COUNTY CLERK 04/11/2019 11:19 AM NYSCEF DOC. NO. 19 INDEX NO. 400016/2018 RECEIVED NYSCEF: 04/11/2019 136 of 258 INDEX NO. 400016/2018 FILED: SUFFOLK COUNTY CLERK 04/11/2019 11:19 AM NYSCEF DOC. NO. 19 RECEIVED NYSCEF: 04/11/2019 V ersi o n D at e d A pr. 1 0, 2 0 1 9 wit h C ert ai n R e d a cti o ns R e m o v e d P er P arti es' A gr e e m e nt o pi oi ds t o a N e w Y or k Cit y p h ysi ci a n’s assist a nt w h o m it k n e w h a d a n offi c e t h at l o o k e d li k e a “t y pi c al ‘ Fl ori d a Pill Mill’. ” M alli n c kr o dt’s mis c o n d u ct w as s o p er v asi v e t h at t h e D E A r ef err e d t o it as “[t] h e ki n g pi n of t h e dr u g c art el. ” 4 7 5. B y 2 0 0 6, M alli n c kr o dt w as w ell a w ar e of t h e s c al e of t h e o pi oi d e pi d e mi c. R at h er t h a n t a ki n g st e ps t o st o p t h e h ar m, it p ersist e ntl y g o a d e d its distri b ut ors t o s ell m or e a n d m or e of t h e c o m p a n y’s o pi oi ds. 4 7 6. Ne w I n o n e e x c h a n g e, a n e x e c uti v e of a r e gi o n al o pi oi ds distri b ut or— w hi c h s u p pli e d Y or k p h ar m a ci es a n d w h os e li c e ns e w as l at er s us p e n d e d b y t h e D E A — e x h ort e d M a lli n c kr o dt’s n ati o n al s al es m a n a g er t o k e e p s u p pl yi n g it wit h o x y c o d o n e 3 0 m g pills s o t h at it c o ul d k e e p pill mills f ull y st o c k e d, r e m ar ki n g t h at “[i]t’s li k e p e o pl e ar e a d di ct e d t o t h es e t hi n gs. O h, w ait, p e o pl e ar e … ” T h e M alli n c kr o dt e x e c uti v e r es p o n d e d: “J ust li k e D orit os – k e e p e ati n g, w e’ll m a k e m or e. ” ( e m p h asis a d d e d) 4 7 7. Aft er 2 0 0 6, M alli n c kr o dt r a m p e d u p its eff orts t o e x p a n d t h e l u cr ati v e o pi oi ds m ar k et a n d t o gr a b a bi g g er pi e c e of t h at pi e. I n 2 0 1 1, M alli n c kr o dt s o u g ht t o i n cr e as e its s al es of o x y c o d o n e, a m aj or dri v er of a d di cti o n, d es pit e t h e c o m p a n y’s k n o wl e d g e of wi d es pr e a d di v ersi o n. 4 7 8. I n 2 0 1 2, M alli n c kr o dt’s fi v e-y e ar pl a n i d e ntifi e d “ ni c h e ” m ar k ets s u c h as n ar c oti cs f or gr o wt h o p p ort u niti es. At t h at ti m e, M alli n c kr o dt c o nsi d er e d l e gisl ati o n r estri cti n g pill mills t o b e a t hr e at t o its i nt er ests, b e c a us e it w o ul d h a v e li mit e d o pi oi d pr es cri bi n g. 4 7 9. I n its fili n gs wit h t h e S E C, M alli n c kr o dt h as st at e d t h at it m ar k ets its c o ntr oll e d s u bst a n c es “ pri n ci p all y t hr o u g h i n d e p e n d e nt c h a n n els, i n cl u di n g dr u g distri b ut ors, s p e ci alt y p h ar m a c e uti c al distri b ut ors, r et ail p h ar m a c y c h ai ns, f o o d st or e c h ai ns wit h p h ar m a ci es, p h ar m a c e ut i c al b e n efit m a n a g ers t h at h a v e m ail or d er p h ar m a ci es a n d h os pit al b u yi n g gro u ps. ” I n p arti c ul ar, M alli n c kr o dt h as m ar k et e d its g e n eri c o pi oi ds t o Distri b ut or D ef e n d a nts M c K ess o n, 130 137 of 258 INDEX NO. 400016/2018 FILED: SUFFOLK COUNTY CLERK 04/11/2019 11:19 AM NYSCEF DOC. NO. 19 RECEIVED NYSCEF: 04/11/2019 V ersi o n D at e d A pr. 1 0, 2 0 1 9 wit h C ert ai n R e d a cti o ns R e m o v e d P er P arti es' A gr e e m e nt C ar di n al, A m eri s o ur c e, a n d R o c h est er Dr u g , c a usi n g e n or m o us q u a ntiti es of o pi oi ds t o b e d eli v er e d t o N e w Y or k p h ar m a ci es a n d dis p e ns e d. M alli n c kr o dt m ar k et e d its e xt e nsi v e c at al o g u e of o pi oi ds o n pri c e a n d a v ail a bilit y, i n d u ci n g or d ers wit h r e b at es of u p t o 5 0 % f or hi g h v ol u m e or d ers. 4 8 0. M alli n c kr o dt b uilt o n P ur d u e’s m ar k eti n g t e c h ni q u es b y cr e ati n g n e w fr o nt gr o u ps — t h e ms el v es c o m p os e d of fr o nt gr o u ps— t o a m plif y M alli n c kr o dt’s m ess a gi n g a n d t o c o n vi n c e t h e p u bli c t h at it w as a s o ci all y r es p o nsi bl e c o m p a n y r at h er t h a n j ust a n ot h er gr e e d y p e d dl er of d a n g er o us n ar c oti cs. M alli n c kr o dt’s b usi n ess pl a ns, h o w e v er, t ol d a n ot h er st or y: i n 2 0 1 4, f or e x a m pl e, its fi v e-y e ar pl a n t o ut e d “[ c] o nti n u e d t ot al [ o pi oi d] m ar k et gr o wt h ” as a n o p p ort u nit y, b ut l a b ell e d “[ g] o v er n m e nt a cti o n t o r estri ct a c c ess i n a n eff ort t o r e d u c e a b us e or mis us e ” as a t hr e at. 4 8 1. M alli n c kr o dt’s a p pr o a c h t o t h e o pi oi ds crisis is e x e m plifi e d b y its l e a d ers hi p of o pi oi d m a n uf a ct ur ers’ a n d distri b ut ors’ u ns u c c essf ul b attl e t o d ef e at I-S T O P, t h e l a n d m ar k 2 0 1 2 N e w Y or k l a w t h at cr e at e d a pr es cri pti o n dr u g m o nit ori n g pr o gr a m t o r e d u c e d o ct or-s h o p pi n g a n d r e cl assifi e d h e a vil y a b us e d c o m bi n ati o n h y dr o c o d o ne pr o d u cts fr o m S c h e d ul e III t o S c h e d ul e II t o r e d u c e o v er pr es cri bi n g. M alli n c kr o dt o p p os e d t h es e c o m m o n -s e ns e r ef or ms b e c a us e it s a w r e d u c e d pr es cri bi n g as a t hr e at t o its pr ofits . T h e t h e n h e a d of M alli n c kr o dt’s g e n eri c o pi oi ds di visi o n b o ast e d t o a m aj or c ust o m er — a n e x e c uti v e of a n ati o n al p h ar m a c y c h ai n — t h at M alli n c kr o dt f o u g ht “fr o m c o n c e pti o n ” w h at h e f als el y dis miss e d as a “ p oliti c all y m oti v at e d ” l a w. 1. M alli n c k r o dt’s Misl e a di n g M a r k eti n g t h r o u g h F r o nt G r o u ps a n d B r a n d e d a n d U n b r a n d e d M at e ri als 4 8 2. O n its w e bsit e a n d t hr o u g h ot h er m ar k eti n g c h a n n els, M alli n c kr o dt diss e mi n at e d misl e a di n g m ess a g es a b o ut t h e ris ks a n d b e n efits of o pi oi ds. T h e M alli n c kr o dt P oli c y St at e m e nt o n O pi oi ds, f or e x a m pl e, c alls f or a gr e at er u n d erst a n di n g of t h e o pi oi d i n d ustr y - cr e at e d m yt h of ps e u d o a d di cti o n —i n d ustr y c o d e f or “ o pi oi ds ar e n’t a d di cti v e. ” 131 138 of 258 INDEX NO. 400016/2018 FILED: SUFFOLK COUNTY CLERK 04/11/2019 11:19 AM NYSCEF DOC. NO. 19 4 8 3. RECEIVED NYSCEF: 04/11/2019 V ersi o n D at e d A pr. 1 0, 2 0 1 9 wit h C ert ai n R e d a cti o ns R e m o v e d P er P arti es' A gr e e m e nt M alli n c kr o dt’s br o c h ur e “ Y o ur G ui d e t o T a ki n g O x y c o d o n e S af el y ” d es cri b es t h e si d e eff e cts of o x y c o d o n e b ut o mits m e a ni n gf ul dis c ussi o n of t h e ris ks of a d di cti o n, si m pl y a d visi n g p ati e nts w orri e d a b o ut a d di cti o n t o t al k t o t h eir d o ct or. T h e br o c h ur e als o st at es t h at “ aft er a w hil e, O x y c o d o n e c a us es p h ysi c al d e p e n d e n c e, ” b ut o mits m e nti o n of p h ysi c al d e p e n d e n c e a s a s y m pt o m of a d di cti o n. 4 8 4. M alli n c kr o dt ’s br o c h ur e “E as e y o ur P ai n — a G ui d e t o F e eli n g B ett er ” t o uts t h e b e n efits of o pi oi d m e di c ati o n f or p ai n, wit h o ut m e nti o ni n g a d di cti o n ris k at all: “ B ot h g e n eri c a n d br a n d- n a m e dr u gs c a n h el p c o ntr ol p ai n q ui c kl y a n d eff e cti v el y. ” 4 8 5. M alli n c kr o dt’s w e bsit e cl ai ms, wit h o ut citi n g a n y cli ni c al e vi d e n c e, t h at “[t] h e eff e cti v e p ai n m a n a g e m e nt off er e d b y o ur m e di ci n es h el ps e n a bl e p ati e nts t o st a y i n t h e w or k pl a c e, e nj o y i nt er a cti o ns wit h f a mil y a n d fri e n ds, a n d r e m ai n a n a cti v e m e m b er of s o ci et y. ” 4 8 6. A p o p ul ar w e bsit e f o u n d e d b y M alli n c kr o dt, p ai n-t o pi cs. or g, f e at ur e d m at eri als fr o m t h e A m eri c a n P ai n F o u n d ati o n, r el e ntl essl y o v erst at e d t h e b e n efits a n d mi ni mi z e d t h e ris ks of o pi oi ds, g a v e e xt e nsi v e c o v er a g e t o m a d e -u p p h e n o m e n a s u c h as ps e u d o a d di cti o n a n d o pi o p h o bi a, a n d p e d dl e d bl at a ntl y f als e st at e m e nts s u c h as “t h e cli ni c al b e n efits of o pi oi d tr e at m e nt d w arf t h e cli ni c al ris ks. ” 4 8 7. M alli n c kr o dt als o h as f u n d e d a n d c o ntr oll e d Fr o nt Gr o u ps s u c h as t h e A m eri c a n P ai n F o u n d ati o n, t h e A m eri c a n A c a d e m y of P ai n M e di ci n e/ A m eri c a n P ai n S o ci et y, t h e A c a d e m y of I nt e gr at e d P ai n M e di ci n e, a n d t h e U. S. P ai n F o u n d ati o n. T h es e gr o u ps— t o w hi c h M alli n c kr o dt h as gi v e n m or e t h a n o n e milli o n d oll ars (t h e m aj orit y si n c e 2 0 1 3 ) —h a v e a si n g ul ar a g e n d a: t o d o w n pl a y f e ars a b o ut a d di cti o n s o t h at pr es cri b ers will f e el c o mf ort a bl e pr es cri bi n g hi g h er d os a g es of o pi oi ds. 132 139 of 258 INDEX NO. 400016/2018 FILED: SUFFOLK COUNTY CLERK 04/11/2019 11:19 AM NYSCEF DOC. NO. 19 4 8 8. RECEIVED NYSCEF: 04/11/2019 V ersi o n D at e d A pr. 1 0, 2 0 1 9 wit h C ert ai n R e d a cti o ns R e m o v e d P er P arti es' A gr e e m e nt Aft er 2 0 1 0, t o e x p a n d t h e m ar k et f or its o pi oi ds pr o d u cts, M alli n c kr o dt e m b ar k e d o n a “ c o m pr e h e nsi v e a d v o c a c y pl a n wit h k e y st a k e h ol d ers, ” i n cl u di n g h e alt h c ar e pr o vi d ers a n d r e g ul at ors, b y cr e at i n g a n e w fr o nt gr o u p (its elf m a d e u p of fr o nt gr o u ps) c all e d t h e C. A. R . E. S. ( C oll a b or ati n g a n d A cti n g R es p o nsi bl y t o E ns ur e S af et y) Alli a n c e. 4 8 9. M alli n c kr o dt d es cri b e d t h e C. A. R. E. S. Alli a n c e as “ a c o aliti o n of n ati o n al p ati e nt s af et y, pr o vi d er a n d dr u g di v ersi o n or g a ni z ati o ns t h at ar e f o c us e d o n r e d u ci n g o pi oi d p ai n m e di c ati o n a b us e a n d i n cr e asi n g r es p o nsi bl e pr es cri bi n g h a bits. ” I n r e alit y, t h e C. A. R. E. S. Alli a n c e w as j ust a n ot h er M alli n c kr o dt m ar k eti n g pr oj e ct b uilt o n d e c e pti o n. 4 9 0. T hr o u g h t h e C. A. R. E. S. Alli a n c e, M alli n c kr o dt diss e mi n at e d pr o- o pi oi d m at eri als vi a p ai n or g a ni z ati o n m e eti n gs, gr a n d r o u n ds, di n n er m e eti n gs, r e pri nts, dir e ct m ail, a n d t h e w e b. T h es e eff orts w er e oft e n c o or di n at e d wit h ot h er fr o nt gr o u ps , as w h e n t h e Alli a n c e off er e d t o s e n d d o ct o rs (f or fr e e) t h e A P S/ A A P M Cli ni c al G ui d eli n es f or t h e Us e of C hr o ni c O pi oi d T h er a p y i n C hr o ni c N o n c a n c er P ai n . 4 9 1. M alli n c kr o dt us e d t h e C. A. R. E. S. Alli a n c e t o pr o m ot e a b o o k titl e d D ef e at C hr o ni c P ai n N o w , w hi c h is still a v ail a bl e o nli n e. T h e f als e cl ai ms a n d misr e pr es e nt ati o ns i n t his b o o k i n cl u d e t h e fi cti o n t h at “[ o] nl y r ar el y d o es o pi oi d m e di c ati o n c a us e a tr u e a d di cti o n w h e n pr es cri b e d a p pr o pri at el y t o a c hr o ni c p ai n p ati e nt w h o d o es n ot h a v e a pri or hist or y of a d di cti o n. ” M alli n c kr o dt distri b ut e d c o pi es of t his b o o k a n d t h e O pi oi d S af e Us e a n d H a n dli n g G ui d e ( d es cri b e d b el o w) at t h e n ati o n’s l ar g est c o nf er e n c e f or H C Ps a n d p h ar m a cists wit h a n i nt er est i n p ai n m a n a g e m e nt, wit h m or e t h a n 1, 8 0 0 att e n d e es. 4 9 2. M alli n c kr o dt us e d t h e C. A. R. E. S. Alli a n c e t o pr o m ot e M alli n c kr o dt br a n d e d o pi oi d pr o d u cts, s u c h as w h e n M alli n c kr o dt s o u g ht t o “ g et [t h e E x al g o] n a m e o ut t h er e wit h t h e C. A. R. E. S. Alli a n c e ” b ef or e it b e c a m e p u bli c w h e n t h e c o m p a n y l a u n c h e d its n e w 3 2 m g f or m ul ati o n. ” 133 140 of 258 INDEX NO. 400016/2018 FILED: SUFFOLK COUNTY CLERK 04/11/2019 11:19 AM NYSCEF DOC. NO. 19 4 9 3. RECEIVED NYSCEF: 04/11/2019 V ersi o n D at e d A pr. 1 0, 2 0 1 9 wit h C ert ai n R e d a cti o ns R e m o v e d P er P arti es' A gr e e m e nt M alli n c kr o dt i nstr u ct e d its s al es r e pr es e nt ati v es t o “r e vi e w t h e C. A. R. E. S. Alli a n c e wit h [t h eir] E x al g o p h ysi ci a ns, ” i n cl u di n g t h e O pi oi d S af e Us e a n d H a n dli n g G ui d e , w hi c h , is still a v ail a bl e , c o nt ai n e d n u m er o us misl e a di n g st at e m e nts, i n cl u di n g “[ a] d di cti o n d o es n ot oft e n d e v el o p w h e n t a ki n g o pi oi d p ai n m e di ci n e as pr es cri b e d u n d er t h e g ui d a n c e of a h e alt h c ar e pr o vi d er, b ut it c a n o c c ur. ” T h e g ui d e, w hi c h r ef er e n c e d s p e cifi c o pi oi d dr u gs s u c h as E x al g o, misl e a di n gl y st at e d t h at “[ p] h ysi c al d e p e n d e n c e is n ot t h e s a m e as a d di cti o n ” a n d pr o m ot e d t h e c o n c e pt of ps e u d o a d di cti o n t o p ers u a d e t h e p u bli c t h at o pi oi ds ar e n ot a d di cti v e. 4 9 4. B y 2 0 1 4, M alli n c kr o dt h a d c o n cl u d e d t h at t h e C. A. R. E. S. Alli a n c e w as n ot g e n er ati n g e n o u g h “ c or p or at e g o o d will, ” s o it l a u n c h e d a bi g g er a n d b ett er fr o nt gr o u p, t h e Alli a n c e f or B al a n c e d P ai n M a n a g e m e nt ( “ Af B P M ”). Af B P M i n cl u d es m or e t h a n 2 0 gr o u ps, i n cl u di n g s o m e of t h e m e m b ers of t h e C. A. R. E. S. Alli a n c e. 4 9 5. M alli n c kr o dt hi d fr o m m ost Af B P M m e m b ers t h at its m ai n o bj e cti v e w as t o dr i v e its o pi oi d s al es. I n c o m m u ni c ati o ns wit h t h e fr o nt gr o u p Af P A, h o w e v er, M alli n c kr o dt w as m or e r e v e ali n g a b o ut its tr u e m oti v es. In 2 0 1 5, t h e M alli n c kr o dt e x e c uti v e i n c h ar g e of t h e Af B P M wr ot e t o Bri a n K e n n e d y, a f or m er l o b b yist a n d t h e h e a d of t h e Af P A, r e c o m m e n di n g t h at Af B P M a d dr ess h olisti c m ulti m o d al a n al g esi c ( “ M M A ”) g ui d eli n es t o “t a k e[] s o m e of t h e e d g e off of dri vi n g a n o pi oi d a c c ess m ess a g e. ” 4 9 6. L est s u p p ort f or “ b al a n c e d ” a p pr o a c h es s u c h as M M A g o t o o f ar, h o w e v er, a M alli n c kr o dt e x e c uti v e n ot e d t h at t h e c o m p a n y’s o v er ar c hi n g c o n c er n w as “ a v oi di n g m ess a gi n g t h at o pi oi ds ar e N O T a n a p pr o pri at e t h er a p y. ” 4 9 7. M alli n c kr o dt r et ai n e d a n d p ai d l ar g e s u ms of c o ns ult a nts, a d vis or y b o ar d m e m b ers, r es e ar c h ers, a n d m e m b ers m o n e y t o K O Ls t o s er v e as of its s p e a k ers’ b ur e a u. W e bst er, w h o m M alli n c kr o dt p ai d milli o ns of d oll ars f or r es e ar c h a n d c o ns ulti n g f e es, s er v e d 134 141 of 258 Dr. o n t he INDEX NO. 400016/2018 FILED: SUFFOLK COUNTY CLERK 04/11/2019 11:19 AM NYSCEF DOC. NO. 19 RECEIVED NYSCEF: 04/11/2019 V ersi o n D at e d A pr. 1 0, 2 0 1 9 wit h C ert ai n R e d a cti o ns R e m o v e d P er P arti es' A gr e e m e nt 142 of 258 INDEX NO. 400016/2018 FILED: SUFFOLK COUNTY CLERK 04/11/2019 11:19 AM NYSCEF DOC. NO. 19 RECEIVED NYSCEF: 04/11/2019 V ersi o n D at e d A pr. 1 0, 2 0 1 9 wit h C ert ai n R e d a cti o ns R e m o v e d P er P arti es' A gr e e m e nt M alli n c kr o dt’s N e w Y or k s al es r e pr es e nt ati v es e x h ort e d his t e a m t o “ A T T A C K ” b y g etti n g a c o m mit m e nt f or e a c h pr o d u ct e v er y d a y, t o st a n d i n fr o nt of H C Ps’ d o ors t o g et f a c e ti m e, a n d t o us e fr e e tri al off ers t o e ar n “ bi g b o n us d oll ars. ” M alli n c kr o dt us e d fr e e tri als a n d c o u p o ns e xt e nsi v el y t o st o k e d e m a n d f or its o pi oi d pr o d u cts. 5 0 2. s u p er vis or of M alli n c kr o dt d e pl o y e d t h e s a m e m oti v ati o n al t e c h ni q u es t o s ell X art e mis : t h e M alli n c kr o dt’s N e w Y or k s al es r e pr es e nt ati v es wr ot e t o h er t e a m i n 2 0 1 4 t h at X art e mis “ is t h e B E S T o p p ort u nit y t o m a k e l ots of m o n e y!!! ” 5 0 3. S al es r e pr es e nt ati v es oft e n c o n v e y e d t h e c o m p a n y’s misl e a di n g m ess a g es t o H C Ps d uri n g M alli n c kr o dt -f u n d e d m e als . I n d e e d, th e c o m p a n y s p e nt h e a vil y o n t his m ar k eti n g t a cti c , m a ki n g h u n dr e ds of s u c h p a y m e nts, t ot ali n g al m ost $ 1 6 0, 0 0 0— m u c h of w hi c h w as f or f o o d a n d b e v er a g es —t o N e w Y or k H C Ps fr o m 2 0 1 3 t hr o u g h 2 0 1 6 al o n e. 5 0 4. M alli n c kr o dt als o pr o m ot e d its br a n d e d o pi oi ds t o H C Ps vi a s p e a k er pr o gr a ms. M alli n c kr o dt t y pi c all y hir e d as s p e a k ers H C Ps w h o w er e K O Ls a n d/ or hi g h - v ol u m e pr es cri b ers of its br a n d e d dr u gs, a n d its s al es r e pr es e nt ati v es w er e i nstr u ct e d t o m a k e s ur e t h at as m a n y p ot e nti al pr es cri b ers ( a n d p h ar m a cists) as p ossi bl e att e n d e d. 5 0 5. A m o n g t h e k e y m ess a g es t h at M alli n c kr o dt -p ai d s p e a k ers c o n v e y e d t o H C Ps r e g ar di n g E x al g o w as t h at “j ust b e c a us e it is h y dr o m or p h o n e, t h er e is n o r e as o n t o b e s c ar e d of it. ” Aft er e a c h s p e a k ers’ e v e nt, t h e s al es r e pr es e nt ati v e w h o or g a ni z e d t h e e v e nt w o ul d f oll o w u p wit h e a c h att e n d e e t o e n c o ur a g e m or e pr es cri bi n g of M alli n c kr o dt dr u gs. O n e M alli n c kr o dt s al es r e pr es e nt ati v e c o nt a ct e d H C Ps aft er a w ell -att e n d e d s p e a k ers’ di n n er t o “s e e if t h e y h a v e r e m e m b er e d E x al g o, r e mi n d t h e m of w h at is i m p ort a nt t o t h e m, pr o vi d e c o u p o ns a n d t h e n A S K F O R T H E B U SI N E S S!!! ” 136 143 of 258 INDEX NO. 400016/2018 FILED: SUFFOLK COUNTY CLERK 04/11/2019 11:19 AM NYSCEF DOC. NO. 19 RECEIVED NYSCEF: 04/11/2019 V ersi o n D at e d A pr. 1 0, 2 0 1 9 wit h C ert ai n R e d a cti o ns R e m o v e d P er P arti es' A gr e e m e nt 144 of 258 INDEX NO. 400016/2018 FILED: SUFFOLK COUNTY CLERK 04/11/2019 11:19 AM NYSCEF DOC. NO. 19 RECEIVED NYSCEF: 04/11/2019 V ersi o n D at e d A pr. 1 0, 2 0 1 9 wit h C ert ai n R e d a cti o ns R e m o v e d P er P arti es' A gr e e m e nt tr o u g hs a n d p ot e nti all y diffi c ult t o m a ni p ul at e. ” I n 2 0 1 2, M alli n c kr o dt misl e a di n gl y st ate d t h at “t h e p h ysi c al pr o p erti es of E X A L G O m a y m a k e it diffi c ult t o e xtr a ct t h e a cti v e i n gr e di e nt usi n g c o m m o n f or ms of p h ysi c al a n d c h e mi c al t a m p eri n g, i n cl u di n g c h e wi n g, cr us hi n g a n d diss ol vi n g. ” 5 1 1. M alli n c kr o dt als o m a d e f als e a b us e-d et err e n t cl ai ms a b o ut X art e mis , a dr u g f or w hi c h it pr oj e ct e d a n n u al r e v e n u es of h u n dr e ds of milli o n s of d oll ars a n d c o nsi d er e d t o b e “ a criti c al el e m e nt t o t h e c o nti n u e d s u c c ess of t h e N e w M alli n c kr o dt. ” 5 1 2. M alli n c kr o dt’s m ai n s elli n g p oi nt f or X art e mis — a cl ai m t h at w as r ej e ct ed b y t h e F D A — w as t h at X art e mis is l ess li k el y t o b e a b us e d t h a n ot h er o pi oi ds b e c a us e w h e n t h e dr u g is t a m p er e d wit h, t h e “ mi xi n g of l o n g-a cti n g a n d i m m e di at e r el e as e e x ci pi e nts r es ults i n c o n v ersi o n of dr u g r el e as e t o l o n g- a cti n g, eli mi n ati n g i m m e di at e r e l e as e p h as e of [t h e] dr u g. ” 5 1 3. I n 2 0 1 3, s e v er al m o nt hs b ef or e F D A a p pr o v al of X art e mis, M alli n c kr o dt b e g a n p u bli ci zi n g t h e all e g e d “ a b us e -d et err e nt ” f e at ur es of t h e dr u g, es p e ci all y t hr o u g h K O L Dr. L y n n W e bst er. I n a n i nt er vi e w p u blis h e d o nli n e, Dr. W e bst er st at e d t h at X art e mis “ h as a b us e d et err e nt pr o p erti es w hi c h m e a n t h at t h e n e w d esi g n a n d t e c h n ol o g y wit hi n t his f or m ul ati o n m a y pr e v e nt p e o pl e w h o tr y t o m a ni p ul at e, alt er or c o n v ert t h e e xt e n d e d r el e as e i nt o a n i m m e di at e r el e as e i n or d er t o a c hi e v e a gr e at er hi g h. ” Dr. W e bst er f ail e d t o dis cl os e t h at h e h a d b e e n p ai d milli o ns of d oll ars b y M alli n c kr o dt. 5 1 4. Aft er r e vi e wi n g s ci e ntifi c d at a pr o vi d e d b y M alli n c kr o dt, t h e F D A r ej e ct e d M alli n c kr o dt’s r e q u est f or a b us e -d et err e nt l a b elli n g f or X art e mis, c o n cl u di n g t h at “t h e r es ults of t h e st u di es s u b mitt e d b y [ M alli n c kr o dt] d o n ot m e et t h e st a n d ar ds f or [ a b us e-d et err e nt] l a b eli n g d es cri b e d i n t h e g ui d a n c e, ” a n d t h at “ X art e mis X R is a n e xt e n d e d -r el e as e S c h e d ul e II o pi oi d a n al g esi c wit h n o a b us e- d et err e nt pr o p erti es. ” 138 145 of 258 INDEX NO. 400016/2018 FILED: SUFFOLK COUNTY CLERK 04/11/2019 11:19 AM NYSCEF DOC. NO. 19 5 1 5. RECEIVED NYSCEF: 04/11/2019 V ersi o n D at e d A pr. 1 0, 2 0 1 9 wit h C ert ai n R e d a cti o ns R e m o v e d P er P arti es' A gr e e m e nt In M ar c h 2 0 1 4, s h ortl y aft er t h e F D A’s r el e as e t o M alli n c kr o dt of s ci e ntifi c fi n di n gs e x pl ai ni n g w h y t h e a g e n c y r ej e ct e d a b us e-d et err e nt l a b elli n g f or X art e mis, M alli n c kr o dt i nstr u ct e d c o m p a n y r e pr es e nt ati v es t o t ell t h e m e di a a n d i n v est ors— f als el y— t h at it di d n ot k n o w w h y t h e F D A m a d e its d e cisi o n, a n d t h at M alli n c kr o dt “ c a n n ot s p e c ul at e ” as t o w h y t h e F D A d e ci d e d t o e x cl u d e a b us e- d et err e n c e d at a i n t h e X art e mis l a b el. 5 1 6. N ot wit hst a n di n g t h e F D A’s fi n di n gs, o n or a b o ut M ar c h 1 1, 2 0 1 4, M alli n c kr o dt p ost e d a d o c u m e nt o n its p u bli c w e bsit e f als el y st ati n g t h at X art e mis “ is m or e r esist a nt t o si m pl e s p o o n cr us hi n g c o m p ar e d t o P er c o c et ” a n d t h at “ X A R T E MI S X R h as t e c h n ol o g y t h at r e q uir es a b us ers t o e x ert a d diti o n al eff ort t o e xtr a ct t h e a cti v e i n gr e di e nt fr o m t h e l a r g e q u a ntit y of i n a cti v e a n d d et err e nt i n gr e di e nts. ” 3. M alli n c k r o dt’s F ail u r e t o O pi oi ds 5 1 7. M o nit o r a n d R e p o rt S us pi ci o us O r d e rs of As a n e ntit y r e gist er e d wit h t h e N e w Y or k B ur e a u of N ar c oti cs E nf or c e m e nt ( “B N E ”) a n d t h e D E A as b ot h a m a n uf a ct ur er a n d distri b u t or, M alli n c kr o dt k n e w t h at it w as r e q uir e d t o: ( a) s et u p a s yst e m d esi g n e d t o d et e ct a n d i n v esti g at e s us pi ci o us or d ers of o pi oi ds; ( b) r ef us e t o fill s us pi ci o us or d ers a n d fill or d ers fl a g g e d as p ot e nti all y s us pi ci o us o nl y if, aft er c o n d u cti n g d u e dili g e n c e, it c o ul d d et er mi n e t h at s u c h or d ers w er e n ot li k el y t o b e di v ert e d; a n d ( c) r e p ort all s us pi ci o us or d ers t o D E A a n d B N E. T h es e d u ti es i n cl u d e m o nit ori n g t h e d o w nstr e a m fl o w of o pi oi d pr o d u cts t o d et e ct p ot e nti al di v ersi o n. 5 1 8. At all r el e v a nt ti m es, M al li n c kr o dt p oss ess e d a m pl e s o ur c es of d at a t h at all o we d it t o i d e ntif y s us pi ci o us or d ers of o pi oi ds. F or e x a m pl e, M alli n c kr o dt h a d pr es cri bi n g d at a t h at all o w e d it t o tr a c k H C Ps’ pr es cri bi n g p att er ns o v er ti m e , w hi c h it us e d t o i d e ntif y c a n di d at es t o t ar g et f or m ar k eti n g a n d t o m o nit or its o w n a n d c o m p etit ors’ s al es. M alli n c kr o dt s al es r e pr es e nt ati v es als o r e g ul arl y visit e d p h ar m a ci es a n d H C Ps , w hi c h all o we d t h e m t o o bs er v e r e d 139 146 of 258 INDEX NO. 400016/2018 FILED: SUFFOLK COUNTY CLERK 04/11/2019 11:19 AM NYSCEF DOC. NO. 19 RECEIVED NYSCEF: 04/11/2019 V ersi o n D at e d A pr. 1 0, 2 0 1 9 wit h C ert ai n R e d a cti o ns R e m o v e d P er P arti es' A gr e e m e nt 147 of 258 INDEX NO. 400016/2018 FILED: SUFFOLK COUNTY CLERK 04/11/2019 11:19 AM NYSCEF DOC. NO. 19 5 2 2. RECEIVED NYSCEF: 04/11/2019 V ersi o n D at e d A pr. 1 0, 2 0 1 9 wit h C ert ai n R e d a cti o ns R e m o v e d P er P arti es' A gr e e m e nt F r o m 2 0 0 8 t hr o u g h 2 0 1 0, M alli n c kr o dt di d n ot r e p ort a si n gl e s us pi ci o us or d er t o t h e D E A, a n d f ail e d t o r e p ort a n y s us pi ci o us or d ers t o B N E fr o m A u g ust 2 0 1 3 t hr o u g h 2 0 1 7. 5 2 3. B y J ul y 2 0 1 0 at t h e l at est, M alli n c kr o dt k n e w t h at its o pi oi ds w er e wi d el y di v ert e d a cr oss t h e U nit e d St at es. 1 0 8 I n f a ct, t h e D E A h a d i d e ntifi e d t h e c o m p a n y as “t h e ki n g pi n wit hi n t h e dr u g c art el ” a n d as a n d s u p pli er t o r o g u e distri b ut ors w h os e li c e ns es t h e D E A h a d r e v o k e d. T h e D E A s h o w e d M alli n c kr o dt t h e f oll o wi n g p h ot o of a p h ar m a c y li k el y e n g a g e d i n di v ersi o n d u e t o n u m er o us r e d fl a gs, i n cl u di n g a si g n r e q uiri n g c as h p a y m e nt f or t h e c o m p a n y’s R o xi c o d o n e pr o d u cts: L e n n y B er nst ei n & S c ott Hi g h a m, T h e G o v er n m e nt’s Str u g gl e t o H ol d O pi oi d M a n uf a ct ur ers A c c o u nt a bl e , W as h. P ost, A pr. 2, 2 0 1 7, a v ail a bl e at htt ps:// w w w. w as hi n gt o n p ost. c o m/ gr a p hi cs/i n v esti g ati o ns/ d e a m alli n c kr o dt/ ? n or e dir e ct = o n & ut m _t er m =. 7 4f 8 e 4 4 b 8 d 4 8. 108 141 148 of 258 INDEX NO. 400016/2018 FILED: SUFFOLK COUNTY CLERK 04/11/2019 11:19 AM NYSCEF DOC. NO. 19 5 2 4. RECEIVED NYSCEF: 04/11/2019 V ersi o n D at e d A pr. 1 0, 2 0 1 9 wit h C ert ai n R e d a cti o ns R e m o v e d P er P arti es' A gr e e m e nt M alli n c kr o dt’s i nt er n al r e vi e ws of p e c uli ar or d er r e p orts w er e c urs or y a n d p o orl y d o c u m e nt e d: s o m e w er e cl e ar e d wit h j ust t h e n ot ati o n “ o k. ” M alli n c kr o dt st aff, its fr o nt li n e a g ai nst di v ersi o n, r o uti n el y w e nt t hr o u g h t h e m oti o ns a n d r u b b er -st a m p e d or d ers, i n cl u di n g v er y l ar g e o n es. F or e x a m pl e, 5 2 5. O n t h e v er y r ar e o c c asi o ns w h e n t h e c o m p a n y el e v at e d or d ers t o s us pi ci o us a n d bl o c k e d c ust o m ers, M alli n c kr o dt c o nti n u e d t o s hi p t h e m o pi oi ds. F or e x a m pl e, M alli n c kr o dt s hi p p e d f e nt a n yl p at c h es a n d m or p hi n e s ulf at e t o a distri b ut or aft er t h e or d er w as s u p p os e d t o b e bl o c k e d, l e a di n g a st aff m e m b er t o a d mit: “ T his r e v e als a cl e ar g a p i n o ur pr o c ess. ” 142 149 of 258 INDEX NO. 400016/2018 FILED: SUFFOLK COUNTY CLERK 04/11/2019 11:19 AM NYSCEF DOC. NO. 19 RECEIVED NYSCEF: 04/11/2019 V ersi o n D at e d A pr. 1 0, 2 0 1 9 wit h C ert ai n R e d a cti o ns R e m o v e d P er P arti es' A gr e e m e nt 150 of 258 INDEX NO. 400016/2018 FILED: SUFFOLK COUNTY CLERK 04/11/2019 11:19 AM NYSCEF DOC. NO. 19 RECEIVED NYSCEF: 04/11/2019 V ersi o n D at e d A pr. 1 0, 2 0 1 9 wit h C ert ai n R e d a cti o ns R e m o v e d P er P arti es' A gr e e m e nt d es pit e p o ss essi n g d et ail e d i nf or m ati o n a b o ut p h ar m a ci es i n di c ati n g p ot e nti al r e d fl a gs of di v ersi o n s u c h as hi g h r ati os of c o ntr oll e d s u bst a n c es dis p e ns e d, hi g h c as h -p a y r ati os, a n d e x c essi v e pr es cri b ers, M alli n c kr o dt di d n ot st o p s hi p m e nts it k n e w w er e d esti n e d f o r N e w Y or k p h ar m a ci es t h at w er e li k el y e n g a g e d i n di v ersi o n. 5 3 1. F or e x a m pl e, M alli n c kr o dt r e c ei v e d a r e p ort o n P h ar m a c y A, w hi c h n ot e d t h at 6 6 p er c e nt of t h e dr u gs t his L o n g Isl a n d p h ar m a c y dis p e ns e d w er e c o ntr oll e d s u bst a n c es. M alli n c kr o dt als o k n e w t h at t h e p h ar m a c y’s t o p pr es cri b er of o x y c o d o n e pills p ai d f or i n c as h w as a d o ct or w h o h a d a l o n g hist or y of dis ci pli n ar y a cti o n a n d w h os e offi c e w as r ai d e d b y t h e D E A i n N o v e m b er 2 0 1 1, a n d w h o w as arr est e d i n 2 0 1 2 a n d c h ar g e d wit h ill e g al distri b uti o n of n ar c ot i cs. T his p h ar m a c y’s s e c o n d l ar g e st pr es cri b er of o x y c o d o n e w as a n ot h er d o ct or w h os e pr es cri pti o ns t h e p h ar m a c y c o nti n u e d t o fill u ntil s h ortl y b ef or e h e w as arr est e d i n J u n e 2 0 1 2 f or ill e g al distri b uti o n of n ar c oti cs. M alli n c kr o dt di d n ot hi n g t o r estri ct c h ar g e b a c ks or li mit s hi p m e nts of o pi oi ds t o t h at p h ar m a c y. 5 3 2. Wit h r es p e ct t o t h e ti n y n u m b er of N e w Y or k p h ar m a ci es f or w hi c h M alli n c kr o dt di d r estri ct c h ar g e b a c ks, it di d s o l o n g aft er l e ar ni n g t h at t h e y h a d e n g a g e d i n di v ersi o n b y filli n g pr es cri pti o ns of s us p e ct H C Ps. F or e x a m pl e, M alli n c kr o dt d el a y e d r estri cti n g c h ar g e b a c ks o n s hi p m e nts t o t h e f oll o wi n g p h ar m a ci es: • P h ar m a c y B: A r e p ort o n t his M a n h att a n p h ar m a c y n ot e d t h at 5 3 % of pr es cri pti o n dr u g s al es w er e f or c o ntr oll e d s u bst a n c es a n d t h at t h e p h ar m a cist r e p ort e d t h at s h e tr ai n e d u n d er a n o pi oi ds K O L a n d t h er ef or e, “s h e d o es n ot b eli e v e hi g h d os es of n ar c oti cs t o tr e at p ai n is u n us u al. ” T h e r e p ort als o n ot e d s us pi ci o us pr es cri b ers, i n cl u di n g Dr. D a nt e C u b a n g b a n g, w h o w as l at er i n di ct e d f or ill e g al pr es cri bi n g of o pi oi ds. • P h ar m a c y C: A r e p ort o n t his M a n h att a n p h ar m a c y n ot e d t h at a t o p pr es cri b er w as all o wi n g his p h ysi ci a ns’ assist a nts t o us e his D E A n u m b er, w hi c h, t h e r e p ort o bs er v e d, is “ a g ai nst t h e l a w. ” • P h ar m a c y D: A r e p ort o n t his St at e n Isl a n d p h ar m a c y n ot e d t h at 6 4 % of pr es cri pti o n dr u g s al es w er e f or c o ntr oll e d s u bst a n c es, a n d t h e p h ar m a c y fill e d 144 151 of 258 INDEX NO. 400016/2018 FILED: SUFFOLK COUNTY CLERK 04/11/2019 11:19 AM NYSCEF DOC. NO. 19 RECEIVED NYSCEF: 04/11/2019 V ersi o n D at e d A pr. 1 0, 2 0 1 9 wit h C ert ai n R e d a cti o ns R e m o v e d P er P arti es' A gr e e m e nt 152 of 258 INDEX NO. 400016/2018 FILED: SUFFOLK COUNTY CLERK 04/11/2019 11:19 AM NYSCEF DOC. NO. 19 RECEIVED NYSCEF: 04/11/2019 V ersi o n D at e d A pr. 1 0, 2 0 1 9 wit h C ert ai n R e d a cti o ns R e m o v e d P er P arti es' A gr e e m e nt 153 of 258 FILED: SUFFOLK COUNTY CLERK 04/11/2019 11:19 AM NYSCEF DOC. NO. 19 INDEX NO. 400016/2018 RECEIVED NYSCEF: 04/11/2019 154 of 258 INDEX NO. 400016/2018 FILED: SUFFOLK COUNTY CLERK 04/11/2019 11:19 AM NYSCEF DOC. NO. 19 RECEIVED NYSCEF: 04/11/2019 V ersi o n D at e d A pr. 1 0, 2 0 1 9 wit h C ert ai n R e d a cti o ns R e m o v e d P er P arti es' A gr e e m e nt $ 3 billi o n i n 2 0 1 2, r e pr es e nti n g o v er 1 0 p er c e nt of E n d o’s t ot al r e v e n u e. E n d o’s br a n d e d O p a n a E R li n e pr o d u c e d r e v e n u e of $ 1. 1 5 billi o n fr o m 2 0 1 0 t o 2 0 1 3. E n d o als o m a n uf a ct ur es an d s ells g e n eri c o pi oi ds, b ot h dir e ctl y a n d t hr o u g h its s u bsi di ari es, P ar P h ar m a c e uti c al a n d Q u alit est P h ar m a c e uti c als, I n c., i n cl u di n g g e n eri c o x y c o d o n e, o x y m or p h o n e, h y dr o m or p h o n e, a n d h y dr o c o d o n e pr o d u cts. 5 4 4. E n d o’s q u art erl y pr o m oti o n al s p e n di n g i n cr e as e d fr o m t h e $ 2 milli o n t o $ 4 milli o n r a n g e i n 2 0 0 0 t o 2 0 0 4 t o m or e t h a n $ 1 0 milli o n f oll o wi n g t h e l a u n c h of O p a n a E R i n mi d - 2 0 0 6 ( a n d m or e t h a n $ 3 8 milli o n f or t h e y e ar i n 2 0 0 7). W h e n it l a u n c h e d t h e r ef or m ul at e d v ersi o n of O p a n a i n 2 0 1 2, E n d o’s q u art erl y s p e n di n g w as m or e t h a n $ 8 milli o n ( a n d n e arl y $ 3 4 milli o n f or t h e y e ar). 5 4 5. I n t h e first q u art er of 2 0 1 0 al o n e, E n d o’s s al es r e pr es e nt ati v es m a d e n e arl y 7 2, 0 0 0 visits t o pr es cri b ers n ati o n wi d e t o d et ail O p a n a E R. Fr o m 2 0 0 9 t hr o u g h 2 0 1 3, E n d o d et ail e d its s al es r e pr es e nt ati v es t o N e w Y or k pr o vi d ers o n o v er 1 6 4, 0 0 0 o c c asi o ns . E n d o i m pr o p erl y i nstr u ct e d t h es e s al es r e pr es e nt ati v es t o di mi nis h a n d dist ort t h e ris k of a d di cti o n ass o ci at e d wit h o pi oi ds a n d O p a n a E R. E n d o’s tr ai ni n g m at eri als f or its s al es r e pr es e nt ati v es i n 2 0 1 1, f or e x a m pl e, pr o m pt e d s al es r e pr es e nt ati v es t o a ns w er “tr u e ” t o t h e st at e m e nt t h at a d di cti o n t o o pi oi ds is n ot c o m m o n. 5 4 6. O n e of t h e Fr o nt Gr o u ps wit h w hi c h E n d o w or k e d m ost cl os el y w as t h e A m eri c a n P ai n F o u n d ati o n ( “ A P F ”). E n d o f u n d e d, pr o vi d e d s u bst a nti al assist a n c e t o, a n d d e v el o p e d a n d e x er cis e d e dit ori al c o ntr ol o v er, t h e d e c e pti v e a n d misl e a di n g m ess a g es t h at A P F c o n v e y e d t hr o u g h its N ati o n al I niti ati v e o n P ai n C o ntr ol ( “ NI P C ”) a n d its w e bsit e w w w. p ai n k n o wl e d g e. c o m . E n d o pr o vi d e d s u bst a nti al fi n a n ci al s u p p ort t o N PI C a n d s el e ct e d A P F t o m a n a g e N PI C, e v e n as E n d o o bs c ur e d its i n v ol v e m e nt wit h NI P C. 148 155 of 258 INDEX NO. 400016/2018 FILED: SUFFOLK COUNTY CLERK 04/11/2019 11:19 AM NYSCEF DOC. NO. 19 5 4 7. RECEIVED NYSCEF: 04/11/2019 V ersi o n D at e d A pr. 1 0, 2 0 1 9 wit h C ert ai n R e d a cti o ns R e m o v e d P er P arti es' A gr e e m e nt E n d o m a d e n u m er o us f als e r e pr es e nt ati o ns r e g ar di n g a d di cti o n t hr o u g h N PI C a n d p ai n k n o wl e d g e. c o m. NI P C a n d t h e p ai n k n o wl e d g e. c o m cl ai m e d, f or e x a m pl e, t h at “[ p] e o pl e w h o t a k e o pi oi ds as pr es cri b e d us u all y d o n ot b e c o m e a d di ct e d. ” 5 4 8. A br o c h ur e a v ail a bl e o n p ai n k n o wl e d g e. c o m titl e d “ P ai n: O pi oi d F a cts ” st at e d t h at “ p e o pl e w h o h a v e n o hist or y of dr u g a b us e, i n cl u di n g t o b a c c o, a n d us e t h eir o pi oi d m e di c ati o n as dir e ct e d will pr o b a bl y n ot b e c o m e a d di ct e d. ” E n d o r e p e at e d t his d e c e pti v e m ess a g e i n n u m er o us ot h er p ati e nt m at eri als. 5 4 9. Als o p ost e d o n p ai n k n o wl e d g e. c o m w as a p ati e nt e d u c ati o n g ui d e e ntitl e d “ P ai n : O pi oi d T h er a p y , ” w hi c h o mitt e d t h e m at eri al f a ct t h at a d di cti o n w as o n e of t h e “ c o m m o n ris ks ” of o pi oi ds, as s h o w n b el o w: 5 5 0. P ai n k n o wl e d g e. c o m als o f als el y cl ai m e d t h at wit h o pi oi ds, “ y o ur l e v el of f u n cti o n s h o ul d i m pr o v e; y o u m a y fi n d y o u ar e n o w a bl e t o p arti ci p at e i n a cti viti es of d ail y li vi n g, s u c h as w or k a n d h o b bi es, t h at y o u w er e n ot a bl e t o e nj o y w h e n y o ur p ai n w as w ors e. ” I n a d diti o n t o “i m pr o v e d f u n cti o n, ” t h e w e bsit e misl e a di n gl y t o ut e d i m pr o v e d q u alit y of lif e as a b e n efit of o pi oi d t h er a p y. T h e gr a nt r e q u est t h at E n d o a p pr o v e d f or t his pr oj e ct s p e cifi c all y i n di c at e d NI P C’s i nt e nt t o m a k e cl ai ms of f u n cti o n al i m pr o v e m e nt. 149 156 of 258 INDEX NO. 400016/2018 FILED: SUFFOLK COUNTY CLERK 04/11/2019 11:19 AM NYSCEF DOC. NO. 19 5 5 1. RECEIVED NYSCEF: 04/11/2019 V ersi o n D at e d A pr. 1 0, 2 0 1 9 wit h C ert ai n R e d a cti o ns R e m o v e d P er P arti es' A gr e e m e nt E n d o pr oj e ct e d t h at it w o ul d b e a bl e t o r e a c h t e ns of t h o us a n ds of pr es cri b ers n ati o n wi d e t hr o u g h t h e distri b uti o n of NI P C m at eri als. By S e pt e m b er 1 4, 2 0 1 0, p ai n k n o wl e d g e. c o m h a d 1 0, 4 2 6 r e gistr a nts, 8 6, 8 8 1 visits, 6 0, 0 1 0 visit ors, a n d 3 6 4, 2 4 1 p a g e vi e ws. 5 5 2. A n ot h er NI P C i niti ati v e t h at E n d o s p o ns or e d w as a s eri es of C M Es titl e d P ersist e nt P ai n i n t h e Ol d er P ati e nt , w hi c h misl e a di n gl y cl ai m e d t h at c hr o ni c o pi oi d t h er a p y h as b e e n “s h o w n t o r e d u c e p ai n a n d i m pr o v e d e pr essi v e s y m pt o ms a n d c o g niti v e f u n cti o ni n g. ” T h e C M E w as a v ail a bl e vi a w e b c ast t o N e w Y or k p h ysi ci a ns. 5 5 3. E n d o c o m missi o n e d a s u p pl e m e nt a v ail a bl e f or C M E cr e dit i n t h e J o ur n al of F a mil y Pr a cti c e c all e d “ P ai n M a n a g e m e nt Dil e m m as i n Pri m ar y C ar e: Us e of O pi oi ds , ” i n w hi c h it d e c e pti v el y mi ni mi z e d t h e ris k of a d di cti o n b y e m p h asi zi n g t h e eff e cti v e n ess of ris k s cr e e ni n g t o ols, f als el y cl ai mi n g t h at wit h t h e us e of s u c h t o ols, e v e n p ati e nts at hi g h ris k of a d di cti o n c o ul d s af el y r e c ei v e c hr o ni c o pi oi d t h er a p y. E n d o distri b ut e d 9 6, 0 0 0 c o pi es of t his C M E n at i o n wi d e, i n cl u di n g t o pr es cri b ers wit hi n N e w Y or k. 5 5 4. E n d o c o -s p o ns or e d a n d distri b ut e d c o pi es of t h e F S M B’s R es p o nsi bl e O pi oi d Pr es cri bi n g , w hi c h t a u g ht t h at b e h a vi ors s u c h as “r e q u esti n g dr u gs b y n a m e, ” “ d e m a n di n g or m a ni p ul ati v e b e h a vi or, ” s e ei n g m or e t h a n o n e d o ct or t o o bt ai n o pi oi ds, a n d h o ar di n g, w hi c h ar e si g ns of g e n ui n e a d di cti o n, w er e all r e all y si g ns of “ ps e u d o a d di cti o n. ” 5 5 5. I n a p ati e nt e d u c ati o n p a m p hl et titl e d “U n d erst a n di n g Y o ur P ai n: T a ki n g Or al O pi oi d A n al g esi cs , ” E n d o d e c e pti v el y mi ni mi z e d t h e ris ks of a d di cti o n b y st ati n g, “[ a] d di cts t a k e o pi oi ds f or ot h er r e as o ns, s u c h as u n b e ar a bl e e m oti o n al pr o bl e ms. T a ki n g o pi oi ds as pr es cri b e d f or p ai n r eli ef is n ot a d di cti o n. ” N e w Y or k ers c a n still a c c ess t his p u bli c ati o n o nli n e. 5 5 6. E n d o s p o ns or e d a n d distri b ut e d i n N e w Y or k a n arti cl e p u blis h e d i n P ai n M e di ci n e N e ws , e ntitl e d “ C as e C h all e n g es i n P ai n M a n a g e m e nt: O pi oi d T h er a p y f or C hr o ni c P ai n. ” 150 157 of 258 T he INDEX NO. 400016/2018 FILED: SUFFOLK COUNTY CLERK 04/11/2019 11:19 AM NYSCEF DOC. NO. 19 RECEIVED NYSCEF: 04/11/2019 V ersi o n D at e d A pr. 1 0, 2 0 1 9 wit h C ert ai n R e d a cti o ns R e m o v e d P er P arti es' A gr e e m e nt arti cl e ass ert e d t h at “ [ o]pi oi ds r e pr es e nt a hi g hl y eff e cti v e b ut c o ntr o v ersi al a n d oft e n mis u n d erst o o d cl ass of a n al g esi c m e di c ati o ns, ” a n d t h e n f o c us e d o n a n d e m p h asi z e d t h e ris ks of e xt e n d e d us e of N S AI Ds as a n alt er n ati v e t o o pi oi ds, b ut o mitt e d t h e s a m e d et ail c o n c er ni n g t h e s eri o us si d e eff e cts ass o ci at e d wit h o pi oi ds. E n d o distri b ut e d t h e p u bli c ati o n t o 1 1 6, 0 0 0 pr es cri b ers i n 2 0 0 7, i n cl u di n g pri m ar y c ar e p h ysi ci a ns. 5 5 7. E n d o distri b ut e d or f a cilit at e d t h e distri b uti o n of t h es e m ess a g es wit h t h e i nt e nt t h at pr es cri b ers a n d c o ns u m ers i n N e w Y or k a n d els e w h er e w o ul d r el y o n t h e m i n c h o osi n g t o us e o pi oi ds, a n d E n d o’s o pi oi ds i n p arti c ul ar, t o tr e at c hr o ni c p ai n. E n d o tr a c k e d t h e br e a dt h a n d d e pt h of its m ar k eti n g a n d m ess a gi n g eff orts, a n d c o nfir m e d t h at its m ar k eti n g eff orts w er e tr a nsl ati n g dir e ctl y i nt o i n cr e as e d pr es cri pti o ns f or its o pi oi ds . 5 5 8. T h e F D A r e q u est e d t h at E n d o r e m o v e O p a n a E R fr o m t h e m ar k et i n J u n e 2 0 1 7 d u e t o its ris k of a b us e. T h e pr o d u ct w as r e m o v e d i n J ul y 2 0 1 7. 2. N e w Y o r k’s S ettl e m e nt wit h E n d o 5 5 9. I n M ar c h 2 0 1 6, t h e O A G cl os e d a n i n v esti g ati o n a n d e nt er e d i nt o a n Ass ur a n c e of Dis c o nti n u a n c e (t h e “ E n d o A O D ”) wit h E n d o H e alt h S ol uti o ns I n c. a n d E n d o P h ar m a c e uti c als I n c. T h e E n d o A O D c o v er e d c ert ai n misr e pr es e nt ati o ns t h at t h e O A G all e g e d t h at E n d o h ad m a d e r e g ar di n g O p a n a E R, a n d t h e c o m p a n y’s f ail ur e t o pr e v e nt its s al es st aff fr o m d et aili n g pr o vi d ers w h o m a y h a v e b e e n i n v ol v e d i n t h e a b us e a n d ill e g al di v ersi o n of o pi oi ds. T h e A O D c o v er e d t h e f oll o wi n g s p e cifi c c o n d u ct: • E n d o’s m ar k eti n g of r ef or m ul at e d O p a n a E R as “ d esi g n e d t o b e cr us h r esist a nt ”; • A st at e m e nt o n w w w. o p a n a. c o m t h at p ati e nts w h o t a k e O p a n a E R “ us u all y d o n ot b e c o m e a d di ct e d ” ; • E n d o’s us e of t h e t er m “ ps e u d o a d di cti o n ” i n c ert ai n tr ai ni n g m at eri als f or its s al es r e pr es e nt ati v es; • St at e m e nts Endo m a d e i n c ert ai n m ar k eti n g 151 158 of 258 m at eri als a n d b y E n d o’s s al es FILED: SUFFOLK COUNTY CLERK 04/11/2019 11:19 AM NYSCEF DOC. NO. 19 INDEX NO. 400016/2018 RECEIVED NYSCEF: 04/11/2019 159 of 258 INDEX NO. 400016/2018 FILED: SUFFOLK COUNTY CLERK 04/11/2019 11:19 AM NYSCEF DOC. NO. 19 5 6 3. RECEIVED NYSCEF: 04/11/2019 V ersi o n D at e d A pr. 1 0, 2 0 1 9 wit h C ert ai n R e d a cti o ns R e m o v e d P er P arti es' A gr e e m e nt T e v a’s a n n u al pr o m oti o n al s p e n di n g o n o pi oi ds st e a dil y cli m b e d fr o m u n d er $ 4 milli o n i n 2 0 0 0 t o m or e t h a n $ 1 3 milli o n i n 2 0 1 4, i n cl u di n g a p e a k, c oi n ci di n g wit h t h e l a u n c h of F e nt or a, of m or e t h a n $ 2 7 milli o n i n 2 0 0 7. 5 6 4. T e v a’s br a n d e d o pi oi d pr o d u cts , A cti q a n d F e nt or a, ar e e xtr e m el y p o w erf ul a n d d a n g er o us r a pi d o ns et f e nt a n yl dr u gs— u p t o 1 0 0 ti m es str o n g er t h a n m or p hi n e — a n d a p pr o v e d o nl y f or t h e tr e at m e nt of “ br e a kt hr o u g h ” c a n c er p ai n i n p ati e nts. M or e o v er, t h e dr u gs ar e a p pr o v e d f or us e o nl y b y c a n c er p ati e nts w h o ar e alr e a d y r e c ei vi n g a n d w h o ar e t ol er a nt t o ar o u n d -t h e-cl o c k o pi oi ds f or t h eir u n d erl yi n g c a n c er p ai n. A cti q a n d F e nt or a c arr y t h e stri ct est w ar ni n g r e q uir e d b y t h e F D A, w hi c h i n cl u d es i nf or m ati o n a b o ut t h e ris k of f at al r es pir at or y d e pr essi o n w h e n us e d b y n o n- o pi oi d t ol er a nt p ati e nts. 5 6 5. D es pit e t h e p ot e nti all y f at al c o ns e q u e n c es of i n a p pr o pri at el y pr es cri bi n g t h es e f e nt a n yl-b as e d dr u gs, T e v a d e pl o y e d its s al es f or c e t o pr o m ot e t h e dr u gs off -l a b el i n N e w Y or k, b e y o n d t h e p ati e nt t y p es a n d i n di c ati o ns f or w hi c h t h e y w er e a p pr o v e d, i n or d er t o cl ai m its pi e c e of t h e br o a d er c hr o ni c n o n -c a n c er p ai n m ar k et. T his c a m p ai g n w as d e c e pti v e b e c a us e it r e pr es e nt e d t h at A cti q a n d F e nt or a w er e s af e, eff e cti v e, a n d a p pr o v e d f or p ati e nts a n d us es f or w hic h t h e y w er e n ot. 5 6 6. T e v a als o pr o m ot e d off -l a b el t hr o u g h Fr o nt Gr o u ps a n d K O Ls. F or e x a m pl e, at a n A A P M a n n u al m e eti n g h el d i n F e br u ar y 2 0 0 6, T e v a s p o ns or e d a pr es e nt ati o n b y Dr. W e bst er a n d ot h ers t h at p ur p ort e d t o s h o w g o o d s af et y r es ults fr o m f e nt a n yl b u c c al t a bl ets i n p ati e nts wit h c hr o ni c p ai n a n d “ br e a kt hr o u g h p ai n. ” At t h e ti m e, h o w e v er, T e v a’s pr o d u ct w as t h e o nl y f e nt a n yl b u c c al t a bl et o n t h e m ar k et. B e c a us e t h e dr u g w as n ot a p pr o v e d f or c hr o ni c p ai n a n d n o n -c a n c er br e a kt hr o u g h p ai n, t h e C M E w as n ot hi n g b ut t hi nl y v eil e d d e c e pti v e off-l a b el pr o m oti o n. 153 160 of 258 INDEX NO. 400016/2018 FILED: SUFFOLK COUNTY CLERK 04/11/2019 11:19 AM NYSCEF DOC. NO. 19 5 6 7. RECEIVED NYSCEF: 04/11/2019 V ersi o n D at e d A pr. 1 0, 2 0 1 9 wit h C ert ai n R e d a cti o ns R e m o v e d P er P arti es' A gr e e m e nt A T e v a e x e c uti v e e x pli citl y a c k n o wl e d g e d t h at if T e v a w er e a bl e t o e x p a n d its a p pr o v e d i n di c ati o ns, “t h e o p p ort u nit y t h at F e nt or a r epr es e nts is e n or m o us. ” T e v a di d i n f a ct s e e k F D A a p pr o v al f or a br o a d er i n di c ati o n f or F e nt or a i n 2 0 0 8, b ut di d n ot r e c ei v e it. N e v ert h el ess, it c o nti n u e d its r el e ntl ess p urs uit of s al es a n d pr ofits, disr e g ar di n g t h e s af et y of N e w Y or k ers. 5 6 8. I n d e e d, T e v a e m pl o y e d its d e c e pti v e a n d d a n g er o us m ar k eti n g str at e g y d es pit e k n o wi n g t h at p e o pl e w er e d yi n g w h e n t a ki n g t h es e p o w erf ul f e nt a n yl dr u gs. 5 6 9. I n S e pt e m b er 2 0 0 8, T e v a p ai d a $ 4 2 5 milli o n f e d er al fi n e t o r es ol v e all e g ati o ns of off -l a b el m ar k eti n g of A cti q, b e c a us e T e v a pr o m ot e d t h e dr u g f or n o n-c a n c er p ati e nts, a n d f or p ati e nts w h o w er e n ot o pi oi d t ol er a nt. 5 7 0. U n d et err e d, T e v a c o nti n u e d its d e c e pti v e m ar k eti n g of o pi oi ds. I n 2 0 0 9, it r e c ei v e d a w ar ni n g l ett er fr o m t h e F D A t h at its m at eri als f or F e nt or a w er e d e c e pti v e b e c a us e t h e y br o a d e n e d t h e i n di c ati o n f or t h e dr u g b e y o n d c a n c er p ati e nts wit h br e a kt hr o u g h p ai n. 5 7 1. D es pit e t h e r e p e at e d w ar ni n gs of t h e d a n g ers ass o ci at e d wit h t h e us e of t h e dr u gs b e y o n d t h eir li mit e d i n di c ati o n, i n 2 0 1 2, T e v a p u blis h e d a n i ns ert i n P h ar m a c y Ti m es r e g ar di n g A cti q a n d F e nt or a. T h e first s e nt e n c e of t h e i ns ert st at es: “It is w ell r e c o g ni z e d t h at t h e j u di ci o us us e of o pi oi ds c a n f a cilit at e eff e cti v e a n d s af e m a n a g e m e nt of c hr o ni c p ai n. ” 5 7 2. T e v a p ai d t o h a v e a C M E it s p o ns or e d, O pi oi d- B as e d M a n a g e m e nt of P ersist e nt a n d Br e a kt hr o u g h P ai n , p u blis h e d i n a s u p pl em e nt of P ai n M e di ci n e N e ws. It is still a v ail a bl e o nli n e t o N e w Y or k ers a n d n ati o n wi d e. T h e C M E i nstr u ct e d d o ct ors t h at “ cli ni c all y, br o a d cl assifi c ati o n of p ai n s y n dr o m es as eit h er c a n c er - or n o n c a n c er -r el at e d h as li mit e d utilit y ” a n d r e c o m m e n d e d A cti q a n d F e nt or a f or p ati e nts wit h c hr o ni c p ai n. 154 161 of 258 INDEX NO. 400016/2018 FILED: SUFFOLK COUNTY CLERK 04/11/2019 11:19 AM NYSCEF DOC. NO. 19 5 7 3. RECEIVED NYSCEF: 04/11/2019 V ersi o n D at e d A pr. 1 0, 2 0 1 9 wit h C ert ai n R e d a cti o ns R e m o v e d P er P arti es' A gr e e m e nt T e v a tr a c k e d its pr es cri pti o ns a n d w as w ell a w ar e t h at its dr u gs w er e b ei n g writt e n off -l a b el, as w as i nt e n d e d b y its pr o m oti o n of t h e dr u gs. T h e c o m p a n y’s s al es i n cr e as e d e x p o n e nti all y t hr o u g h o ut t h e p eri o d it d et ail e d its dr u gs. 2. T e v a’s Mis r e p r es e nt ati o ns R e g a r di n g O pi oi ds 5 7 4. T e v a’s d e c e pti v e c o n d u ct i n m ar k eti n g A cti q a n d F e nt or a w as a n e xt e nsi o n of, a n d r e a p e d t h e b e n efits of, T e v a’s g e n er all y d e c e pti v e pr o m oti o n of o pi oi ds f or c hr o ni c p ai n i n N e w Y or k . 5 7 5. Li k e t h e ot h er M a n uf a ct ur er D ef e n d a nts , T e v a dir e ctl y e n g a g e d i n misl e a di n g a n d d e c e pti v e m ar k eti n g of o pi oi ds t hr o u g h n ot o nl y its s al es f or c e, b ut als o usi n g Fr o nt Gr o u ps, p h ysi ci a n s p e a k ers, pr o m oti o n al m at eri als, K O Ls, a n d C M Es. T hr o u g h t h es e v e hi cl es, T e v a i nt e nti o n all y misr e pr es e nt e d t h e ris k of a d di cti o n as m o d est, m a n a g e a bl e, a n d o ut w ei g h e d b y t h e b e n efits of o pi oi d us e. 5 7 6. F or e x a m pl e, T e v a s p o ns or e d a n d f a cilit at e d t h e d e v el o p m e nt of a g ui d e b o o k, O pi oi d M e di c ati o ns a n d R E M S: A P ati e nt’s G ui d e , w hi c h i n cl ud e d misl e a di n g cl ai ms t h at “ p ati e nts wit h o ut a hist or y of a b us e or a f a mil y hist or y of a b us e d o n ot c o m m o nl y b e c o m e a d di ct e d t o o pi oi ds. ” 5 7 7. T e v a s p o ns or e d A P F’s Tr e at m e nt O pti o ns: A G ui d e f or P e o pl e Li vi n g wit h P ai n , w hi c h i n cl u d e d n u m er o us f als e or misl e a di n g st at e m e nts, i n cl u di n g t h at o pi oi ds h a v e “ n o c eili n g d os e ” a n d t h er ef or e ar e s af er t h a n N S AI Ds. It als o t a u g ht t h at a d di cti o n is r ar e a n d i n v ol v es u n a ut h ori z e d d os e es c al ati o ns, o bt ai ni n g o pi oi ds fr o m m ulti pl e s o ur c es, or t h eft. 5 7 8. If p ati e nts di d n ot e x hi bit t h os e b e h a vi ors, T e v a r e pr es e nt e d t h at t h e y w er e m er el y e x hi biti n g si g ns of “ ps e u d o a d di cti o n :” T e v a c o -s p o ns or e d a n d distri b ut e d F S M B’s R es p o nsi bl e O pi oi d Pr es cri bi n g , w hi c h t a u g ht t h at b e h a vi ors s u c h as “r e q u esti n g dr u gs b y n a m e, ” “ d e m a n di n g or m a ni p ul ati v e b e h a vi or, ” s e ei n g m or e t h a n o n e d o ct or t o o bt ai n o pi oi ds, a n d h o ar di n g, w e r e n ot 155 162 of 258 FILED: SUFFOLK COUNTY CLERK 04/11/2019 11:19 AM NYSCEF DOC. NO. 19 INDEX NO. 400016/2018 RECEIVED NYSCEF: 04/11/2019 163 of 258 INDEX NO. 400016/2018 FILED: SUFFOLK COUNTY CLERK 04/11/2019 11:19 AM NYSCEF DOC. NO. 19 RECEIVED NYSCEF: 04/11/2019 V ersi o n D at e d A pr. 1 0, 2 0 1 9 wit h C ert ai n R e d a cti o ns R e m o v e d P er P arti es' A gr e e m e nt B e c a us e All er g a n l a c k e d a m e a ni n gf ul s us pi ci o us or d er m o nit ori n g pr o gr a m, its o pi oi ds fl o o d e d t h e m ar k et wit h o ut p a us e, w ors e ni n g t h e o pi oi ds e pi d e mi c. 1. All e r g a n’s Mis r e p r es e nt ati o ns R e g a r di n g O pi oi ds 5 8 2. All er g a n’s d e c e pti v e a n d misl e a di n g r e pr es e nt ati o ns f oll o w e d t h e o pi oi d m ar k eti n g pl a y b o o k, a n d i n cl u d e d s u c h m ess a g es as: (i) mi ni mi zi n g t h e ris k of a d di cti o n fr o m o pi oi ds g e n er all y; (ii) mi ni mi zi n g t h e ris k of a d di cti o n d u e t o t h e “ a b us e- d et err e nt ” f e at ur es of All er g a n pr o d u cts; (iii) pr o m oti n g t h e s p uri o us c o n c e pt of “ ps e u d o a d di cti o n ” t o ass u a g e pr es cri b ers’ c o n c er ns a b o ut a d di cti o n; (i v) cl ai mi n g t h at o pi oi d us e i m pr o v es f u n cti o ni n g; a n d ( v) e x a g g er ati n g t h e ris ks of alt er n ati v e p ai n tr e at m e nts. 5 8 3. A ll er g a n’s pr o m oti o n al s p e n di n g o n o pi oi ds , w hi c h w as virt u all y n o n e xist e nt i n t h e 2 0 0 4- 2 0 0 8 p eri o d, b e g a n t o s h ar pl y ris e i n 2 0 0 9, w h e n it b e g a n m ar k eti n g K a di a n . T h e t hir d q u art er of 2 0 1 1 s a w a p e a k of $ 3 milli o n a n d n e arl y $ 7 milli o n f or t h e y e ar. 5 8 4. T o e ns ur e t h at t h es e m ess a g es r e a c h e d i n di vi d u al p h ysi ci a ns, A ll er g a n d e pl o y e d s al es r e pr es e nt ati v es t o visit H C Ps i n N e w Y or k a n d a cr oss t h e c o u ntr y. B et w e e n 2 00 9 a n d 2 0 1 2, All er g a n s al es r e pr es e nt ati v es visit e d t h e offi c es of N e w Y or k h e al t h c ar e pr o vi d ers 2, 8 6 6 ti m es t o p us h All er g a n o pi oi d dr u gs. All er g a n c h os e its d et aili n g t ar g ets b as e d o n t h e li k eli h o o d of hi g h er n u m b ers of pr es cri pti o ns at hi g h er d os es, wit h n o c o nsi d er ati o n as t o t h e ris k of mis us e. All er g a n c ar ef ull y tr a c k e d t h e p r es cri pti o n tr e n ds of t h e H C Ps w h o m it d et ail e d. 5 8 5. All er g a n als o pr o m ot e d o pi oi ds i n N e w Y or k a n d n ati o n wi d e t hr o u g h Fr o nt Gr o u ps, usi n g a c o m bi n ati o n of C M Es, w e bsit es, a n d p ur p ort e dl y e d u c ati o n al a n d ot h er m at eri als t h at All er g a n dir e ct e d, s p o ns or e d, r e vi e w e d, a n d/ or a p pr o v e d. All er g a n’s m ar k eti n g pl a n r e c o g ni z e d t h at “[ d]ir e ct-t o-c o ns u m er m ar k eti n g aff e cts pr es cri bi n g d e cisi o ns, ” a n d s o it p ut its r el ati o ns hi ps wit h Fr o nt Gr o u ps t o w or k t o s pr e a d d e c e pti v e m ess a g es a b o ut o pi oi ds a n d t h e tr e at m e nt of p ain. 157 164 of 258 INDEX NO. 400016/2018 FILED: SUFFOLK COUNTY CLERK 04/11/2019 11:19 AM NYSCEF DOC. NO. 19 5 8 6. RECEIVED NYSCEF: 04/11/2019 V ersi o n D at e d A pr. 1 0, 2 0 1 9 wit h C ert ai n R e d a cti o ns R e m o v e d P er P arti es' A gr e e m e nt F or e x a m pl e, All er g a n a d v ertis e d t h at its e xt e n d e d-r el e as e m or p hi n e dr u g K a di a n c o ul d all o w c hr o ni c p ai n p ati e nts t o r et ur n t o w or k, r eli e v e “str ess o n y o ur b o d y a n d y o ur m e nt al h e alt h, ” a n d ot h er wis e e nj o y t h eir li v es. I n 2 0 1 0, t h e F D A w ar n e d All er g a n t h at its cl ai ms w er e misl e a di n g a n d t h er e w as i ns uffi ci e nt e vi d e n c e t o s h o w t h at t h e dr u g “ r es ults i n a n y o v er all p ositi v e i m p a ct o n a p ati e nt’s w or k, p h ysi c al a n d m e nt al f u n cti o ni n g, d ail y a cti viti es, or e nj o y m e nt of lif e. ” 5 8 7. T hr o u g h its “ L e ar n m or e a b o ut c ust o miz e d p ai n c o ntr ol wit h K a di a n ” p ati e nt m at eri al, All er g a n cl ai m e d t h at w hil e it is p ossi bl e t o b e c o m e a d di ct e d t o dr u gs li k e K a di a n, it is “l ess li k el y ” t o h a p p e n i n t h os e w h o “ h a v e n e v er h a d a n a d di cti o n pr o bl e m, ” s u g g esti n g t h e a d di cti o n ris k w as d e mi ni mis . T h e pi e c e w e nt o n t o a d vis e t h at a n e e d f or a “ d os e a dj ust m e nt ” is t h e r es ult of t ol er a n c e, a n d “ n ot a d di cti o n. ” 5 8 8. All er g a n’s “K a di a n M ar k eti n g U p d at e , ” a n d t h e “H C P D et ail ” ai d c o nt ai n e d t h er ei n, n ot e d t h at K a di a n’s “st e a d y st at e pl as m a l e v els ” e ns ur e d t h at K a di a n “ pr o d u c e d hi g h er tr o u g h c o n c e ntr ati o ns a n d a s m all er d e gr e e of p e a k-t o-tr o u g h fl u ct u ati o ns ” t h a n ot h er o pi oi ds, t h e i m pli c ati o n of w hi c h w as t h at K a di a n di d n ot pr o d u c e a e u p h ori c eff e ct, a n d t h er ef or e w as l ess a d di cti v e a n d l ess li k el y t o b e a b us e d. I n a s e p ar at e pr es e nt ati o n, All er g a n als o f als el y tr u m p et e d K a di a n as s af er t h a n ot h er o pi oi ds w h e n t a k e n wit h al c o h ol. 5 8 9. T h es e a n d ot h er t h e m es w er e r e p e at e d i n a g ui d e f or pr es cri b ers u n d er All er g a n’s c o p yri g ht, w hi c h d e c e pti v el y r e pr es e nt e d t h at K a di a n is m or e diffi c ult t o a b us e a n d l ess a d di cti v e t h a n ot h er o pi oi ds. T h e g ui d e in cl u d e d t h e f oll o wi n g st at e m e nts: 1) “ u ni q u e p h ar m a c e uti c al f or m ul ati o n of K A DI A N m a y off er s o m e pr ot e cti o n fr o m e xtr a cti o n of m or p hi n e s ulf at e f or i ntr a v e n o us us e b y illi cit us ers, ” a n d 2) K a di a n m a y b e l ess li k el y t o b e a b us e d b e c a us e of “sl o w o ns et of a cti o n, ” “l o w er p e a k pl as m a m or p hi n e l e v els t h a n e q ui v al e nt d os es of ot h er f or m ul ati o ns of m or p hi n e, ” “l o n g d ur ati o n of a cti o n, ” a n d “ mi ni m al fl u ct u ati o ns i n p e a k t o tr o u g h pl as m a l e v els 158 165 of 258 INDEX NO. 400016/2018 FILED: SUFFOLK COUNTY CLERK 04/11/2019 11:19 AM NYSCEF DOC. NO. 19 RECEIVED NYSCEF: 04/11/2019 V ersi o n D at e d A pr. 1 0, 2 0 1 9 wit h C ert ai n R e d a cti o ns R e m o v e d P er P arti es' A gr e e m e nt of m or p hi n e at st e a d y st at e. ” T h es e st at e m e nts, w hi c h ar e u ns u p p ort e d b y s u bst a nti al cli ni c al e vi d e n c e , c o n v e y b ot h t h at ( a) K a di a n d o es n ot c a us e e u p h ori a a n d t h er ef or e is l ess a d di cti v e a n d t h at ( b) K a di a n is l ess pr o n e t o t a m p eri n g a n d a b us e, e v e n t h o u g h t h e F D A di d n ot a p pr o v e K a di a n as a n a b us e d et err e nt f or m ul ati o n. 5 9 0. W h e n K a di a n w as first a p pr o v e d i n 1 9 9 6, it w as i n di c at e d f or t h e “ m a n a g e m e nt of m o d er at e t o s e v er e p ai n w h e n a c o nti n u o us, ar o u n d -t h e-cl o c k o pi oi d a n al g esi c is n e e d e d f or a n e xt e n d e d p eri o d of ti m e. ” B ut b y 2 0 1 4, aft er y e ars of K a di a n’s d e c e pti v e m ar k eti n g, t h e F D A c h a n g e d t h e i n di c ati o n t o us e o nl y f or “ m a n a g e m e nt of p ai n s e v er e e n o u g h t o r e q u ir e d ail y, ar o u n dt h e- cl o c k, l o n g-t er m o pi oi d tr e at m e nt a n d f or w hi c h alt er n ati v e tr e at m e nt o pti o ns ar e i n a d e q u at e. ” 5 9 1. All er g a n tr ai n e d its s al es r e pr es e nt ati v es t o d e c e pti v el y mi ni mi z e t h e ris k of a d di cti o n b y: (i) attri b uti n g a d di cti o n t o “ pr e dis p osi n g f a ct ors ” li k e f a mil y hist or y of a d di cti o n or ps y c hi atri c dis or d ers; (ii) e m p h asi zi n g t h e diff er e n c e b et w e e n s u bst a n c e d e p e n d e n c e a n d s u bst a n c e a b us e; a n d (iii) pr o m oti n g t h e u ns u p p ort e d t er m “ ps e u d o a d di cti o n. ” 5 9 2. All er g a n misl e a di n gl y i nstr u ct e d its s al es t e a m t h at o pi oi d d os es c o ul d b e es c al at e d d uri n g l o n g -t er m o pi oi d t h er a p y, wit h o ut hitti n g a d os e c eili n g, w hi c h p ur p ort e dl y m a d e t h e m s af er t h a n ot h er f or ms of t h er a p y s u c h as a c et a mi n o p h e n or N S AI Ds. 5 9 3. All er g a n i nt e n d e d f or pr es cri b ers t o r el y o n its d e c e pti v e m ess a g es a n d s ur v e y e d its pr es cri b ers t o e ns ur e t h at h a p p e n e d. All er g a n c o n d u ct e d m ar k et st u di es o n pr es cri b ers’ i m pr essi o ns of pr o m oti o n al pi e c es a n d ot h er m ar k eti n g eff orts, o bs er vi n g t h at d o ct ors ass o ci at e d K a di a n wit h l ess a b us e a n d n o hi g hs, i n c o m p aris o n t o ot h er o pi oi ds. 2. All e r g a n’s I m p a ct o n t h e G e n e ri c M a r k et 5 9 4. All er g a n a cti v el y m ar k et e d n ot o nl y its br a n d e d dr u gs b ut its g e n eri c dr u gs. P ri or t o t h e s al e of its g e n eri c b usi n ess t o T e v a, All er g a n’s m ar k eti n g str at e g y i n cl u d e d pr o m oti o n of its g e n eri c o pi oi ds, i n cl u di n g g e n eri c K a di a n ( m or p hi n e s ulf at e), dir e ctl y t o N e w Y or k H C Ps . All er g a n 159 166 of 258 INDEX NO. 400016/2018 FILED: SUFFOLK COUNTY CLERK 04/11/2019 11:19 AM NYSCEF DOC. NO. 19 RECEIVED NYSCEF: 04/11/2019 V ersi o n D at e d A pr. 1 0, 2 0 1 9 wit h C ert ai n R e d a cti o ns R e m o v e d P er P arti es' A gr e e m e nt s al es r e pr es e nt ati v es r e c ei v e d b o n us es f or b ot h br a n d e d a n d g e n eri c K a di a n s al es, a n d us e d t h e s a m e s elli n g p oi nts f or b ot h v ersi o ns of t h e dr u g. I n d e e d, All er g a n e x pli citl y a d o pt e d t h e d e c e pti v e K a di a n pr o m oti o n al c a m p ai g n w h e n it i nstr u ct e d its s al es st aff t h at its m ess a gi n g s h o ul d b e: “ K a di a n is still t h e s a m e pr o d u ct y o u h a v e pr es cri b e d f or 1 5 y e ars — o nl y n o w it is a v ail a bl e as g e n eri c. M or e f a v or a bl e pri ci n g f or y o ur p ati e nts, a v ail a bl e i n m a n y l e a di n g p h ar m a ci es, s a m e f e at ur es a n d b e n efits as t h e br a n d e d pr o d u ct. ” 5 9 5. All er g a n als o pr o m ot e d its g e n eri c O p a n a E R ( o x y m or p h o n e E R). All er g a n s a w a b usi n ess o p p ort u nit y d u e t o E n d o ’s dis c o nti n ui n g c ert ai n d os a g es a n d a n E n d o pr o d u cti o n mis h a p, a n d b e g a n tr ai ni n g a n d d e pl o yi n g t h e K a di a n s al es f or c e t o d et ail d o ct ors t o pr o m ot e g e n eri c O p a n a E R. All er g a n als o p ai d b o n us es t o its s al es t e a m b o n us es f or m e eti n g s al es g o als f or g e n eri c O p a n a E R. 109 5 9 6. All er g a n als o pr o m ot e d its g e n eri cs t hr o u g h dir e ct m ail a n d e m ail c a m p ai g ns a n d j o ur n al a d v ertisi n g a n d a g gr essi v el y m ar k et e d its g e n eri c o pi oi ds t hr o u g h its distri b ut ors, i n p arti c ul ar Distri b ut or D ef e n d a nt M c K ess o n. T o pr o m ot e All er g a n’s g e n eri c o x y m or p h o n e E R, o x y c o d o n e, a n d g e n eri c m or p hi n e s ulf at e, M c K ess o n d e pl o y e d a v ari et y of t a cti cs, i n cl u di n g n otif yi n g p h ar m a ci es a b o ut t h e pr o d u cts usi n g All er g a n t al ki n g p oi nts a n d p osti n g s ell s h e ets o n its w e bsit e. M c K ess o n h a d a n i n c e nti v e t o m a xi mi z e All er g a n’s o pi oi d s al es b e c a us e it r e c ei v e d a r e b at e t hr o u g h its “ O n e St o p ” s al es pr o gr a m if it a c hi e v e d a c ert ai n s al es v ol u m e. I n D e c e m b er 2 0 1 2, E n d o s u e d A ct a vis I n c., ar g ui n g t h at A ct a vis w as d e c e pti v el y m ar k eti n g g e n eri c O p a n a E R b y pi g g y b a c ki n g o n E n d o ’s all e g e dl y “ a b us e d et err e nt ” r ef or m ul ati o n. E n d o all e g e d t h at A ct a vis d es cri b e d t h e t a bl ets as b ei n g “ cr us h -r esist a nt t a bl ets. ” E n d o cl ai m e d t his c o nstit ut e d d e c e pti v e m ar k eti n g b e c a us e “[ w] h ol es al e distri b ut ors, pr es cri bi n g p h ysi ci a ns, dis p e nsi n g p h ar m a ci es a n d p ati e nts ar e li k el y t o r el y o n a n d h a v e r eli e d o n A ct a vis's misr e pr es e nt ati o ns i n distri b uti n g, pr es cri bi n g, dis p e nsi n g a n d p ur c h asi n g t h e G e n eri c O x y m or p h o n e E R T a bl ets. ” I n d e e d, d es cri bi n g g e n eri c O p a n a E R as cr us h -r esist a nt is f a ci all y d e c epti v e ( as w as E n d o’s c a m p ai g n t o m ar k et its dr u g as “ d esi g n e d t o b e cr us h -r esist a nt ”), a n d as E n d o a c k n o wl e d g e d, a c o m p a n y’s c ust o m ers r el y o n m ar k eti n g m ess a g es i n t h eir d e cisi o ns t o p ur c h as e, pr es cri b e, dis p e ns e, a n d t a k e a c o m p a n y’s dr u gs. 109 160 167 of 258 INDEX NO. 400016/2018 FILED: SUFFOLK COUNTY CLERK 04/11/2019 11:19 AM NYSCEF DOC. NO. 19 5 9 7. RECEIVED NYSCEF: 04/11/2019 V ersi o n D at e d A pr. 1 0, 2 0 1 9 wit h C ert ai n R e d a cti o ns R e m o v e d P er P arti es' A gr e e m e nt All er g a n si mil arl y c oll a b or at e d wit h Distri b ut or D ef e n d a nts C ar di n al a n d A m eris o ur c e t o pr o m ot e All er g a n’s g e n eri c o pi oi ds t hr o u g h t ar g et e d t el e m ar k eti n g a n d dir e ct m ail c a m p ai g ns ai m e d at p h ar m a ci es . All er g a n c oll a b or at e d wit h A m eris o ur c e i n a n i niti ati v e t o dri v e g e n eri c c o n v ersi o n at a f ast er r at e t h a n w h at w o ul d n or m all y o c c ur wit h o ut its i nt er v e nti o n. 5 9 8. All er g a n als o w or k e d wit h W al gr e e ns t o s e n d a l ett er t o p ati e nts w h o h a d fill e d a pr es cri pti o n f or O p a n a E R wit hi n t h e pri or y e ar, i nf or mi n g t h e m t h at alt h o u g h E n d o n o l o n g er m a n uf a ct ur e d c ert ai n d os a g es of O p a n a E R, a g e n eri c w as n o w a v ail a bl e fr o m All er g a n. 3. All e r g a n’s F ail u r e t o M ai nt ai n Eff e cti v e C o nt r ols a g ai nst Di v e rsi o n 5 9 9. T hr o u g h its misl e a di n g m ar k eti n g, All er g a n e x p a n d e d t h e m ar k et f or o pi oi ds i n N e w Y or k. N ot o nl y di d All er g a n d e c e pti v el y pr o m ot e o pi oi ds , it c o m p o u n d e d t his h ar m b y f aili n g t o p ut i n pl a c e a p pr o pri at e pr o c e d ur es t o e ns ur e t h at s us pi ci o us or d ers— or d ers of u n us u al si z e, fr e q u e n c y, or t h os e d e vi ati n g fr o m a n or m al p att er n— w o ul d b e r e p ort e d t o g o v er n m e nt al a ut h oriti es as r e q uir e d b y l a w. I nst e a d, All er g a n c o nti n u e d t o s u p pl y f ar m or e o pi oi ds t h a n w er e j ustifi e d, fl o o di n g t h e N e w Y or k m ar k et. 6 0 0. As a n e ntit y r e gist er e d wit h t h e D E A a n d B N E , All er g a n k n e w it w as r e q uir e d t o m ai nt ai n eff e cti v e c o ntr ols a g ai nst di v ersi o n of o pi oi ds a n d t o r e p ort s us pi ci o us or d ers. 6 0 1. All er g a n p oss ess e d a m pl e s o ur c es of d at a t h at all o w e d it t o d et e ct a n d r e p ort s us pi ci o us or d ers of o pi oi ds , b ot h fr o m its dir e ct a n d i n dir e ct c ust o m ers. T h e c o m p a n y’s s al es r e pr es e nt ati v es r e g ul arl y visit e d p h ar m a ci es a n d H C Ps t o pr o m ot e All er g a n’s pr o d u cts, w hi ch all o w e d t h e m t o o bs er v e r e d fl a gs of di v ersi o n. 6 0 2. D es pit e t h es e a v ail a bl e s o ur c es of i nf or m ati o n r e g ar di n g p ot e nti al di v ersi o n, All er g a n f ail e d t o pr o p erl y d esi g n a n d o p er at e a s yst e m t h at w o ul d b e c a p a bl e of d et e cti n g s us pi ci o us o pi oi d or d ers . Pri or t o 2 0 1 1, a n y pr o c ess t h at All er g a n h a d t h at c o ul d b e c o nsi d er e d a n o pi oi d or d er m o nit ori n g s yst e m w as n ot e v e n pr o p erl y a ut o m at e d. 161 168 of 258 Aft er 2 0 1 1, All er g a n fi n all y INDEX NO. 400016/2018 FILED: SUFFOLK COUNTY CLERK 04/11/2019 11:19 AM NYSCEF DOC. NO. 19 RECEIVED NYSCEF: 04/11/2019 V ersi o n D at e d A pr. 1 0, 2 0 1 9 wit h C ert ai n R e d a cti o ns R e m o v e d P er P arti es' A gr e e m e nt b e g a n t o a c k n o wl e d g e its r es p o nsi bilit y t o cr e at e a n o pi oi d or d er m o nit ori n g s yst e m, b ut t h e pr o c e d ur es it p ut i n pl a c e w er e s e v er el y l a c ki n g, a n d w er e f o c us e d o n a p pr o vi n g — n ot r estri cti n g — or d ers of e x c essi v e q u a ntiti es of o pi oi ds. 6 0 3. T o t h e e xt e nt All er g a n est a blis h e d t hr es h ol ds t o d et e ct s us pi ci o us or d ers, t h e y w er e w h oll y i n a d e q u at e. All er g a n als o a dj ust e d a n d ot h er wis e m a ni p ul at e d its t hr es h ol ds s o t h at it c o ul d s hi p its o pi oi d pr o d u cts wit h o ut a n y o bst a cl es . 6 0 4. All er g a n f ail e d t o p erf or m a p pr o pri at e d u e dili g e n c e o n its c ust o m ers, b ot h g e n er all y a n d at t h e ti m e it s h o ul d h a v e b e e n al ert e d t o a s us pi cio us or d er. I nst e a d of i n d e p e n d e ntl y i n v esti g ati n g c ust o m er s a n d t h e r e as o ns b e hi n d s us pi ci o us or d ers, All er g a n r e a c h e d o ut t o c ust o m ers a n d si m pl y as k e d t h e m t o pr o vi d e a j ustifi c ati o n f or l ar g e or d er s. All er g a n e v e n r e q uir e d c ust o m ers t o pr o vi d e a r e as o n f or r e d u c e d or d ers. 6 0 5. All er g a n f ail e d t o st o p s hi p m e nts aft er it k n e w or s h o ul d h a v e k n o w n t h at o pi oi d or d ers r e m ai n e d s us pi ci o us , h a d n o r e q uir e m e nt t o st o p s hi p m e nts o n s us pi ci o us i n dir e ct s al es, a n d f ail e d t o r e p ort s us pi ci o us or d ers t o B N E or t h e D E A . E v e nt u all y, All er g a n c e as e d o p er ati n g a n y s us pi ci o us or d er m o nit ori n g pr o gr a m at all, w h e n it “ o uts o ur c e d ” t h os e d uti es t o a distri b ut or. 6 0 6. Fi n all y, All er g a n f ail e d t o dis c o nti n u e d et aili n g H C Ps w h o w er e s us p e ct e d of di v ersi o n. O n t h e c o ntr ar y , All er g a n c hos e its d et aili n g t ar g ets b as e d o n t h e li k eli h o o d of hi g h er n u m b ers of pr es cri pti o ns. III. S p e cifi c Mis c o n d u ct of E a c h of t h e Dist ri b ut o r D ef e n d a nts 6 0 7. W hil e t h e M a n uf a ct ur er D ef e n d a nts cr e at e d t h e i niti al s ur g e i n d e m a n d f or o pi oi ds, a n d m ai nt ai n e d it wit h t h eir o n g oi n g fr a u d ul e nt c o n d u ct, t h e e x pl osi o n i n o pi oi d o v er us e i n N e w Y or k c o ul d n ot h a v e b e e n p er p et u at e d a n d e x p a n d e d o v er t h e p ast d e c a d e t o s u c h d e v ast ati n g eff e ct wit h o ut t h e gr ossl y n e gli g e nt a n d/ or willf ul mis c o n d u ct of t h e Distri b ut or D ef e n d a nts. 162 169 of 258 INDEX NO. 400016/2018 FILED: SUFFOLK COUNTY CLERK 04/11/2019 11:19 AM NYSCEF DOC. NO. 19 6 0 8. RECEIVED NYSCEF: 04/11/2019 V ersi o n D at e d A pr. 1 0, 2 0 1 9 wit h C ert ai n R e d a cti o ns R e m o v e d P er P arti es' A gr e e m e nt N e w Y or k h as e ntr ust e d p h ar m a c e uti c al distri b ut ors , t hr o u g h t h e d uti es e ns hri n e d i n t h e N Y C S A , wit h a n ess e nti al r ol e i n c utti n g off t h e fl o w of c o ntr oll e d s u bst a n c es fr o m m a n uf a ct ur ers t o p h ar m a ci es w h e n t h er e ar e w ar ni n g si g ns of p ot e nti al mis us e. As a pr a cti c al c o ns e q u e n c e, p h ar m a c e uti c al distri b ut ors w h o d o b usi n ess i n N e w Y or k h a v e t o a c c e pt t h e c osts of b ot h i m pl e m e nti n g eff e cti v e c o m pli a n c e f u n cti o ns a n d l osi n g pr os p e cti v e b ut n o n c o m pli a nt s al es t o p h ar m a ci es t h at ar e s u c c essf ull y bl o c k e d b y t h os e f u n cti o ns. 6 0 9. T h e Distri b ut or D ef e n d a nts r ef us e d t his l e g all y -r e q uir e d b ar g ai n, c h o osi n g i nst e a d t o pr ofit e er b y r e p e at e dl y a n d c o nti n u o usl y vi ol ati n g t h e N Y C S A o v er t h e p ast d e c a d e, e n a bli n g l u cr ati v e s al es of m assi v e v ol u m es of o pi oi d pr o d u cts t o p h ar m a ci es dis pl a yi n g e v e n t h e bri g ht est r e d fl a gs of mis us e. 6 1 0. E v e n if Pl ai ntiff c o ul d p oi nt t o n o arti c ul a bl e i nj ur y r es ulti n g fr o m t h e Distri b ut or D ef e n d a nts’ r o uti n e, e v er y d a y vi ol ati o ns of t h e N Y C S A, t h e y w o ul d still b e li a bl e t o p a y t h e p e n alti es s o u g ht h er e f or e a c h s u c h vi ol ati o n, w hi c h s er v e as N e w Y or k’s pri m ar y d et err e nt a g ai nst w ell -r es o ur c e d c or p or ati o ns b ei n g t e m pt e d t o s ki m p o n ( or i g n or e) t h eir d ut y t o pr o vi d e r o b ust c o m pli a n c e m e c h a nis ms. 6 1 1. B ut t h e Distri b ut or D ef e n d a nts h a v e i nj ur e d t h e St at e a n d its r esi d e nts. T h eir p er v asi v e a n d p ersist e nt c o urs e of mis c o n d u ct e n a bl e d a n d p er p et u at e d v ast i n cr e as es i n o pi oi d o v er- pr es cri pti o n, c a us e d n u m er o us f als e m e di c al-c ost p a y m e nt cl ai ms t o b e m a d e to ( a n d f ulfill e d b y) t h e St at e, a n d e x p o n e nti all y m ulti pli e d t h e t oll of d e at h, d estr u cti o n, a n d s uff eri n g t h at t h e St at e a n d its r esi d e nts h a v e alr e a d y e n d ur e d, a n d will still f a c e f or y e ars t o c o m e. 6 1 2. T h e Distri b ut or D ef e n d a nts k n e w t h e y w er e d oi n g t his at all r el e v a nt ti m es, y et t h e y n ot o nl y f ail e d t o fi x t h e y a w ni n g h ol es i n t h eir c o m pli a n c e s yst e ms, b ut a ls o li e d t o t h e St at e a b o ut t h os e s yst e ms i n or d er t o m ai nt ai n t h eir li c e ns es a n d t h eir a bilit y t o pr ofit fr o m t h e mis er y of N e w 163 170 of 258 INDEX NO. 400016/2018 FILED: SUFFOLK COUNTY CLERK 04/11/2019 11:19 AM NYSCEF DOC. NO. 19 RECEIVED NYSCEF: 04/11/2019 V ersi o n D at e d A pr. 1 0, 2 0 1 9 wit h C ert ai n R e d a cti o ns R e m o v e d P er P arti es' A gr e e m e nt 171 of 258 INDEX NO. 400016/2018 FILED: SUFFOLK COUNTY CLERK 04/11/2019 11:19 AM NYSCEF DOC. NO. 19 6 1 7. RECEIVED NYSCEF: 04/11/2019 V ersi o n D at e d A pr. 1 0, 2 0 1 9 wit h C ert ai n R e d a cti o ns R e m o v e d P er P arti es' A gr e e m e nt T h es e p oli ci es w er e f u n d a m e nt all y fl a w e d i n t h at t h e y w er e n ot c o or di n at e d wit hi n t h e c o nt e xt of a c o nsist e nt, u nifi e d u m br ell a p oli c y t o pr e v e nt t h e di v ersi o n of c o ntr oll e d s u bst a n c es, r es ulti n g i n e m pl o y e es g o v er n e d b y o n e of t h e S O Ps b ei n g u n a w ar e of t h e o bli g ati o ns i m p os e d b y ot h er S O Ps o n ot h er e m pl o y e es, e v e n w h e n eff e cti v e a nti -di v ersi o n m e as ur es r e q uir e d t h at u n d erst a n di n g a n d c o or di n ati o n. F urt h er m or e, t h es e d o c u m e nts ar e n ot r e a dil y a v ail a bl e e v e n t o t h e e m pl o y e es c h ar g e d wit h i m pl em e nti n g t h e m. 6 1 8. I n a d diti o n, C ar di n al’s S O Ps a n d p oli ci es c o nt ai n e d n u m er o us g a ps t h at w o ul d h a v e pr e v e nt e d t h e m fr o m eff e cti v el y pr e v e nti n g di v ersi o n, e v e n if e nf or c e d. F or e x a m pl e, t h es e p oli ci es: • All o w e d c o m pli a n c e st aff t o a p pr o v e o n b o ar di n g n e w a c c o u nts wit h n o f or m al m e c h a nis m t o e ns ur e r e vi e w a n d a p pr o v al b y a s u p er vis or; • All o w e d o n b o ar di n g of n e w a c c o u nts e v e n w h er e c ust o m ers f ail e d t o pr o vi d e r e q u est e d i nf or m ati o n a b o ut ot h er s u p pli ers, dis p e nsi n g d at a, a n d t o p pr es cri b er i nf or m ati o n; • All o w e d st aff t o i nf or m c ust o m ers w h e n t h e y w er e r e a c hi n g t h eir m o nt hl y t hr es h ol d all o w a n c e f or o pi oi d or d ers; • All o w e d c o m pli a n c e st aff t o r el e as e a c ust o m er’s first or d er i n e x c ess of its m o nt hl y t hr es h ol d, r e g ar dl ess of w h et h er t h e c ust o m er m a d e ot h er or d ers i n e x c ess of t h e s a m e dr u g t hr es h ol d at t h e s a m e ti m e; a n d • All o w e d c o m pli a n c e st aff t o u nil at er all y c h a n g e a c ust o m er’s t hr es h ol d all o w a n c e f or o pi oi d or d ers, wit h n o m e c h a nis m t o e ns ur e r e vi e w a n d a p pr o v al b y a s u p er vis or. 2. C a r di n al ’s F ail u r e t o Eff e cti v el y P r e v e nt Di v e rsi o n i n P r a cti c e 6 1 9. At all r el e v a nt ti m es, C ar di n al f ail e d t o e m pl o y q u alifi e d c o m pli a n c e st aff t o i m pl e m e nt t h es e p oli ci es, f ail e d t o a d e q u at el y tr ai n t h os e c o m pli a n c e st aff or its s al es r e pr es e nt ati v es c o n c er ni n g C ar di n al’s a nti- di versi o n d uti es, a n d f ail e d t o e nf or c e e v e n t h e d ef e cti v e p oli ci es it h a d i n pl a c e. 165 172 of 258 INDEX NO. 400016/2018 FILED: SUFFOLK COUNTY CLERK 04/11/2019 11:19 AM NYSCEF DOC. NO. 19 6 2 0. RECEIVED NYSCEF: 04/11/2019 V ersi o n D at e d A pr. 1 0, 2 0 1 9 wit h C ert ai n R e d a cti o ns R e m o v e d P er P arti es' A gr e e m e nt C ar di n al f ail e d t o i nst all q u alifi e d p ers o n n el i n k e y c o m pli a n c e p ositi o ns. e x a m pl e, C ar di n al’s fr o nt -li n e “ N e w o n b o ar di n g n e w c ust o m ers a n d F or A c c o u nt S p e ci alists ” a n d “ A n al ysts, ” r es p o nsi bl e f or m o nit ori n g e xisti n g c ust o m ers, r es p e cti v el y, w er e r o uti n el y r e cr uit e d fr o m t h e r a n ks of t h e c o m p a n y’s e xisti n g p o ol of a d mi nistr ati v e assist a nts. T h es e e m pl o y e es, w h o h a d n o e x p eri e n c e i n r e g ul at or y c o m pli a n c e, w er e g e n er all y s u p er vis e d b y p h ar m a cists or ot h er pr of essi o n als wit h n o pri or e x p eri e n c e i n s u p er visi n g i n v esti g ati v e f u n cti o ns. 6 2 1. M or e o v er, C ar di n al f ail e d t o pr o vi d e m e a ni n gf ul tr ai ni n g t o eit h er t h es e u n q u a lifi e d c o m pli a n c e p ers o n n el or s al es r e pr es e nt ati v es. I nst e a d, C ar di n al e x p e ct e d t h e c o m pli a n c e st aff t o “l e ar n o n t h e j o b ” t hr o u g h i nf or m al i n -p ers o n “t e a m m e eti n gs . ” D u e t o t h e l a c k of pr o p er tr ai ni n g a n d cl e ar g ui d eli n es, c o m pli a n c e st aff di d n ot f ull y u n d erst a n d criti c al c o m p o n e nts of t h eir j o bs a n d oft e n d e v el o p e d t h eir o w n pr o c e d ur es a n d b e n c h m ar ks f or r e vi e wi n g c ust o m ers. 6 2 2. U ns ur prisi n gl y, t h es e u n q u alifi e d a n d u ntr ai n e d st aff r o uti n el y f ail e d t o f oll o w e v e n t h e m ost b asi c pr o c e d ur es r e q uir e d u n d er t h e c o m p a n y’s v ari o us S O Ps. 6 2 3. F or e x a m p l e, w hil e C ar di n al’s S O P f or o n b o ar di n g n e w c ust o m ers c all e d f or t h eir N e w A c c o u nt S p e ci alists t o c o m pl et e c h e c klists si g n ali n g w h et h er t h e pr os p e cti v e c ust o m er dis pl a y e d r e d fl a gs of di v ersi o n, n e w c ust o m ers w er e r o uti n el y o n b o ar d e d d es pit e t h e c h e c klists n ot b ei n g c o m pl et e d. 6 2 4. M or e o v er, e v e n w h e n a N e w A c c o u nt S p e ci alist pr o vi d e d i nf or m ati o n a b o ut r e d fl a gs i n a s e p ar at e s e cti o n of t h e c h e c klist f or m, t h eir s u p er vis ors all o w e d t h e m t o pr o c e e d wit h o n b o ar di n g t h e n e w c ust o m ers wit h o ut c o n d u cti n g a p pr o pri at e d u e dili g e n c e t o r es ol v e t h os e i ss u es. I n d e e d, e v e n w h er e t h e N e w A c c o u nt S p e ci alist i n di c at e d t h at t h e cir c u mst a n c es c all e d f or a n o nsit e i n v esti g ati o n, a n d s u c h a n i n v esti g ati o n h a d b e e n arr a n g e d, c ust o m ers c o ul d b e o n b o ar d e d i m m e di at el y wit h o ut w aiti n g f or t h at i n v esti g ati o n. 166 173 of 258 FILED: SUFFOLK COUNTY CLERK 04/11/2019 11:19 AM NYSCEF DOC. NO. 19 INDEX NO. 400016/2018 RECEIVED NYSCEF: 04/11/2019 174 of 258 INDEX NO. 400016/2018 FILED: SUFFOLK COUNTY CLERK 04/11/2019 11:19 AM NYSCEF DOC. NO. 19 RECEIVED NYSCEF: 04/11/2019 V ersi o n D at e d A pr. 1 0, 2 0 1 9 wit h C ert ai n R e d a cti o ns R e m o v e d P er P arti es' A gr e e m e nt 6 2 8. E v e n t o st aff c h ar g e d wit h i n v esti g ati o ns a n d a nti -di v ersi o n, t h e m ess a g e w as cl e ar : wit h o ut s al es , t h er e is n o C ar di n al. I n d e e d, m a n y of C ar di n al’s p oli ci es a n d pr a cti c es h a v e pri oriti z e d s al es o v er r e g ul at or y o bli g ati o ns. 6 2 9. I n 2 0 1 2 a n d 2 0 1 3, C ar di n al t o o k si g nifi c a nt st e ps t o r e n e w f o c us o n i n cr e as e d s al es at t h e c ost of a r o b ust a n d r es p o nsi bl e c o m pli a n c e str u ct ur e, t h er e b y k e e pi n g as c ust o m ers p h ar m a ci es t h at it k n e w or s h o ul d h a v e k n o w n w er e hi g h ris k f or di v ersi o n of o pi oi ds. F or e x a m pl e, C ar di n al: • C o nti n u o usl y r e d u c e d t h e d u e dili g e n c e i nf or m ati o n c oll e ct e d fr o m pr os p e cti v e a n d e xisti n g c ust o m ers, dil uti n g t h e c ust o m er q u esti o n n air e, r e m o vi n g t h e r e q uir e m e nts t o c oll e ct p h ot os of t h e p h ar m a ci es, a n d c e asi n g t o as k a b o ut t o p pr es cri b ers; • E x p a n d e d t h e g e o gr a p hi c s c o p e of i n v esti g at ors wit h ess e nti al r e gi o n al k n o wl e d g e of , f or e x a m pl e, t o p pr es cri b ers a n d t h eir l o c ati o ns r el ati v e t o t h e p h ar m a ci es w h er e t h eir pr es cri pti o ns w er e b ei n g fill e d, t h us r e d u ci n g t h e i n v esti g at ors’ effi c a c y; • R estri ct e d t h e i nf or m ati o n r e vi e w e d fr o m sit e visits b y first r e m o vi n g t h e i n v esti g at or c o m m e nt s e cti o n a n d f or a ti m e eli mi n ati n g writt e n r e p orts e ntir el y; and • D e m ot e d, m o v e d t o n o n -c o m pli a n c e f u n cti o ns, or l et g o s e v er al st aff m e m b ers w h o arti c ul at e d a n i nt er est i n e x p a n di n g t h e c o m p a n y’s c o m pli a n c e f u n cti o ns, a g gr essi v el y s cr uti ni zi n g p h ar m a c y c ust o m ers, a n d/ or t er mi n ati n g pr o bl e m ati c c ust o m ers. 6 3 0. C ar di n al w as k n o w n b y its c o m p etit ors t o us e its t hr es h ol d fl e xi bilit y t o wi n b usi n ess. T h us, i n 2 0 1 3, M c K ess o n st aff n ot e d t h at c ust o m ers w er e b ei n g l ur e d t o C ar di n al wit h pr o mis es t h at ( 1) t h e y c o ul d b e s er vi c e d at t h eir pri or t hr es h ol d; ( 2) C ar di n al off er e d tr a ns p ar e n c y as t o i nit i al t hr es h ol d l e v els a n d w h er e c ust o m ers w er e wit h r es p e ct t o t h eir t hres h ol ds d uri n g t h e m o nt h; a n d ( 3) t hr es h ol ds c o ul d b e e asil y a dj ust e d u p t o a c ert ai n p oi nt. 6 3 1. As t o e xisti n g c ust o m ers, C ar di n al r o uti n el y f ail e d t o f oll o w t h e S O P’s pr o c e d ur es f or d et e cti n g, m o nit ori n g, a n d r e p orti n g s us pi ci o us or d ers. 168 175 of 258 INDEX NO. 400016/2018 FILED: SUFFOLK COUNTY CLERK 04/11/2019 11:19 AM NYSCEF DOC. NO. 19 6 3 2. RECEIVED NYSCEF: 04/11/2019 V ersi o n D at e d A pr. 1 0, 2 0 1 9 wit h C ert ai n R e d a cti o ns R e m o v e d P er P arti es' A gr e e m e nt F or o n e , C ar di n al’s c o m pli a n c e st aff r o uti n el y r el e as e d or d ers i n e x c ess of a c ust o m er’s t hr es h ol d wit h o ut c o n d u cti n g t h e f oll o w -u p i n v esti g ati o n a n d pr o vi di n g t h e d et ail e d writt e n j ustifi c ati o n c all e d f or b y t h e S O Ps. I n d e e d, C ar di n al r e g ul arl y r el e as e d m ulti pl e s u c h or d ers f or a gi v e n c ust o m er wit hi n e v e n a si n gl e d a y; c o m pli a n c e st aff c h e c k e d a b o x i n di c ati n g t h e j ustifi c ati o n as “ Ot h er ( d et ail e d e x pl a n ati o n r e q uir e d), ” b ut di d n ot r e c or d t h at d et ail e d j ustifi c ati o n. As a n ot h er e x a m pl e, i n t h e fi v e m o nt hs b et w e e n J ul y a n d N o v e m b er 2 0 1 5, C ar di n al r el e as e d s u c h or d ers t o t hr e e N e w Y or k p h ar m a ci es t h at e x c e e d e d t h eir t hr es h ol ds f or o pi oi d pr o d u cts i n fi v e, ei g ht, a n d t hirt e e n or d ers, r es p e cti v el y. 6 3 3. E v e n i n i nst a n c es w h er e C ar di n al’s st aff m a d e a n ot ati o n i n di c ati n g t h at s o m e ki n d of f oll o w -u p i n v esti g ati o n w o ul d b e r e q uir e d — f or e x a m pl e, a r e q u est t o dis c uss b e c a us e a n i n v esti g at or s us p e ct e d “ a n u n et hi c al pr a cti c e ”— t h e or d ers i n q u esti o n w er e r el e as e d i m m e diat el y, b ef or e a n y s u c h i n v esti g ati o n c o ul d p ossi bl y h a v e b e e n c o n cl u d e d. 6 3 4. I n a d diti o n, i n s e v er al i nst a n c es, o c c urri n g at l e ast as r e c e ntl y as 2 0 1 7, C ar di n al si m pl y fill e d or d ers i n e x c ess of c ust o m ers’ t hr es h ol ds wit h o ut t h os e or d ers h a vi n g b e e n d et e ct e d, h el d, or tri g g er e d f or r e vi e w at all, as r e q uir e d b y t h e r el e v a nt S O P. 6 3 5. E v e n w h er e C ar di n al di d bl o c k c ust o m ers’ or d ers a n d r e p ort t h e m as s us pi ci o us t o t h e D E A, it r o uti n el y t o o k n o st e ps t o s us p e n d or t er mi n at e t h os e c ust o m ers p e n di n g f urt h er i n v esti g ati o n, a n d i nst e a d all o w e d t h e m t o c o nti n u e r e c ei vi n g t h eir t hr es h ol d a m o u nt of o pi oi ds m o nt h aft er m o nt h t h er e aft er, r e g ar dl e ss of w h et h er t h e c ust o m er c o nti n u e d t o m a k e a d diti o n al s us pi ci o us or d ers. 6 3 6. B et w e e n 2 0 1 2 a n d 2 0 1 7, f or e x a m pl e, C ar di n al r e p ort e d t w el v e or m or e o pi oi d - r el at e d s us pi ci o us or d ers f or at l e ast o n e y e ar —t h e e q ui v al e nt of o n e p er m o nt h — f or 1 9 5 s e p ar at e 169 176 of 258 INDEX NO. 400016/2018 FILED: SUFFOLK COUNTY CLERK 04/11/2019 11:19 AM NYSCEF DOC. NO. 19 RECEIVED NYSCEF: 04/11/2019 V ersi o n D at e d A pr. 1 0, 2 0 1 9 wit h C ert ai n R e d a cti o ns R e m o v e d P er P arti es' A gr e e m e nt p h ar m a ci es i n N e w Y or k . F or n e arl y h alf of t h es e p h ar m a ci es, C ar di n al r e p ort e d a n a v er a g e of o n e o pi oi d-r el at e d s us pi ci o us or d er p er m o nt h f or t w o or m or e y e ars. 6 3 7. T h os e p h ar m a ci es h a d s e v er al k n o w n r e d fl a gs i n t h eir s hi p m e nt or d ers a n d pr es cri pti o n d at a. Mor e t h a n h alf of t h es e ph ar m a ci es: ( a) e x c e e d e d t h e 9 0t h p er c e ntil e i n t h e S t at e i n t er ms of o pi oi d v ol u m e s hi p p e d; ( b) ex c e e d e d t h e 9 0t h p er c e ntil e i n t h e S t at e i n t er ms of o x y c o d o n e v ol u m e s hi p p e d; a n d ( c) ex c e e d e d t h e 9 0t h p er c e ntil e i n t h e S t at e i n t er ms of m e di a n str e n gt h of o pi oi ds pr es cri b e d p er d a y . 6 3 8. Aft er t h e first y e ar i n w hi c h C ar di n al r e p ort e d t w el v e or m or e o pi oi d-r el at e d s us pi ci o us or d ers f or o n e of t h es e p h ar m a ci es , C ar di n al c o nti n u ed t o s hi p o pi oi ds, o n a v er a g e, f or m or e t h a n t hr e e y e ars . I n f a ct, as of 2 0 1 8, it a p p e ars t h at C ar di n al w as still s hi p pi n g o pi oi ds t o 1 4 9 of t h es e p h ar m a ci es, or 7 6 % of t h e gr o u p. 6 3 9. M or e o v er, a s of 2 0 1 8 , 8 5 % of t his gr o u p of p h ar m a ci es h a d fill e d pr es cri pti o ns b y at l e ast o n e pr es cri b er w h o w as s u bs e q u e ntl y i n di ct e d or c o n vi ct e d o n o pi oi d -r el at e d pr es cri bi n g a n d distri b uti o n c h ar g es. 6 4 0. Wit hi n t his gr o u p of s us p e ct p h ar m a ci es t h at C ar di n al di d n ot hi n g t o c o ntr ol, fi v e st a n d o ut as p arti c ul arl y e gr e gi o us. I n e a c h c as e, C ar di n al r e p ort e d m or e t h a n 5 0 o pi oi d -r el at e d s us pici o us or d ers p er y e ar —t h e e q ui v al e nt of o n e s us pi ci o us or d er p er w e e k t o eit h er t h e N e w Y or k St at e D e p art m e nt of H e alt h ( “ D O H ”) or t h e Dr u g E nf or c e m e nt A g e n c y ( “ D E A ”) — for t hr e e or m or e c o ns e c uti v e y e ars . T his, d es pit e t h e f a ct t h at all fi v e p h ar m a ci es s e p ar at el y e x hi bit e d n u m er o us k n o w n i n di c at ors of illi cit a cti vit y. 6 4 1. • S o m e e x a m pl es of t h es e p h ar m a ci es i n cl u d e : C a r di n al E x e m pl a r P h a r m a c y 1 w as t h e n u m b er - o n e p h ar m a c y i n t er ms of o pi oi d v ol u m e i n S uff ol k C o u nt y a n d i n t h e 9 9t h p er c e nti l e f or t h e St at e fr o m 2 0 1 1 t hr o u g h t h e first q u art er of 2 0 1 8. Its m e di a n M M E p er d a y e x c e e d e d t h e 9 5t h p er c e ntil e f or t h e e ntir e S t at e f or 170 177 of 258 INDEX NO. 400016/2018 FILED: SUFFOLK COUNTY CLERK 04/11/2019 11:19 AM NYSCEF DOC. NO. 19 RECEIVED NYSCEF: 04/11/2019 V ersi o n D at e d A pr. 1 0, 2 0 1 9 wit h C ert ai n R e d a cti o ns R e m o v e d P er P arti es' A gr e e m e nt all of 2 0 1 3 t o 2 0 1 7. C ar di n al r e p ort e d a n a v er a g e of 8 5 s us pi ci o us or d ers p er y e ar f or fi v e y e ars, t h e e q ui v al e nt of m or e t h a n o n c e a w e e k, y et as of 2 0 1 8, t his p h ar m a c y c o nti n u e d t o r e c ei v e o pi oi ds fr o m C ar di n al. • C a r di n al E x e m pl a r P h a r m a c y 2 l o c at e d i n Gr e e n e C o u nt y, wit h a p o p ul ati o n of a b o ut 5 0, 0 0 0, e x c e e d e d t h e 9 5t h p er c e ntil e i n t er ms of o pi oi d a n d o x y c o d o n e v ol u m e s hi p p e d, r el ati v e t o all ot h er p h ar m a ci es i n t h e S t at e i n at l e ast o n e y e ar. Fr o m 2 0 1 2 t o 2 0 1 8, C ar di n al s hi p p e d m or e t h a n 2 0, 0 0 0 gr a ms of o pi oi ds t o t his p h ar m a c y , t h e e q ui v al e nt of a b o ut t hirt e e n 3 0 m g o x y c o d o n e pills f or e v er y p ers o n i n t h e c o u nt y. As of 2 0 1 8, it w as t h e l ar g est p h ar m a c y i n t h e c o u nt y i n t er ms of o pi oi d v ol u m e, o x y c o d o n e v ol u m e, o x y c o d o n e or d ers, a n d p er c e nt a g e of o x y c o d o n e v ol u m e r el ati v e t o all c o ntr oll e d s u bst a n c es. F or 2 0 1 3 t o 2 0 1 7 , a n a v er a g e of 2 0 % of c ust o m ers fill e d pr es cri pti o n s fr o m thr e e or m or e pr es cri b ers p er y e ar ( li k el y “ d o ct or-s h o p p ers ”). Fr o m 2 0 1 5 t o 2 0 17 , C ar di n al wr ot e a t ot al of 9 9 3 S us pi ci o us Or d er R e p orts ( “S O Rs ”) —t h e e q ui v al e nt of t hr e e e v er y si n gl e d a y f or t hr e e y e ars— 1 9 3 of w hi c h w er e o pi oi d r el at e d. Y et as of 2 0 1 8, C ar di n al h as c o nti n u e d t o s hi p o pi oi ds t o t his p h ar m a c y. 171 178 of 258 INDEX NO. 400016/2018 FILED: SUFFOLK COUNTY CLERK 04/11/2019 11:19 AM NYSCEF DOC. NO. 19 RECEIVED NYSCEF: 04/11/2019 V ersi o n D at e d A pr. 1 0, 2 0 1 9 wit h C ert ai n R e d a cti o ns R e m o v e d P er P arti es' A gr e e m e nt 6 4 2. I n m a n y ot h er i nst a n c es, h o w e v er, C ar di n al si m pl y f ail e d t o bl o c k s us pi ci o us or d ers at all, d es pit e o v er w h el mi n g a n d t ellt al e si g ns of s us pi ci o us a cti vit y. F or t h es e p h ar m a ci es, r at h er t h a n fil e a si n gl e o pi oi d-r el at e d S O R, C ar di n al s hi p p e d o pi oi ds f or y e ars o n e n d. 6 4 3. F or e x a m pl e, C ar di n al h a d 7 0 p h ar m a c y c ust o m ers as t o w hi c h ot h er distri b ut ors r e p ort e d at l e ast si x o pi oi d-r el at e d s us pi ci o us or d ers p er y e ar, t h e e q ui v al e nt of o n e e v er y ot h er m o nt h, w hil e C ar di n al di d n ot r e p ort a si n gl e o pi oi d- r el at e d s us pi ci o us or d er. 6 4 4. M ost of t h es e p h ar m a ci es e x hi bit e d o n e or m or e k n o w n “r e d fl a gs ” i n di c ati n g s us pi ci o us a cti vit y: • E x c e e d e d 9 0t h p er c e ntil e i n c o u nt y i n t er ms of o pi oi d or d ers; • E x c e e d e d 9 0t h p er c e ntil e i n c o u nt y i n t er ms of o pi oi d v ol u m e; • E x c e e d e d 9 0t h p er c e ntil e i n c o u nt y i n t er ms of o x y c o d o n e v ol u m e; • E x c e e d e d 9 0t h p er c e ntil e i n St at e i n t er ms of o x y c o d o n e v ol u m e; 172 179 of 258 INDEX NO. 400016/2018 FILED: SUFFOLK COUNTY CLERK 04/11/2019 11:19 AM NYSCEF DOC. NO. 19 RECEIVED NYSCEF: 04/11/2019 V ersi o n D at e d A pr. 1 0, 2 0 1 9 wit h C ert ai n R e d a cti o ns R e m o v e d P er P arti es' A gr e e m e nt • M or e t h a n 2 0 % of c ust o m ers fill e d o pi oi d pr es cri pti o ns at t hr e e or m or e p h ar m a ci es i n a si n gl e c al e n d ar y e ar, t h e 9 0t h p er c e ntil e of p h ar m a ci es visit e d b y a si n gl e c ust o m er; • M or e t h a n 2 0 % of c ust o m ers fill e d o pi oi d pr es cri pti o ns writt e n b y t hr e e or m or e diff er e nt pr es cri b ers i n a si n gl e c al e n d ar y e ar, t h e 9 0t h p er c e ntil e of pr o vi d ers visit e d b y a si n gl e p ati e nt; a n d • O pi oi d pr es cri pti o ns writt e n b y a pr o vi d er w h o w as s u bs e q u e ntl y i n di ct e d or c o n vi ct e d o n o pi oi d-r el at e d pr es cri bi n g a n d distri b uti o n c h ar g es . 6 4 5. S o m e of t h es e p h ar m a ci es e x hi bit e d s e v er al r e d fl a gs . T w o e x a m pl es st a n d o ut: • C a r di n al E x e m pl a r P h a r m a c y 3 l o c at e d i n Eri e C o u nt y, e x c e e d e d t h e 9 0t h p er c e ntil e i n t h e st at e f or n u m b er of o pi oi d or d ers a n d t ot al o pi oi d v ol u m e fr o m 2 0 1 0 t o 2 0 1 8 . Its m e di a n M M E p er d a y f or pr es cri pti o ns e x c e e d e d t h e 9 0t h p er c e ntil e f or t h e st at e f or 2 0 1 32 0 1 6. M or e t h a n 2 0 % of its c ust o m ers h a v e r e c ei v e d o pi oi d pr es cri pti o ns b y t hr e e or m or e d o ct ors i n t h e s a m e p eri o d. B et w e e n 2 0 1 0 a n d 2 0 1 4, M c K ess o n, a n ot h er s u p pli er, bl o c k e d or d ers a n d iss u e d 2 2 3 S O Rs. Y et C ar di n al a p p e ars t o h a v e c o nti n u e d s hi p pi n g o pi oi ds t o t h e p h ar m a c y u ntil 2 0 1 5. I n 2 0 1 6, t h e p h ar m a c y s ettl e d wit h t h e St at e f or c h ar g es r el at e d t o M e di c ai d fr a u d. • C a r di n al E x e m pl a r P h a r m a c y 4 l o c at e d in N ass a u C o u nt y, h a d a m e di a n M M E p er d a y t h at e x c e e d e d t h e 9 0t h p er c e ntil e fr o m 2 0 1 3 t o 2 0 1 7. F or fi v e c o ns e c uti v e y e ars, it e x c e e d e d t h e 9 0t h p er c e ntil e i n t er ms of n u m b er of o x y c o d o n e or d ers a n d o x y c o d o n e v ol u m e s hi p p e d, r el ati v e t o all ot h er p h ar m a ci es i n t h e S t at e. D es pit e t h es e si g ns, C ar di n al iss u e d o nl y t w o o pi oi d-r el at e d S O Rs, w hi c h o c c urr e d i n 2 0 1 6. B y t his p oi nt, M c K ess o n, a n ot h er s u p pli er, h a d iss u e d 5 7 S O Rs, 2 4 of w hi c h w er e o pi oi d-r el at e d. 6 4 6. I n still ot h er i nst a n c es, n eit h er Car di n al n or ot h er distri b ut ors r e p ort e d n u m er o us s us pi ci o us or d ers, b ut al m ost c ert ai nl y s h o ul d h a v e, gi v e n t h at a h a n df ul of pr es cri b ers w er e r es p o nsi bl e f or writi n g a n u n us u all y hi g h p er c e nt a g e of t h e p h ar m a c y’s o pi oi d pr es cri pti o ns. B y its elf, h a vi n g a hi g h c o n c e ntr ati o n of o pi oi d pr es cri pti o ns writt e n b y a s m all n u m b er of pr o vi d ers is a k n o w n r e d fl a g f or o pi oi d di v ersi o n. S u bs e q u e ntl y, t h es e p h ar m a ci es h a d a m o n g t h e hi g h est p er c e nt a g e of pr es cri pti o ns writt e n b y pr o vi d ers w h o w er e i n di ct e d or c o n vi ct e d o n o pi oi d-r el at e d pr es cri bi n g a n d distri b uti o n c h ar g es. S o m e e x a m pl es of t h es e p h ar m a ci es i n cl u d e : 173 180 of 258 INDEX NO. 400016/2018 FILED: SUFFOLK COUNTY CLERK 04/11/2019 11:19 AM NYSCEF DOC. NO. 19 RECEIVED NYSCEF: 04/11/2019 V ersi o n D at e d A pr. 1 0, 2 0 1 9 wit h C ert ai n R e d a cti o ns R e m o v e d P er P arti es' A gr e e m e nt • C a r di n al E x e m pl a r P h a r m a c y 5 l o c at e d o n St at e n Isl a n d: I n 2 0 1 6 a n d 2 0 1 7 , a p pr o xi m at el y 6 0 % of pr es cri pti o ns w er e writt e n b y pr es cri b ers w h o w er e l at er i n di ct e d or c o n vi ct e d. T h e m e di a n M M E p er d a y w as a b o ut 1 7 0, n e arl y t wi c e t h e C D C’s r e c o m m e n d e d m a xi m u m of 9 0 M M E p er d a y . A b o ut 6 0 % of pr es cri pti o ns w er e p ai d f or i n c as h i n 2 0 1 6 a n d 2 0 1 7. T his p h ar m a c y is i n t h e 9 8t h p er c e ntil e i n o x y c o d o n e s hi p p e d as a p er c e nt a g e of all c o ntr oll e d s u bst a n c es f or 2 0 1 6. All of t h es e i n di c at ors a r e si g nifi c a nt o utli ers w h e n c o m p ar e d wit h ot h er p h ar m a ci es. C ar di n al h a d y et t o iss u e a si n gl e S O R r el at e d t o t his p h ar m a c y as of D e c e m b er 2 0 1 7 . • C a r di n al E x e m pl a r P h a r m a c y 6 l o c at e d i n Q u e e ns C o u nt y: B et w e e n 2 0 1 4 a n d 2 0 1 6, a p pr o xi m at el y 4 5 % of pr es cri pti o ns w er e writt e n b y pr es cri b ers w h o w er e l at er i n di ct e d or c o n vi ct e d o n o pi oi d- r el at e d pr es cri bi n g or distri b uti o n c h ar g es; its pr es cri pti o ns h a d a hi g h m e di a n M M E p er d a y of 1 3 5 ; a n d it r a n k e d i n t h e 9 7t h p er c e ntil e i n t h e St at e t er ms of o pi oi ds v ol u m e as a p er c e nt a g e of all c o ntr oll e d s u bst a n c es. C ar di n al h as o nl y iss u e d o n e S O R f or t his p h ar m a c y . 174 181 of 258 INDEX NO. 400016/2018 FILED: SUFFOLK COUNTY CLERK 04/11/2019 11:19 AM NYSCEF DOC. NO. 19 RECEIVED NYSCEF: 04/11/2019 V ersi o n D at e d A pr. 1 0, 2 0 1 9 wit h C ert ai n R e d a cti o ns R e m o v e d P er P arti es' A gr e e m e nt • 6 4 7. C a r di n al E x e m pl a r P h a r m a c y 7 l o c at e d i n N e w Y or k C o u nt y: I n 2 0 1 3 , 8 9 % of pr es cri pti o ns w er e writt e n b y pr es cri b ers w h o w er e l at er i n di ct ed or c o n vi ct e d , a n d 9 2 % of p a y m e nts w er e m a d e i n c as h. M e di a n M M E p er d a y w as at or e x c e e d e d 1 3 5 f or 2 0 1 3-2 0 1 5 a n d w as as hi g h as 1 8 0 i n 2 0 1 7 . C ar di n al h a d y et t o iss u e a si n gl e S O R or st o p s hi p pi n g t o t his p h ar m a c y as of 2 0 1 8. Fi n all y, e v e n if C ar di n al h a d c o n d u ct e d d u e dili g e n c e t o i n v esti g at e its hi g h - v ol u m e o pi oi ds c ust o m ers i n N e w Y or k, C ar di n al’s f ail ur e t o i m pl e m e nt a n y s yst e m t o st or e a n d s h ar e i nf or m ati o n a b o ut t h eir s us pi ci o us c ust o m ers a n d/ or s us pi ci o us pr es cri b ers w o ul d h a v e c o m pr o mis e d t h e eff e cti v e n ess of a n y s u c h i n v esti g ati o n. 6 4 8. D u e t o t h es e fl a ws, C ar di n al r o uti n el y c o nti n u e d t o s u p pl y p h ar m a ci es t h at fill e d pr es cri pti o ns f or pr es cri b ers t h at h a d b e e n fl a g g e d i n its o w n (i nfr e q u e nt) i n v esti g ati o ns of ot h er p h ar m a ci es as li k el y s o ur c es of d i v ersi o n. F or e x a m pl e, C ar di n al k n e w at l e ast as e arl y as 2 0 0 8 t h at o n e of its c ust o m ers h a d r ef us e d t o fill pr es cri pti o ns f or Dr. D a nt e C u b a n g b a n g, a d e cisi o n its i n v esti g at or e x pli citl y n ot e d as a r e as o n t h at p h ar m a c y c o ul d b e tr ust e d. 175 182 of 258 B ut b e c a us e t his INDEX NO. 400016/2018 FILED: SUFFOLK COUNTY CLERK 04/11/2019 11:19 AM NYSCEF DOC. NO. 19 RECEIVED NYSCEF: 04/11/2019 V ersi o n D at e d A pr. 1 0, 2 0 1 9 wit h C ert ai n R e d a cti o ns R e m o v e d P er P arti es' A gr e e m e nt i nf or m ati o n w as n ot m a d e a v ail a bl e t hr o u g h t h e r et e nti o n of a s h ar e d list of s us p e ct pr es cri b ers, C ar di n al c o nti n u e d t o s u p pl y ot h er p h ar m a ci es t h at C ar di n al k n e w h a d Dr. C u b a n g b a n g as o n e of its t o p pr es cri b ers, u ntil j ust m o nt hs b ef or e Dr. C u b a n g b a n g w a s arr est e d i n 2 0 1 8 o n o pi oi d- r el at e d c h ar g es . 6 4 9. C ar di n al’s a c q uisiti o ns of P ar M e d a n d Ki nr a y l e d t o s u bst a nti al a d diti o n al vi ol ati o ns. C ar di n al t o o k o n t h es e n e w s u bsi di ari e s’ c ust o m ers d es pit e t h eir d efi ci e nt n e w c ust o m er s cr e e ni n g, c o nfli cti n g p oli ci es , a n d f a ult y a nti -di v ersi o n m e as ur es. Th e i nt e gr ati o n pr o c ess its elf als o cr e at e d g a ps t h at all o w e d c o ntr oll e d s u bst a n c es t o pr o c ess t hr o u g h t h e s yst e m wit h o ut a d h eri n g t o C ar di n al’s s us pi ci o us or d er m o nit ori n g p oli ci es. F or e x a m pl e: • I n 2 0 1 7, C ar di n al staff dis c o v er e d t h at s e v er al P ar M e d c ust o m ers eit h er m a d e p ur c h as es b e y o n d t h eir t hr es h ol d wit h o ut t h e or d er b ei n g h el d f or r e vi e w or tri g g eri n g t h e s us pi ci o us or d er m o nit ori n g pr o c ess at all, or, t h e s us pi ci o us or d er m o nit ori n g pr o c ess w as tri g g er e d a n d a n or d er c ut, b ut t h e c ust o m er w as a bl e t o c o nti n u e p ur c h asi n g a n d r e c ei vi n g a d diti o n al or d ers of t h at pr o d u ct i n e x c ess of t h e t hr es h ol d; • D uri n g t h e i nt e gr ati o n pr o c ess, a n u m b er of P ar M e d c ust o m ers w er e a bl e t o or d er c o ntr oll e d s u bst a n c es wit h o ut h a vi n g t h e r e q uir e d “ K n o w Y o ur C ust o m er ” d u e dili g e n c e d o c u m e nt ati o n o n fil e; • I n o n e e x a m pl e of Ki nr a y n e w c ust o m er o n b o ar di n g, a p h ar m a c y i n list e d a nti ci p at e d t o p pr es cri b ers o n its Ki nr a y A c c o u nt Pr ofil e Q u esti o n n air e d es pit e n ot y et o p e ni n g its d o ors, a n d w as a p pr o v e d. A y e ar l at er, Ki nr a y u n c o v er e d s eri o us r e d fl a gs r el at e d t o o n e of t h os e pr es cri b ers, Dr. W a y n e L o n g m or e— i n cl u di n g hi g h c as h a n d o nli n e r e vi e ws st ati n g t h e d o ct or w as a “ dr u g p us h er ” w h o “ o v er pr es cri b es h y dr o c o d o n e a n a d di cti v e p ai n kill er. ” C ar di n al s er vi c e d t h e c ust o m er f or a n ot h er y e ar b ef or e p urs ui n g a m or e i n -d e pt h i n v esti g ati o n. Dr. L o n g m or e w as c o n vi ct e d i n e arl y 2 0 1 3 f or i m pr o p erl y dis p e nsi n g dr u gs, i n cl u di n g n e arl y 1 0, 0 0 0 h y dr o c o d o n e pr es cri pti o ns, d uri n g t h e ti m e Ki nr a y a n d C ar di n al s er vi c e d t h e p h ar m a c y ; a n d • Ki nr a y s al es r e pr es e nt ati v es r e g ul arl y c o m m u ni c at e d wit h c ust o m ers r e g ar di n g t h eir a p pr o a c hi n g t hr es h ol ds, w hi c h all o w e d t h e m t o s u b mit i n cr e as e r e q u ests b ef or e h a vi n g a n or d er h el d— oft e n at t h e e n c o ur a g e m e nt of Ki nr a y st aff . T h o u g h t h e pr a cti c e w as 176 183 of 258 INDEX NO. 400016/2018 FILED: SUFFOLK COUNTY CLERK 04/11/2019 11:19 AM NYSCEF DOC. NO. 19 RECEIVED NYSCEF: 04/11/2019 V ersi o n D at e d A pr. 1 0, 2 0 1 9 wit h C ert ai n R e d a cti o ns R e m o v e d P er P arti es' A gr e e m e nt k n o w n t o C ar di n al c o m pli a n c e m a n a g ers at t h e ti m e, at l e ast o n e C ar di n al c o m pli a n c e st aff m e m b er h as si n c e a c k n o w l e d g e d t h at pr a cti c e as i n a p pr o pri at e. 6 5 0. I n a d diti o n t o n u m er o us i nst a n c es, i n cl u di n g t h os e cit e d a b o v e, i n w hi c h C ar di n al’s o w n e m pl o y e es a c k n o wl e d g e d f ail ur es i n its c o m pli a n c e s yst e ms, t h e c o m p a n y w as e x pli citl y p ut o n n oti c e o n m ulti pl e o c c asi o ns b y g o v er n m e nt a g e n ci es t h at it w as n ot f ulfilli n g its d uti es, i n cl u di n g t h os e it o w e d t o Pl ai ntiff. 6 5 1. F or e x a m pl e, i n 2 0 0 7 a n d 2 0 0 8, t h e D E A iss u e d s us p e nsi o n or d ers a g ai nst f o ur of C ar di n al’s distri b uti o n c e nt ers f or f ail ur e t o m ai nt ai n eff e cti v e a nti - di v ersi o n c o ntr ols, a n d all e g e d t h at s u c h f ail ur es o c c urr e d at t hr e e a d diti o n al C ar di n al distri b uti o n c e nt ers. C ar di n al e nt er e d i nt o a s ettl e m e nt wit h t h e D E A i n 2 0 0 8 a gr e ei n g t o r ef or m its p oli ci es a n d pr a cti c es a n d p a y a t ot al of $ 3 4 milli o n i n p e n alti es t o s e v e n st at es. 6 5 2. N ot wit hst a n di n g t his s ettl e m e nt a n d C ar di n al’s a gr e e m e nt t o m ai nt ai n eff e cti v e c o ntr ols, t h e D E A iss u e d a n ot h er s us p e nsi o n or d er i n 2 0 1 2 a g ai nst a n ot h er C ar di n al distri b uti o n c e nt er, b as e d o n t h e c o m p a n y’s c o nti n ui n g f ail ur e t o m ai nt ai n eff e cti v e a nti- di v ersi o n c o ntr ols. C ar di n al s ettl e d t his m att er wit h t h e D E A first i n 2 0 1 2 b y a gr e ei n g t o m ai nt ai n a n eff e cti v e c o m pli a n c e pr o gr a m; t h at a gr e e m e nt i n cl u d e d s p e cifi c r e q uir e m e nts, s o m e of w hi c h w er e n ot f or m ali z e d i nt o C ar di n al’s S O Ps u ntil 2 0 1 6. I n 2 0 1 6, C ar di n al e nt er e d i nt o y et a n ot h er s ettl e m e nt wit h t h e D E A, a g r e ei n g t o p a y a $ 4 4 milli o n fi n e a n d t o i m pl e m e nt b ett er p oli ci es a n d pr o c e d ur es. 6 5 3. Als o i n 2 0 1 2, t h e St at e of W est Vir gi ni a s u e d C ar di n al, all e gi n g t h at t h e m e r e v ol u m e of o pi oi d pills t h e c o m p a n y s hi p p e d i nt o t h e st at e o v er t h e pr e c e di n g fi v e y e ars w as pr i m a f a ci e e vi d e n c e t h at C ar di n al di d n ot h a v e eff e cti v e p oli ci es a n d pr o c e d ur es f or pr e v e nti n g di v ersi o n. I n 2 0 1 6, C ar di n al s ettl e d t h at c as e f or $ 2 0 milli o n. 6 5 4. D es pit e k n o wi n g of t h e br o a d f ail ur es of its c o m pli a n c e p oli ci es, b ot h as writt e n a n d as a ct u all y e nf or c e d, a n d k n o wi n g of n u m er o us i nst a n c es i n w hi c h t h os e f ail ur es h a d l e d t o 177 184 of 258 INDEX NO. 400016/2018 FILED: SUFFOLK COUNTY CLERK 04/11/2019 11:19 AM NYSCEF DOC. NO. 19 RECEIVED NYSCEF: 04/11/2019 V ersi o n D at e d A pr. 1 0, 2 0 1 9 wit h C ert ai n R e d a cti o ns R e m o v e d P er P arti es' A gr e e m e nt 185 of 258 INDEX NO. 400016/2018 FILED: SUFFOLK COUNTY CLERK 04/11/2019 11:19 AM NYSCEF DOC. NO. 19 RECEIVED NYSCEF: 04/11/2019 V ersi o n D at e d A pr. 1 0, 2 0 1 9 wit h C ert ai n R e d a cti o ns R e m o v e d P er P arti es' A gr e e m e nt 6 6 0. M c K ess o n’s C S M Ps w er e ri d dl e d wit h fl a ws a n d l o o p h ol es t h at r e n d er e d t h e m s u bst a nti all y i n eff e cti v e. S p e cifi c all y, t h e C S M Ps at v ari o us p oi nts: • Dir e ct e d t h at c ust o m ers’ m o nt hl y t hr es h ol d li mits b e s et b y r ef er e n c e t o c ust o m ers’ pri or or d eri n g v ol u m es, wit h o ut r e q uiri n g i n v esti g ati o n of t h os e v ol u m es’ a p pr o pri at e n ess, eff e cti v el y b uil di n g all pri or di v ersi o n a cti vit y i nt o t h e c o m p a n y’s f ut ur e s hi p m e nts of o pi oi ds t o t h os e c ust o m ers; • All o w e d c ust o m ers t o r es ol v e i n v esti g ati o ns i nt o or d ers i n e x c ess of t h eir m o nt hl y t hr es h ol d a n d i nt o r e q u ests t o i n cr e as e m o nt hl y t hr es h ol ds ( “ T C Rs ”) b y s elf-r e p orti n g t h e a ns w ers t o t hr e e y es or n o q u esti o ns, wit h o ut r e q uiri n g v ali d ati o n of t h os e a ns w ers; • F ail e d t o r e q uir e k e y i n di c at ors of di v ersi o n as p art of t h e c o m p a n y’s d u e dili g e n c e of p h ar m a ci es, i n cl u di n g b ut n ot li mit e d t o o bt ai ni n g pr es cri b er l e v el i nf or m ati o n; • E x e m pt e d s o m e c ust o m ers fr o m s cr uti n y w h o c o nsist e ntl y pl a c e d or d er s in e x c ess of t h eir t hr es h ol d; • Al ert e d c ust o m ers w h e n t h e y w er e n e ari n g t h eir m o nt hl y t hr es h ol d li mit f or o pi oi d pr o d u cts; • F ail e d t o a d e q u at el y d esi g n a n d o p er at e a s yst e m t o dis cl os e s us pi ci o us or d ers t o t h e D E A; a n d • R e q uir e d littl e t o n o dili g e n c e o n c h ai n p h ar m a c y or d ers , s o as t o m ai nt ai n t h es e l ar g e c ust o m er a c c o u nts r e g ar dl ess of t h e c o ns e q u e n c es. 6 6 1. T h e s e a n d ot h er d efi ci e n ci es r es ult e d i n t h e u n e x a mi n e d a n d u nr estr ai n e d fl o w of o pi oi ds t o N e w Y or k r esi d e nts. M c K ess o n’s f ail ur e t o est a blis h eff e cti v e c o ntr ols a g ai nst di v ersi o n is ill ustr at e d b y its d e cisi o n n ot t o r e q uir e, a n d l at er, a dir e cti v e n ot t o o bt ai n, pr es cri b er i nf or m ati o n. M c K ess o n n e v er r e q uir e d p h ar m a ci es t o pr o vi d e pr es cri b er -l e v el dis p e nsi n g d at a w h e n gr a nti n g t hr es h ol d i n cr e as es or i nv esti g ati n g s us pi ci o us or d ers, d es pit e t h e a c k n o wl e d g e m e nt t h at pr es cri b er i nf or m ati o n w as “ k e y ” t o pr e v e nti n g di v ersi o n. c o m p a n y’s o wn M or e o v er , w h e n c o m pli a n c e st aff di d r e c ei v e pr es cri b er -l e v el d at a a n d i d e ntifi e d s us pi ci o ns a b o ut p arti c ul ar p h ar m a ci es b as e d o n d o ct ors f or w h o m t h e y fill e d pr es cri pti o ns , t h e c o m p a n y l a c k e d a n y s yst e m 179 186 of 258 INDEX NO. 400016/2018 FILED: SUFFOLK COUNTY CLERK 04/11/2019 11:19 AM NYSCEF DOC. NO. 19 RECEIVED NYSCEF: 04/11/2019 V ersi o n D at e d A pr. 1 0, 2 0 1 9 wit h C ert ai n R e d a cti o ns R e m o v e d P er P arti es' A gr e e m e nt b y w hi c h it c o ul d i d e ntif y ot h er p h ar m a ci es t h at fill e d pr es cri pti o ns f or t h e s a m e p h ysi ci a ns. Fi n all y, b y l at e 2 0 1 3, M c K ess o n pr o hi bit e d c o m pli a n c e st aff fr o m r e q u esti n g pr es cri b er i nf or m ati o n— d eli b er at el y bli n di n g its elf t o t h at k e y d at a — r es ulti n g i n c o nti n u e d s hi p m e nts of o pi oi ds t o m a n y N e w Y or k p h ar m a ci es t h at t h e c o m p a n y s h o ul d h a v e s cr uti ni z e d d u e t o t h e d o mi n a n c e of s us pi ci o us pr es cri b ers w h os e pr es cri pti o ns w er e b ei n g fill e d i n t h os e l o c ati o ns. 6 6 2. A n ot h er M c K ess o n p oli c y w as t o a v oi d p erf or mi n g a n y dili g e n c e o n c ust o m ers t h at c o nti n u o usl y e x c e e d e d t h eir m o nt hl y t hr es h ol d. T his i nt e nti o n al l a c k of dili g e n c e a p pli e d t o p h ar m a ci es t h at h a d h a d t h eir t hr es h ol ds l o w er e d b y M c K ess o n or t h at h a d b e e n d e e m e d i n eli gi bl e f or f ut ur e t hr es h ol d i n cr e as es. M c K ess o n c o nti n u e d t o s hi p o pi oi ds t o t h es e hi g h-ris k p h ar m a ci es t h at c o nsist e ntl y e x c e e d e d t h eir t hr es h ol ds, c o nti n ui n g t o f ill t h eir or d ers u p t o t h eir t hr es h ol ds wit h o ut a n y dili g e n c e at all . O n e N e w Y or k p h ar m a c y, f or e x a m pl e, w as pl a c e d o n t his e x e m pti o n list t h e s a m e d a y t h at it r e q u est e d a n 8 0 % i n cr e as e i n its o x y c o d o n e t hr es h ol d. W hil e t h at t hr es h ol d i n cr e as e r e q u est w as d e ni e d, t h e p h ar m a c y h a d alr e a d y r e c ei v e d a c u m ul ati v e 4 0 0 % i n cr e as e i n its o x y c o d o n e t hr es h ol d i n t h e si x m o nt hs pri or t o t h e r e q u est. A n d M c K ess o n c o nti n u e d t o s er vi c e t h e p h ar m a c y w hil e o n t h e e x e m pti o n list u ntil m or e t h a n f o ur y e ars l at er, w h e n t he p h ar m a c y a d mitt e d t o i m pr o p erl y r es elli n g o x y c o d o n e 3 0 m g d os es t o a p h ysi ci a n’s offi c e. 6 6 3. M c K ess o n als o e m pl o y e d t h e pr a cti c e of al erti n g c ust o m ers w h e n t h e y w er e a p pr o a c hi n g t h eir t hr es h ol ds, w hi c h h a d a n at ur al t e n d e n c y t o e n c o ur a g e t h e m a ni p ul ati o n of t h e c o m pli a n c e s yst e m. I n d e e d, it a p p e ars t o h a v e ori gi n all y b e e n d esi g n e d f or t h at p ur p os e — w h e n t his p oli c y w as ori gi n all y b ei n g c o nsi d er e d, o n e e m pl o y e e wr ot e t h at M c K ess o n w as “i n t h e b usi n ess t o s ell pr o d u ct ” a n d ar g u e d t h at if a c ust o m er c o ul d b e al ert e d w h e n it a p pr o a c h e d its t hr es h ol d, “ w or k c o ul d b e gi n o n j ustif yi n g a n i n cr e as e i n t hr es h ol d pri or t o a n y l ost s al es. ” O n e of t h e a ut h ors of M c K ess o n’s 2 0 0 8 C S M P r es p o n d e d, t his “i d e a is g o o d. ” 180 187 of 258 INDEX NO. 400016/2018 FILED: SUFFOLK COUNTY CLERK 04/11/2019 11:19 AM NYSCEF DOC. NO. 19 6 6 4. RECEIVED NYSCEF: 04/11/2019 V ersi o n D at e d A pr. 1 0, 2 0 1 9 wit h C ert ai n R e d a cti o ns R e m o v e d P er P arti es' A gr e e m e nt As a r es ult of t his a d v a n c e- w ar ni n g pr a cti c e , M c K ess o n’s hi g h est -v ol u m e o pi oi d c ust o m ers i n N e w Y or k, i n cl u di n g p h ar m a ci es t h at w er e l at er s us p e n d e d, t er mi n at e d, or dis ci pli n e d, w er e pr o a cti v el y c o nt a ct e d b y M c K ess o n’s c o m pli a n c e d e p art m e nt a n d distri b uti o n c e nt er a n d s al es st aff s o t h at t h os e c ust o m ers c o ul d str u ct ur e t h eir or d ers a n d j ustif y t hr es h ol d i n cr e as e r e q u ests, a n d t h er e b y a v oi d s us pi ci o us or d er r e p orti n g a n d a n y a d diti o n al s cr uti n y. M c K ess o n its elf l at er a c k n o wl e d g e d t h at t his s yst e m of w ar ni n g c ust o m ers w h e n t h e y w e r e a p pr o a c hi n g t h eir thr es h ol d cr e at e d t h e “ p er c e pti o n t h at c ust o m ers c o ul d b e st e er e d w h e n a p pr o a c hi n g t h eir t hr es h ol d t o a v oi d o mits, ” a n d p ur p ort e d t o e n d t his pr a cti c e i n A u g ust 2 0 1 3. 6 6 5. Fi n all y, M c K ess o n’s s yst e m f or i d e ntif yi n g a n d r e p orti n g s us pi ci o us or d ers s w u n g fr o m i n ad e q u at e t o i ns cr ut a bl e. B et w e e n 2 0 0 8 a n d 2 0 1 3, M c K ess o n r e p ort e d virt u all y n o s us pi ci o us or d ers t o t h e D E A or t h e St at e . S p e cifi c all y, of t h e 1. 6 milli o n or d ers f or c o ntr oll e d s u bst a n c es pr o c ess e d b et w e e n 2 0 0 8 a n d 2 0 1 3 b y its A ur or a, C ol or a d o Distri b uti o n C e nt er, M c K ess o n r e p ort e d o nl y si xt e e n as s us pi ci o us. 6 6 6. T h e n i n 2 0 1 3, M c K ess o n b e g a n t o r e p ort e v er y or d er pl a c e d i n e x c ess of a c ust o m er’s t hr es h ol d as a s us pi ci o us or d er. I n 2 0 1 5, f or e x a m pl e, M c K ess o n pr o vi de d t h e D E A wit h o v er 2 3 0, 0 0 0 s us pi ci o us or d er r e p orts, or o v er 6 3 0 p er d a y fr o m M c K ess o n al o n e. M c K ess o n’s a ut o m ati c s u b missi o n of e v er y or d er i n e x c ess of a t hr es h ol d wit h o ut a n y r e vi e w t h er e b y s hifte d t h e b ur d e n t o t h e D E A t o d et er mi n e w h et h er t h e or d er w as i n f a ct s us pi ci o us. I n d e e d, M c K ess o n w as w ell a w ar e t h at t his w as n ot a n a d e q u at e s yst e m t o dis cl os e s us pi ci o us or d ers t o t h e D E A, as M c K ess o n h a d pr e vi o usl y r e p ort e d e v er y or d er i n e x c ess of a s p e cifi e d q u a ntit y b ef or e its 2 0 0 8 s ettl e m e nt, a n d at t h at ti m e, w as i nf or m e d t h at “i n u n d ati n g l o c al D E A offi c e[s] ” w as n ot us ef ul. 181 188 of 258 INDEX NO. 400016/2018 FILED: SUFFOLK COUNTY CLERK 04/11/2019 11:19 AM NYSCEF DOC. NO. 19 6 6 7. RECEIVED NYSCEF: 04/11/2019 V ersi o n D at e d A pr. 1 0, 2 0 1 9 wit h C ert ai n R e d a cti o ns R e m o v e d P er P arti es' A gr e e m e nt Wit h r es p e ct t o its c h ai n p h ar m a c y c ust o m ers, M c K ess o n di d al m ost n o d u e dili g e n c e at all, c h o osi n g i nst e a d t o d ef er t o e a c h c h ai n’s c or p or at e offi c e t o s elf -r e g ul at e its i n di vi d u al p h ar m a ci es. M c K ess o n di d s o wit h o ut f ull y c o m pr e h e n di n g, or e v e n r e vi e wi n g, t h e c o m pli a n c e pr o gr a ms p ur p ort e dl y a d o pt e d b y e a c h c h ai n c ust o m er. T his r eli a n c e pr o v e d t o b e mis pl a c e d, as c h ai n p h ar m a ci es ’ o utl ets als o c o ntri b ut e d t o t h e m assi v e fl o w of o pi oi ds t o N e w Y or k r esi d e nts, filli n g t h e pr es cri pti o ns of d o ct ors c h ar g e d wit h r u n ni n g pill mills, a n d ot h er s us pi ci o us a cti viti es . 6 6 8. M c K ess o n a d o pt e d t his “ h a n ds -off ” a p pr o a c h t o its l ar g est c ust o m ers f or o n e r e as o n o nl y— f e ar of l osi n g t h e l ar g e c h ai ns’ b usi n ess. W h e n d e b ati n g w h et h er t o s u bj e ct its l ar g est c h ai n c ust o m er, t o t h e o p er ati o n of its C S M P, a n d d e ci di n g n ot t o, a M c K ess o n e m p l o y e e s ai d t h e c o m p a n y si m pl y h a d t o “fi n d a w a y t o a p p e as e t h e m. ” A n d t h at is e x a ctl y w h at M c K ess o n di d: it f ail e d t o o bt ai n a n y d o c u m e nt ati o n or s p e cifi c i nf or m ati o n a b o ut pr o gr a m, o n w hi c h M c K ess o n w as s u p p os e dl y r el yi n g; it f ail e d t o o bt ai n fr o m d at a fr o m t h e o w n c o m pli a n c e t h e dis p e nsi n g p h ar m a ci es ; a n d it a gr e e d t o a ut o m ati c all y i n cr e as e t hr es h ol ds f or all p h ar m a ci es wit h o ut a n y j ustifi c ati o n or e x pl a n ati o n fr o m , b arri n g “ e xtr a or di n ar y ” i n cr e as es. 2. M c K ess o n ’s F ail u r e t o Eff e cti v el y P r e v e nt Di v e rsi o n i n P r a cti c e 6 6 9. I n a d diti o n t o a d o pti n g i n eff e cti v e (i n d e e d, c o u nt er pr o d u cti v e) a nti - di v ersi o n p oli ci es, M c K ess o n v astl y u n d er -r es o urc e d its c o m pli a n c e d e p art m e nt, assi g n e d u n q u alifi e d a n d u ntr ai n e d p ers o n n el t o i m pl e m e nt t h e s e p oli ci es, r o uti n el y i g n or e d t h e s e p oli ci es i n pr a cti c e, a n d ot h er wis e f ail e d t o t a k e r e as o n a bl e st e ps t o pr e v e nt di v ersi o n. 6 7 0. M c K ess o n ’s l a c k of att e nti o n t o its c o m pli a n c e a n d a nti -di v ersi o n o bli g ati o ns is e vi d e n c e d b y t h e d e mi ni m is r es o ur c es t h e c o m p a n y i n v est e d i n r e g ul at or y st aff. Fr o m 2 0 0 8 t o 2 0 1 2, i m pl e m e nt ati o n of t h e C S M P f or all M c K ess o n p h ar m a c y c ust o m ers a cr oss t h e c o u ntr y w as 182 189 of 258 INDEX NO. 400016/2018 FILED: SUFFOLK COUNTY CLERK 04/11/2019 11:19 AM NYSCEF DOC. NO. 19 RECEIVED NYSCEF: 04/11/2019 V ersi o n D at e d A pr. 1 0, 2 0 1 9 wit h C ert ai n R e d a cti o ns R e m o v e d P er P arti es' A gr e e m e nt l eft t o f o ur r e gi o n al Dir e ct ors of R e g ul at or y Aff airs ( “ D R As ”). E a c h of t h e s e f o ur D R As — a n u m b er t h at gr e w t o si x i n 2 0 1 2 — w as r es p o nsi bl e f or o n b o ar di n g n e w p h ar m a c y c ust o m ers , r e vi e wi n g a n d i n cr e asi n g t hr es h ol ds, a n d c o n d u cti n g all d u e dili g e n c e f or all of t h e p h ar m a ci es a cr oss t h eir r e gi o n, wit h n o ot h er d e di c at e d r e g ul at or y st aff. 6 7 1. T h e D R As t h e ms el v es r e g ul arl y e x pr ess e d t h e n e e d f or a d diti o n al st aff a n d r es o ur c es, c o m pl ai ni n g of b ei n g “s pr e a d t hi n n er a n d t hi n n er ”; o n e e v e n n ot e d t h at as ki n g f or m or e r es o ur c es w as t a nt a m o u nt to “ as ki n g [ M c K ess o n] f or a F err ari. ” U p o n l e ar ni n g i n 2 0 0 8 t h at a c o m p eti n g distri b ut or h a d i n cr e as e d its r e g ul at or y d e p art m e nt t o at l e ast 3 0 e m pl o y e es, a D R A s u g g est e d t h at M c K ess o n s h o ul d hir e a fift h D R A t o o v ers e e c h ai n p h ar m a c y a c c o u nts. N o s uc h p ositi o n w as cr e at e d u ntil fi v e y e ars l at er, i n 2 0 1 3. T h e D R As di d n ot r e c ei v e a n y d esi g n at e d r e g ul at or y st aff t o assist t h e m u ntil 2 0 1 4, a n d t h e tr ai ni n g e v e nt u all y pr o vi d e d t o t h at st aff w as i n a d e q u at e t o all o w t h e m t o p erf or m t h eir j o bs eff e cti v el y. 6 7 2. Als o i n 2 0 1 4, s u p er visi o n o v er r e g ul at or y aff airs s hift e d fr o m t h e s e ni or vi c e pr esi d e nt of distri b uti o n o p er ati o ns, f or w h o m t h e C S M P h a d b e e n j ust o n e of m a n y r es p o nsi biliti es, t o a n e w h e a d of r e g ul at or y a ff airs, f or w h o m o v ersi g ht of t h e C S M P w as a f ull-ti m e j o b. M c K ess o n its elf a c k n o wl e d g e d its f ail ur e t o a p pr o pri at e s uffi ci e nt r es o ur c es t o t h e i m pl e m e nt ati o n of its C S M P, writi n g i n 2 0 1 3 t h at t h e c o m p a n y h a d “si g nifi c a ntl y u n d eri n v est e d ” r el ati v e t o its c o m p etit ors. 6 7 3. I n t h e a bs e n c e of a d e di c at e d r e g ul at or y st aff, M c K ess o n assi g n e d virt u all y all of its fr o nt-li n e c o m pli a n c e f u n cti o ns f or N e w Y or k c ust o m ers t o o p er ati o ns a n d s al es st aff a n d a d mi nistr ati v e assist a nts wit h n o e x p eri e n c e wit h c o ntr oll e d s u bst a n c e r e g ul ati o ns, or i n d e e d a n y c or p or at e c o m pli a n c e e x p eri e n c e at all. T h es e o p er ati o ns a n d a d mi nistr ati v e st aff r e p ort e d dir e ctl y t o t h e E ast R e gi o n’s D R A , w h o hi ms elf h a d n e v er h a d a s p e ci ali z e d r ol e i n r e g ul at or y c o m pli a n c e 183 190 of 258 INDEX NO. 400016/2018 FILED: SUFFOLK COUNTY CLERK 04/11/2019 11:19 AM NYSCEF DOC. NO. 19 RECEIVED NYSCEF: 04/11/2019 V ersi o n D at e d A pr. 1 0, 2 0 1 9 wit h C ert ai n R e d a cti o ns R e m o v e d P er P arti es' A gr e e m e nt pri or t o b ei n g gi v e n t h at j o b. S al es st aff r e p ort e d t o s al es m a n a g e m e nt, a n d r ar el y i nt er a ct e d wit h c o m pli a n c e p ers o n n el at all. 6 7 4. M or e o v er, M c K ess o n pr o vi d e d mi ni m al tr ai ni n g to t h es e o p er ati o ns, a d mi nistr ati v e , a n d s al es p ers o n n el wit h r es p e ct t o t h eir r ol es i n e ns uri n g t h e c o m p a n y’s c o m pli a n c e wit h st at e a n d f e d er al c o ntr oll e d s u bst a n c es l a ws a n d r e g ul ati o ns, i n cl u di n g t h e N Y C S A. S e ni or r e g ul at or y st aff als o di d n ot d o a u dits or e v e n as k f or f e e d b a c k o n t h e C S M Ps fr o m t h es e fr o nt-li n e s al es p ers o n n el. 6 7 5. Fi n all y, as dis c uss e d a b o v e , M c K ess o n’s p oli ci es t as k e d s al es st aff wit h fr o nt-li n e c o m pli a n c e d uti es, wit h o ut pr o vi di n g a n y m e c h a nis m t o e ns ur e t h at t h es e e m pl o y e es’ r es p o nsi bilit y a n d i n c e nti v e t o pr o m ot e s al es di d n ot c o m pr o mis e t h eir a bilit y a n d/ or willi n g n ess t o p erf or m t h eir c o m pli a n c e- r el at e d f u n cti o ns, w h e n d oi n g s o c o ul d r es ult i n t h e l oss of t h os e s al es. N ot s ur prisi n gl y, a distri b uti o n c e nt er s er vi n g N e w Y or k c ust o m ers r e n a m e d t h e C S M P t h e “ C e ntr ali z e d S al es Miti g ati o n Pr o gr a m. ” E v e n M c K ess o n m a n a g e m e nt r e c o g ni z e d t his i n h er e nt pr o bl e m, st ati n g t h at t h e C S M P’s h e a v y r eli an c e o n s al es a n d o p er ati o ns p ers o n n el r ais e d iss u es of “ c o nfli ct of o bj e cti v es ” a n d “ c o m p et e n c y. ” 6 7 6. M c K ess o n’s u n d er- r es o ur c e d, u n d er-q u alifi e d , a n d u ntr ai n e d st aff r o uti n el y b y p ass e d criti c al pr o c e d ur es s et f ort h i n t h e C S M Ps a n d fr e q u e ntl y f ail e d t o o bt ai n a n d m ai nt ai n t h e r e c or ds c all e d f or b y its C S M Ps i n t h e d u e dili g e n c e fil es of its c ust o m ers. 6 7 7. F or e x a m pl e, M c K ess o n e m pl o y e es r e g ul arl y f ail e d t o e ns ur e c o m pl eti o n of e v e n t h e mi ni m al, t hr e e-q u esti o n f or m us e d t o r es ol v e i n q uiri es i nt o or d ers i n e x c ess of t h e c ust o m er’s t hr es h ol d. of o n e of its distri b uti o n c e nt ers s er vi ci n g N e w Y or k f o u n d t h at f e w er t h a n h alf of s u c h s us pi ci o us or d er r e vi e ws w er e pr o p erl y c o m pl et e d. 184 191 of 258 INDEX NO. 400016/2018 FILED: SUFFOLK COUNTY CLERK 04/11/2019 11:19 AM NYSCEF DOC. NO. 19 6 7 8. RECEIVED NYSCEF: 04/11/2019 V ersi o n D at e d A pr. 1 0, 2 0 1 9 wit h C ert ai n R e d a cti o ns R e m o v e d P er P arti es' A gr e e m e nt W h e n c ust o m ers r e q u est e d i n cr e as es i n t h eir t hr es h ol d all o w a n c e f or o pi oi d or d ers, M c K ess o n r o uti n el y a p pr o v e d t h os e i n cr e as es wit hi n d a ys, h o urs , or e v e n mi n ut es, b ef or e a n y i n d e p e n d e nt, dili g e nt i n v esti g ati o n c o ul d p ossi bl y h a v e b e e n c o n d u ct e d, a n d wit h o ut b ei n g pr o vi d e d a n y r e as o n a bl e j ustifi c ati o n. O n m a n y o c c asi o ns, M c K ess o n u n criti c a ll y a n d i m m e di at el y a c c e pt e d t h e m ost p erf u n ct or y e x pl a n ati o ns fr o m its c ust o m ers, s u c h as t h at t h e y w er e e x p eri e n ci n g “i n cr e as e[ d] s al es ” or “i n cr e as e d d e m a n d ,” wit h o ut o bt ai ni n g a n y e vi d e n c e of s u c h i n cr e as es. 6 7 9. M or e o v er, M c K ess o n m a d e it a pr a cti c e t o i n cr e as e c ust o m ers’ t hr es h ol ds t o a n e v e n hi g h er l e v el t h a n r e q u est e d, i n or d er t o all o w t h os e c ust o m ers t o a v oi d f ut ur e t hr es h ol d e v e nt s a n d t h e a d diti o n al c o m pli a n c e i n q uiri es t h at s h o ul d h a v e r es ult e d. 6 8 0. E v e n t h o u g h M c K ess o n’s C S M P r e q uir e d it t o k e e p r e c or ds of e a c h r e q u est f or a t hr es h ol d c h a n g e, M c K ess o n r o uti n el y f ail e d t o c o m pl et e a n d m ai nt ai n t h os e r e c or ds. of o n e of its distri b uti o n c e nt ers s er vi ci n g Ne w Y or k f o u n d t h at a p pr o xi m at el y h alf of its t hr es h ol d c h a n g e r e q u ests w er e i n c o m pl et e. 6 8 1. W h e n M c K ess o n di d c o n d u ct a n y m or e s e ar c hi n g d u e dili g e n c e i n v esti g ati o ns t h a n t h e p erf u n ct or y st e ps dis c uss e d a b o v e, it r o uti n el y f ail e d t o i d e ntif y o b vi o us r e d fl a gs of di v ersi o n, s u c h as: • A p h ar m a c y t h at o bt ai n e d a n i n cr e as e i n its o pi oi ds t hr es h ol d b y citi n g “ gr o wi n g b usi n ess ” fr o m pr es cri b ers M c K ess o n h a d fl a g g e d i n ot h er i nst a n c es as s us pi ci o us, a n d w h o w o ul d all l at er b e arr est e d f or di v ersi o n, o n e of w h o m w as i n di ct e d t w o m o nt hs aft er t h e t hr es h ol d i n cr e as e w as gr a nt e d; • A p h ar m a c y l o c at e d i n t h at s o u g ht a n i n cr e as e of o v er 3, 0 0 0 d os es of o x y c o d o n e d u e t o a n i n cr e as e i n pr es cri pti o ns fr o m a h os pit al l o c at e d i n and • A p h ar m a c y w h os e p h ar m a cist w as pr e vi o usl y dis ci pli n e d f or dis p e nsi n g wit h o ut a pr es cri pti o n, a n d w hi c h M c K ess o n t o o k o n as a n e w c ust o m er wit h o ut n oti n g t his dis ci pli n ar y hist or y or t a ki n g a n y st e ps t o a d dr ess it. 185 192 of 258 INDEX NO. 400016/2018 FILED: SUFFOLK COUNTY CLERK 04/11/2019 11:19 AM NYSCEF DOC. NO. 19 RECEIVED NYSCEF: 04/11/2019 V ersi o n D at e d A pr. 1 0, 2 0 1 9 wit h C ert ai n R e d a cti o ns R e m o v e d P er P arti es' A gr e e m e nt 6 8 2. I n t h e c as es w h er e M c K ess o n’s c o m pli a n c e st aff di d i d e ntif y iss u es wit h a p arti c ul ar p h ar m a c y, t h e c o m p a n y l a c k e d a n y m e c h a nis m t o e ns ur e t h e r et e nti o n a n d s h ari n g of i nf or m ati o n t o i d e ntif y ot h er c ust o m ers wit h r el at e d r e d fl a gs. 6 8 3. F or e x a m pl e, w h e n M c K ess o n i d e ntifi e d s us pi ci o ns a b o ut p arti c ul ar p h ar m a ci es b as e d o n d o ct ors f or w h o m t h e y fill e d pr es cri pti o ns , t h e c o m p a n y l a c k e d an y s yst e m b y w hi c h it c o ul d i d e ntif y ot h er p h ar m a ci es t h at fill e d pr es cri pti o ns f or t h e s a m e p h ysi ci a n. As a r es ult, M c K ess o n c o nti n u e d t o s ell o pi oi ds t o p h ar m a ci es t h at w er e filli n g pr es cri pti o ns f or at l e ast t w o pr a ctiti o n ers M c K ess o n e m pl o y e es h a d i d e ntifi e d as li k el y di v ert ers i n 2 0 1 2 f or si x m or e y e ars, u ntil b ot h w er e e v e nt u all y i n di ct e d i n 2 0 1 8. M c K ess o n’s h e a d of c o m pli a n c e h a d e x pli citl y r e c o g ni z e d t his pr o bl e m at l e ast as e arl y as 2 0 1 2, writi n g t h at M c K ess o n h a d n o s yst e m t o d et e ct t h e “ n u m b er of p h ar m a ci es a p h ysi ci a n ‘ pill mill’ is usi n g ”— b ut t h e c o m p a n y di d n ot hi n g t o r e m e d y t his k e y f ail ur e i n its c o m pli a n c e s yst e m. M or e o v er, as dis c uss e d a b o v e , M c K ess o n st o p p e d as ki n g f or pr es cri b er i nf or m ati o n alt o g et h er b y l at e 2 0 1 3, willf ull y bli n di n g its elf t o k e y e vi d e n c e of di v ersi o n. 6 8 4. Fi n all y, e v e n w h e n M c K ess o n a ct u all y di d i d e ntif y c ust o m ers’ o b vi o us r e d fl a gs, it fr e q u e ntl y f ail e d t o i m pl e m e nt s us p e nsi o ns or t er mi n ati o ns. E x a m pl es of s u c h c ust o m ers i n cl u d e: • A p h ar m a c y t h at s u b mitt e d a r e q u est t o i n cr e as e its o x y c o d o n e t hr es h ol d fr o m d os es, a n 8 0 % i n cr e as e, w h e n it h a d alr e a d y r e c e i v e d a c u m ul ati v e 4 0 0 % i n cr e as e i n its o x y c o d o n e t hr es h ol d i n t h e si x m o nt hs pri or t o t h e r e q u est . W hil e c o m pli a n c e st aff r ej e ct e d t h e r e q u est, n oti n g t h at it w as “ at y pi c al of a r et ail p h ar m a c y, ” M c K ess o n c o nti n u e d t o s er vi c e t h e p h ar m a c y f or at l e ast f o ur m or e y e ars . S u bs e q u e ntl y a n ot h er distri b ut or i nf or m e d M c K ess o n t h at it h a d s us p e n d e d t h e s a m e p h ar m a c y f or filli n g s us pi ci o us or d ers, b ut still M c K ess o n t o o k n o a cti o n; • A p h ar m a c y t h at a d mitt e d i n a n o n b o ar di n g q u esti o n n air e f or m t h at a n ot h er distri b ut or h a d s us p e n d e d it fr o m or d eri n g c o ntr oll e d s u bst a n c es, wit h M c K ess o n m ai nt ai ni n g t h e p h ar m a c y as a c ust o m er; • A p h ar m a c y t h at w as n ot e d f or filli n g pr es cri pti o ns f or a d o ct or, l at er i n di ct e d, w h o w as l o c at e d a w a y fr o m t h e p h ar m a c y . M c K ess o n t o o k n o a cti o n; 186 193 of 258 INDEX NO. 400016/2018 FILED: SUFFOLK COUNTY CLERK 04/11/2019 11:19 AM NYSCEF DOC. NO. 19 RECEIVED NYSCEF: 04/11/2019 V ersi o n D at e d A pr. 1 0, 2 0 1 9 wit h C ert ai n R e d a cti o ns R e m o v e d P er P arti es' A gr e e m e nt • A p h ar m a c y t h at h a d e x c e e d e d its t hr es h ol d of o x y c o d o n e 3 0 m g a n d fill e d pr es cri pti o ns f or t hr e e d o ct ors M c K ess o n k n e w t o b e s us pi ci o us. A M c K ess o n e m pl o y e e n ot e d t h at t h e p h ar m a c y s h o ul d pr o b a bl y b e s us p e n d e d fr o m or d eri n g c o ntr oll e d s u bst a n c es, b ut M c K ess o n t o o k n o s u c h a cti o n; • A p h ar m a c y t h at or d er e d o nl y o x y c o d o n e a n d r ef us e d t o pr o vi d e t h e dis p e nsi n g d at a r e q u est e d b y c o m pli a n c e st aff, a n d y et c o nti n u e d as a M c K ess o n c ust o m er; • A p h ar m a c y t h at s o u g ht t o m or e t h a n d o u bl e its t hr es h ol d f or o x y c o d o n e b as e d al m ost e ntir el y o n pr es cri pti o ns fr o m a si n gl e d o ct or a n d his affili at e d n urs e pr a ctiti o n er, w h o w er e b ot h l at er arr est e d , a nd c o nti n u e d as a M c K ess o n c ust o m er ; and • A p h ar m a c y t h at w as i d e ntifi e d as s us pi ci o us b e c a us e it fill e d f or a d o ct or w h o wr ot e a l ar g e q u a ntit y of pr es cri pti o ns f or o x y c o d o n e 3 0 m g. W hil e a M c K ess o n e m pl o y e e c o n cl u d e d t h at t h e d o ct or w as a “ g o o d Dr. ”, t h e d o ct or w as l at er s e nt e n c e d t o s e v e n y e ars i n pris o n f or ill e g all y pr es cri bi n g o pi oi ds. O n e of t his d o ct or’s p ati e nts, w h o di e d of a n o v er d os e, w as a N e w Y or k r esi d e nt. 6 8 5. E v e n w h er e M c K ess o n di d bl o c k c ust o m ers’ or d ers a n d r e p ort t h e m as s us pi ci o us t o t h e D E A, it r o uti n el y t o o k n o st e ps t o s us p e n d or t er mi n at e t h os e c ust o m ers p e n di n g f urt h er i n v esti g ati o n, a n d i nst e a d si m pl y all o w e d t h e m t o c o nti n u e r e c ei vi n g t h eir t hr es h ol d a m o u nt of o pi oi ds m o nt h aft er m o nt h t h er e aft er, r e g ar dl ess of w h et h er t h e c ust o m er c o nti n u e d t o m a k e a d diti o n al s us pi ci o us or d ers. 6 8 6. F or e x a m pl e, b et w e e n 2 0 1 1 a n d 2 0 1 7, M c K ess o n s u b mitt e d t w el v e or m ore o pi oi d - r el at e d S O Rs f or at l e ast o n e y e ar f or 2 4 5 disti n ct p h ar m a ci es, r e pr es e nti n g o n e o pi oi d- r el at e d S O R e v er y m o nt h f or m or e t h a n t e n p er c e nt of its N e w Y or k St at e p h ar m a ci es. Of t h es e p h ar m a ci es, M c K ess o n s u b mitt e d o pi oi d-r el at e d S O Rs r o u g hl y t wi c e a m o nt h f or a f ull y e ar ( 2 4 S O Rs i n t ot al p er y e ar) f or 1 3 3 disti n ct p h ar m a ci es. D uri n g t h e first y e ar i n w hi c h M c K ess o n s e nt at l e ast t w o o pi oi d- r el at e d S O Rs p er m o nt h, t h os e p h ar m a ci es e x hi bit e d s e v er al t ellt al e r e d fl a gs. 6 8 7. S p e cifi c all y, m or e t h a n h alf of t h o s e p h ar m a ci es: ( a) e x c e e d e d t h e 9 0t h p er c e ntil e i n t h e ( e ntir e) st at e i n t er ms of v ol u m e of o x y c o d o n e s hi p p e d; ( b) ex c e e d e d t h e 9 0 t h p er c e ntil e i n t h e ( e ntir e) st at e i n t er ms of n u m b er of o x y c o d o n e or d ers; a n d ( c) fill e d o v er o n e h u n dr e d o pi oi d 187 194 of 258 INDEX NO. 400016/2018 FILED: SUFFOLK COUNTY CLERK 04/11/2019 11:19 AM NYSCEF DOC. NO. 19 RECEIVED NYSCEF: 04/11/2019 V ersi o n D at e d A pr. 1 0, 2 0 1 9 wit h C ert ai n R e d a cti o ns R e m o v e d P er P arti es' A gr e e m e nt pr es c ri pti o ns i n a y e ar— i n ot h er w or ds, m or e t h a n t w o o pi oi d pr es cri pti o ns p er w e e k— b y o n e or m or e pr es cri b ers l at er i n di ct e d or c o n vi ct e d b y l a w e nf or c e m e nt of m e di c all y u n n e c ess ar y pr es cri bi n g, o pi oi d di v ersi o n , or r el at e d cri m es. 6 8 8. F oll o wi n g t h e first y e ar i n w hi c h M c K ess o n s u b mitt e d 2 4 or m or e o pi oi d -r el at e d S O Rs f or a y e ar, M c K ess o n c o nti n u e d t o s hi p t o t h es e p h ar m a ci es, o n a v er a g e, f or n e arl y t hr e e y e ars . I n f a ct, as of 2 0 1 8, it a p p e ars t h at M c K ess o n is still s hi p pi n g t o 1 1 6 of t h es e p h ar m a ci es, or 7 7 % of t h e gr o u p. 6 8 9. M or e o v er, as of 2 0 1 8 , 6 7 % of t h es e p h ar m a ci es h a d fill e d pr es cri pti o ns b y o n e or m or e pr es cri b ers l at er i n di ct e d or c o n vi ct e d of o pi oi d- r el at e d cri m es. I n d e e d, so m e of t h es e p h ar m a ci es h a d a m aj orit y of t h eir o pi oi d pr es cri pti o ns writt e n b y pr e s cri b ers w h o w er e l at er i n di ct e d or c o n vi ct e d. 6 9 0. E v e n w ors e t h a n its r e c or d i n d e ali n g wit h p h ar m a ci es it di d i d e ntif y s us pi ci o us or d ers f or, t h o u g h, is M c K ess o n’s p att er n of f aili n g t o e v e n i d e ntif y a n d bl o c k as s us pi ci o us a n y or d ers at all f or p h ar m a ci es t h at p ersist e ntl y dis pl a y e d r e d fl a gs of di v ersi o n. 6 9 1. F or e x a m pl e, b et w e e n 2 0 0 8 a n d 2 0 1 3, M c K ess o n s hi p p e d t o 1 4 5 p h ar m a ci es t h at e x c e e d e d t h eir m o nt hl y t hr es h ol d f or a n o pi oi d or d er at l e ast t w el v e ti m es i n a y e ar, w hil e f aili n g t o i d e ntif y a si n gl e s us pi ci o us or d er. M c K ess o n c o nti n u e d t o s hi p t o t h es e p h ar m a ci es f or, o n a v er a g e , m or e t h a n si x y e ars. 6 9 2. • T hr e e e x a m pl es fr o m t his gr o u p of M c K ess o n’s m ost at -ris k p h ar m a ci es st a n d o ut: M c K ess o n E x e m pl a r P h a r m a c y 1 , l o c at e d i n N e w Y or k C o u nt y, r e c ei v e d c o n c urr e nt o pi oi d s hi p m e nts fr o m t h e t o p f o ur distri b ut ors b et w e e n 2 0 1 0 a n d 2 0 1 7, wit h s hi p m e nts fr o m M c K ess o n b e gi n ni n g i n 2 0 1 2. B et w e e n 2 0 1 0 a n d 2 0 1 5, it c o nsist e ntl y e x c e e d e d t h e 9 0t h p er c e ntil e i n t h e S t at e f or n u mb er of o pi oi d or d ers a n d v ol u m e s hi p p e d, wit h o x y c o d o n e -s p e cifi c or d e rs a n d v ol u m es s ur p assi n g t h e 9 7t h p er c e ntil e. I n f a ct, it w as t h e t o p p h ar m a c y f or o x y c o d o n e s hi p m e nts (r el ati v e t o all c o ntr oll e d s u bst a n c es) i n N e w Y or k 188 195 of 258 INDEX NO. 400016/2018 FILED: SUFFOLK COUNTY CLERK 04/11/2019 11:19 AM NYSCEF DOC. NO. 19 RECEIVED NYSCEF: 04/11/2019 V ersi o n D at e d A pr. 1 0, 2 0 1 9 wit h C ert ai n R e d a cti o ns R e m o v e d P er P arti es' A gr e e m e nt C o u nt y i n 2 0 1 1, t h o u g h n o S O R s w er e iss u e d b y a n y of t h e distri b ut ors at t h e ti m e. W hil e M c K ess o n di d e v e nt u all y iss u e 5 0 7 S O R s f or t his p h ar m a c y b et w e e n 2 0 1 3 a n d 2 0 1 6, i n e a c h of t h es e y e ars, t h e p h ar m a c y’s m e di a n M M E p er d a y f or pr es cri pti o ns e x c e e d e d t h e 9 6t h p er c e ntil e f or t h e S t at e, wit h a m e di a n M M E p er d a y v ol u m e r a n gi n g fr o m 9 0- 1 4 4 M M E p er d a y . • M c K ess o n E x e m pl a r P h a r m a c y 2 , l o c at e d i n S uff ol k C o u nt y, r e c ei v e d o pi oi d s hi p m e nts fr o m b ot h M c K ess o n a n d C ar di n al b et w e e n 2 0 1 2 a n d 2 0 1 7, fr e q u e ntl y e x c e e di n g t h e 9 5 t h p er c e ntil e f or v ol u m e of s hi p m e nts of o x y c o d o n e i n N e w Y or k St at e. B et w e e n 2 0 1 3 a n d 2 0 1 7, t h e m e di a n M M E p er d a y f or t h e s e pr es cri pti o ns e x c e e d e d t h e 9 7t h p er c e ntil e, wit h a n M M E r a n gi n g fr o m 9 0 t o 1 3 5. F urt h er m or e, c as h p a y m e nt s e x c e e d e d t h e 8 7t h p er c e n til e i n t h e S t at e wit h y e arl y t ot als as hi g h as 3 8 % of t ot al p a y m e nts. W hil e M c K ess o n di d iss u e or d er o mits i n t h e first f o ur y e ars, it c o nti n u e d t o s hi p o v er 1 2, 0 0 0 gr a ms of o pi oi ds i n s u bs e q u e nt y e ars . 189 196 of 258 INDEX NO. 400016/2018 FILED: SUFFOLK COUNTY CLERK 04/11/2019 11:19 AM NYSCEF DOC. NO. 19 RECEIVED NYSCEF: 04/11/2019 V ersi o n D at e d A pr. 1 0, 2 0 1 9 wit h C ert ai n R e d a cti o ns R e m o v e d P er P arti es' A gr e e m e nt • M c K ess o n E x e m pl a r P h a r m a c y 3 is l o c at e d i n Os w e g o C o u nt y. B et w e e n 2 0 1 1 a n d 2 0 1 7, M c K ess o n iss u e d o mits a n d 4 9 6 o pi oi d- r el at e d S O Rs f or t his p h ar m a c y, y et c o nti n u e d t o s hi p o pi oi ds t o t h e p h ar m a c y. I n f a ct, f or s e v er al y e ars, t his p h ar m a c y r e c ei v e d t h e l ar g est n u m b er ( 1 0 0t h p er c e ntil e) of or d ers a n d v ol u m e of s hi p m e nts f or b ot h all o pi oi ds a n d o x y c o d o n e -s p e cifi c or d ers a n d s hi p m e nts i n t h e c o u nt y; m e a n w hil e, it e x c e e d e d t h e 9 8t h p er c e ntil e f or st at e wi d e or d ers. I n 2 0 1 6 a n d 2 0 1 7, d o ct or s h o p pi n g r e a c h e d t h e 9 2 n d p er c e ntil e , wit h 6 0 % of p ati e nts h a vi n g fill e d pr es cri pti o ns wit h t hr e e or m or e d o ct ors. 190 197 of 258 INDEX NO. 400016/2018 FILED: SUFFOLK COUNTY CLERK 04/11/2019 11:19 AM NYSCEF DOC. NO. 19 RECEIVED NYSCEF: 04/11/2019 V ersi o n D at e d A pr. 1 0, 2 0 1 9 wit h C ert ai n R e d a cti o ns R e m o v e d P er P arti es' A gr e e m e nt 6 9 3. I n e a c h of t h es e c as es, i nst e a d of s us p e n di n g or t er mi n ati n g t h es e p h ar m a ci es, M c K ess o n c o nti n u e d t o s u p pl y t h e m wit h hi g h v ol u m es of o pi oi ds, i n m a n y c as es f or y e ars aft er t h e ris k of di v ersi o n t h e y p os e d s h o ul d h a v e b e e n o b vi o us. 6 9 4. T h e c o m p a n y w as e x pli citl y p ut o n n oti c e o n m ulti pl e o c c asi o ns b y g o v er n m e nt a g e n ci es t h at it w as n ot f ulfilli n g its d uti es, i n cl u di n g t h os e it o w e d t o Pl ai ntiff. 6 9 5. I n 2 0 0 8, M c K ess o n e nt er e d i nt o a s ettl e m e nt wit h t h e D E A b as e d o n t h at a g e n c y’s i n v esti g ati o n of t h e c o m p a n y’s c o m pli a n c e f ail ur es. S h ortl y t h er e aft er, M c K ess o n’s h a d a n i niti al dis c ussi o n of t h e s ettl e m e nt wit h t h e D E A a n d r es ults of its i nt er n al a u diti n g, w hi c h r e v e al e d gl ari n g o missi o ns, i n cl u di n g: • S o m e c ust o m ers h a d “ n ot y et b e e n assi g n e d t hr es h ol ds i n t h e s yst e m t o fl a g l ar g e s hi p m e nts of c o ntr oll e d s u bst a n c es f or r e vi e w ”; • “ D o c u m e nt ati o n e vi d e n ci n g n e w c ust o m er d u e dili g e n c e i n c o m pl et e ”; 191 198 of 258 w as INDEX NO. 400016/2018 FILED: SUFFOLK COUNTY CLERK 04/11/2019 11:19 AM NYSCEF DOC. NO. 19 RECEIVED NYSCEF: 04/11/2019 V ersi o n D at e d A pr. 1 0, 2 0 1 9 wit h C ert ai n R e d a cti o ns R e m o v e d P er P arti es' A gr e e m e nt 199 of 258 INDEX NO. 400016/2018 FILED: SUFFOLK COUNTY CLERK 04/11/2019 11:19 AM NYSCEF DOC. NO. 19 7 0 0. RECEIVED NYSCEF: 04/11/2019 V ersi o n D at e d A pr. 1 0, 2 0 1 9 wit h C ert ai n R e d a cti o ns R e m o v e d P er P arti es' A gr e e m e nt T h o u g h A m eris o ur c e h as r e pr es e nt e d t h at B ell c o i nt e gr ati o n w as c o m pl et e as of S e pt e m b er 3 0, 2 0 0 8, B ell c o e m pl o y e es a n d a c c o u nts w er e s e p ar at e fr o m t h os e of A m eris o ur c e u ntil i n or ar o u n d N o v e m b er 2 0 1 5. 1. A m e ris o u r c e ’s Fl a w e d W ritt e n P oli ci es E n a bl e d O pi oi d Di v e rsi o n 7 0 1. A m eris o ur c e’s writt e n p oli ci es f or c o m pli a n c e wit h t h e N Y C S A w er e a n d ar e c o nt ai n e d wit h i n its Di v ersi o n C o ntr ol Pr o gr a m a n d its Or d er M o nit ori n g Pr o gr a m ( “ O M P ”). T h e pr o gr a ms ar e a d mi nist er e d b y A m eris o ur c e ’s C or p or at e S e c urit y a n d R e g ul at or y Aff airs ( “ C S R A ”) st aff. Fr o m 2 0 0 7 t o 2 0 1 5, t h e pr o gr a m’s s p e cifi cs w er e s c att er e d t hr o u g h a s eri es of p oli c y a n d pr o c e d ur e d o c u m e nts, w hi c h w er e n ot u nif or m f or B ell c o a n d A m eris o ur c e . A m eris o ur c e i m pl e m e nt e d a r e vis e d Di v ersi o n C o ntr ol Pr o gr a m i n 2 0 1 5 a n d i nt o 2 0 1 6. 7 0 2. A m eris o ur c e c o m pli a n c e p oli ci es ar e fl a w e d fr o m t h e p oi nt of i niti al n e w c ust o m er o n b o ar di n g. Si n c e 2 0 0 7, A m eris o ur c e h as g e n er all y r e q uir e d a c ust o m er q u esti o n n air e, a sit e visit, li c e ns e v erifi c ati o n, a n d o nli n e i n v esti g ati o n as p art of its n e w c ust o m er d u e dili g e n c e pr o c ess. A c e ntr al c o m p o n e nt of A m eris o ur c e’s n e w c ust o m er pr o c e d ur e is its R et ail P h ar m a c y Q u esti o n n air e ( “ 5 9 0 F or m ”), w hi c h is c o m pl et e d b y t h e p h ar m a c y o w n er t o g et h er wit h a n A m eris o ur c e r e pr es e nt ati v e d uri n g a n o n-sit e visit. T h e f or m as ks f or i nf or m ati o n a b o ut ot h er distri b ut ors, dis ci pli n ar y hist or y, c ust o m er p a y m e nt m et h o ds, p er c e nt a g es of c o ntr oll e d s u bst a n c es, us a g e n u m b ers f or s p e cifi c hi g h ris k dr u gs, a n d t o p pr es cri b ers of o pi oi ds, a m o n g ot h er q u esti o ns. T h o u g h t h e f or m r e q u ests i nf or m ati o n a b o ut pr es cri bi n g p h ysi ci a ns, it is n ot A m eris o ur c e’s p oli c y t o p erf or m n e ws s e ar c h es o n t h os e pr es cri b ers as p art of t h e n e w c ust o m er pr o c e d ur e. 7 0 3. St aff r e vi e wi n g t h e f or m h a v e hi g h b e n c h m ar ks f or t h es e n u m b ers b ef or e c o nsi d eri n g t h e m r e d fl a gs. F or e x a m pl e, c as h p a y m e nts c o ul d c o m pris e u p t o 193 200 of 258 of p a y m e nts FILED: SUFFOLK COUNTY CLERK 04/11/2019 11:19 AM NYSCEF DOC. NO. 19 INDEX NO. 400016/2018 RECEIVED NYSCEF: 04/11/2019 201 of 258 INDEX NO. 400016/2018 FILED: SUFFOLK COUNTY CLERK 04/11/2019 11:19 AM NYSCEF DOC. NO. 19 RECEIVED NYSCEF: 04/11/2019 V ersi o n D at e d A pr. 1 0, 2 0 1 9 wit h C ert ai n R e d a cti o ns R e m o v e d P er P arti es' A gr e e m e nt a n d t h e “ F ail S af e ”, T o b e h el d f or f urt h er r e vi e w, a n or d er m ust e x c e e d eit h er b ot h of t h e first t w o p ar a m et ers or t h e F ail S af e. T his crit eri a d o es n ot f ulfill A m eris o ur c e’s o bli g ati o ns u n d er t h e N Y C S A, w hi c h br o a dl y d efi n es s us pi ci o us or d ers t o i n cl u d e “ or d ers of u n us u al si z e, or d ers d e vi ati n g s u bst a nti all y fr o m a n or m al p att er n, a n d or d ers of u n us u al fr e q u e n c y ” — b e n c h m ar ks t h at ar e disj u n cti v e. B y li miti n g t h e or d ers e v e n h el d f or r e vi e w, A m eris o ur c e’s p oli c y d o es n ot f ulfill its o bli g ati o n t o i d e ntif y e v e n or d ers of i nt er e st, m u c h l ess s us pi ci o us or d ers. 7 0 8. M ost fl a g g e d or d ers ar e first r e vi e w e d at t h e distri b uti o n c e nt er. T h er e, t h e “ R es p o nsi bl e P ers o n i n C h ar g e ” c a n pr o c ess t h e or d er, r ej e ct it as a n err or, r ej e ct a n d r e p ort it as s us pi ci o us, or es c al at e it t o t h e Di v ersi o n C o ntr ol T e a m. T h o u g h t h e distri b uti o n c e nt er d o es n ot h a v e a c c ess t o t h e f ull r a n g e of i nf or m ati o n a n d t o ols, s u c h as t h e c ust o m er’s 5 9 0 f or m a n d d u e dili g e n c e fil e, it h as t h e a ut h orit y t o pr o c ess or d ers f or r e as o ns t h at w o ul d s e e m t o r el y o n s u c h i nf or m ati o n, i n cl u di n g “ k n o wl e d g e s p e cifi c t o t h e c ust o m er. ” 2. A m e ris o u r c e ’s F ail u r e t o Eff e cti v el y P r e v e nt Di v e rsi o n i n P r a cti c e 7 0 9. At all r el e v a nt ti m es, A m eris o ur c e f ail e d t o e m pl o y s uffi ci e nt n u m b ers of q u alifi e d c o m pli a n c e st aff t o i m pl e m e nt t h es e p oli ci es, f ail e d t o e ns ur e t h os e c o m pli a n c e st aff w er e m e eti n g A m eris o ur c e’s a nti -di v ersi o n d uti es, a n d f ail e d t o e nf or c e e v e n t h e d ef e cti v e p oli ci es it h a d i n pl a c e. 7 1 0. A m o n g ot h er d efi ci e n ci es, A m eris o ur c e f ail e d t o s uffi ci e ntl y st aff its c o m pli a n c e d e p art m e nts. F or e x a m pl e, fr o m 2 0 0 7 t o 2 0 1 5, B ell c o h a d o nl y t w o e m pl o y e es d e di c at e d t o fr o ntli n e di v ersi o n c o ntr ol, a cl er k a n d a s u p er vis or. T o g et h er, t h es e st aff m e m b ers w er e r es p o nsi bl e f or p erf or mi n g d u e dili g e n c e o n all pr os p e cti v e n e w c ust o m ers, s etti n g n e w c ust o m ers at t h e a p pr o pri at e t ol er a n c e l e v el, d oi n g m o nt h l y r e vi e ws of c urr e nt c ust o m ers, m o nit ori n g a n d r e vi e wi n g 195 202 of 258 INDEX NO. 400016/2018 FILED: SUFFOLK COUNTY CLERK 04/11/2019 11:19 AM NYSCEF DOC. NO. 19 RECEIVED NYSCEF: 04/11/2019 V ersi o n D at e d A pr. 1 0, 2 0 1 9 wit h C ert ai n R e d a cti o ns R e m o v e d P er P arti es' A gr e e m e nt fl a g g e d or d ers of e xisti n g c ust o m ers, r es p o n di n g t o t hr es h ol d iss u es a n d a dj ust m e nt r e q u ests, a n d e x e c uti n g a p orti o n of sit e visits, as r e q uir e d. D uri n g t his p eri o d, t h e B ell c o ar m of A m eris o ur c e s er v e d o v er c ust o m ers n ati o n wi d e, i n cl u di n g o v er i n N e w Y or k al o n e . Wit h a t e a m of o nl y t w o r es p o nsi bl e f or t h o us a n ds of c ust o m ers, it is u ns ur prisi n g t h at B ell c o f ail e d i n its a nti di v ersi o n o bli g ati o ns. 7 1 1. Si n c e t h e i nt e gr ati o n of B ell c o i nt o A m eris o ur c e a n d t h e r e v a m p of its Di v ersi o n C o ntr ol Pr o gr a m i n 2 0 1 5, t h e c o m p a n y h as i n cr e as e d a nti-di v ersi o n st affi n g , b ut h as n ot si g nifi c a ntl y i n cr e as e d t h e n u m b er of f ull y tr ai n e d gr o u n d l e v el e m pl o y e es. Si n c e t h at ti m e, A m eris o ur c e h as m ai nt ai n e d o nl y fi v e t o s e v e n fr o nt-li n e e m pl o y e es o n its Di v ersi o n C o ntr ol T e a m , r es p o nsi bl e f or r e vi e wi n g n e w c ust o m ers a n d m o nit ori n g its e xisti n g 7 1 2. c ust o m ers. I n a 2 0 1 5 r e vi e w b y a n e xt er n al c o ns ult a nt of Am eris o ur c e ’s C S R A d e p art m e nt, t h e c o ns ult a nt i d e ntifi e d b ot h a l a c k of f or m al tr ai ni n g a n d e m pl o y e e w or kl o a ds as w e a k n ess es i n t h e c o m pli a n c e pr o gr a m. 7 1 3. M a n y of A m eris o ur c e ’s c o m pli a n c e vi ol ati o ns b e gi n wit h its n e w c ust o m er p oli c y. T h e pr o c ess r eli es h e a vil y o n t h e c ust o m er 5 9 0 F or m, gi v e n t h at A m eris o ur c e o nl y r e q u ests dis p e nsi n g i nf or m ati o n fr o m n e w c ust o m ers w h e n it alr e a d y k n o ws of p ot e nti al iss u es. F or e x a m pl e, dis p e nsi n g d at a w as r e q u est e d r e c e ntl y i n c o nsi d eri n g c ust o m ers m o vi n g fr o m distri b ut or M orris & Di c ks o n C o m p a n y —i n cl u di n g c ust o m ers t h at pr o m pt e d a D E A i n v esti g ati o n b e c a us e of t h eir hi g h- v ol u m e o pi oi d p ur c h asi n g. 196 203 of 258 INDEX NO. 400016/2018 FILED: SUFFOLK COUNTY CLERK 04/11/2019 11:19 AM NYSCEF DOC. NO. 19 7 1 4. RECEIVED NYSCEF: 04/11/2019 V ersi o n D at e d A pr. 1 0, 2 0 1 9 wit h C ert ai n R e d a cti o ns R e m o v e d P er P arti es' A gr e e m e nt D es pit e t h e 5 9 0 F or m b ei n g s o criti c al t o u n d erst a n di n g its c ust o m ers a n d e ns uri n g it c a n f ulfill its r e g ul at or y o bli g ati o ns, a n d d es pit e n u m er o us ot h er A m eris o ur c e pr o c e d ur es r el yi n g o n r e vi e wi n g or u p d ati n g t his f or m, A m eris o ur c e h as h a d si g nifi c a nt iss u es r el at e d t o f aili n g t o p erf or m e v e n t his b as eli n e s cr e e ni n g. 7 1 5. In M a y 2 0 1 6, t h e c o m p a n y b e g a n a pr oj e ct t o c o m pil e missi n g d u e dili g e n c e d o c u m e nts, i n cl u di n g 5 9 0 F or ms, f or all A m eris o ur c e r et ail c ust o m ers. A m eris o ur c e ulti m at el y dis c o v er e d . 7 1 6. As a n ot h er e x a m pl e, B ell c o G e n eri cs c ust o m ers r e g ul arl y c o m pl et e d t h e 5 9 0 F or m i n d e p e n d e ntl y, s u b mitt e d it t o B ell c o, a n d w er e o n b o ar d e d t h er e aft er wit h o ut r e c ei vi n g a sit e visit. Fi n all y r e c o g ni zi n g t his pri or pr a cti c e as hi g h- ris k a n d a g ai nst its o w n writt e n p oli ci es , i n or ar o u n d S e pt e m b er 2 0 1 7, A m eris o ur c e d e ci d e d t o s us p e n d t h os e c ust o m ers fr o m c o ntr oll e d s u bst a n c es p ur c h asi n g w hil e it w e nt b a c k t o d o sit e visits a n d pr o p er d u e dili g e n c e o n t h es e c ust o m ers. T h at pr oj e ct, t o o, r e m ai ns i n c o m pl et e. 7 1 7. Disj u n cti o n b et w e e n A m eris o ur c e a n d B ell c o h as l e d t o a d diti o n al f ail ur es. U ntil s yst e m i nt e gr ati o n i n or ar o u n d N o v e m b er 2 0 1 5, st aff h a d n o s yst e m ati c w a y of i d e ntif yi n g d u al c ust o m ers. T h o u g h di v ersi o n st aff at B ell c o w o ul d r e a c h o ut t o c o u nt er p arts at A m eris o ur c e w he n o n b o ar di n g a n e w c ust o m er or r e vi e wi n g a h el d or d er, a n d vi c e v ers a, t h es e st aff m e m b ers di d n ot h a v e dir e ct a c c ess t o t h e c ust o m er’s hist or y, t h us pr e v e nti n g a pr o p er r e vi e w a n d e v al u ati o n of t h e 197 204 of 258 INDEX NO. 400016/2018 FILED: SUFFOLK COUNTY CLERK 04/11/2019 11:19 AM NYSCEF DOC. NO. 19 RECEIVED NYSCEF: 04/11/2019 V ersi o n D at e d A pr. 1 0, 2 0 1 9 wit h C ert ai n R e d a cti o ns R e m o v e d P er P arti es' A gr e e m e nt c ust o m er’s li k eli h o o d of di v ersi o n . T h e e xt er n al 2 0 1 5 r e vi e w of t h e C S R A d e p art m e nt als o i d e ntifi e d t his iss u e, r e c o m m e n di n g i m pr o v e m e nts t o t h e a c q uisiti o n i nt e gr ati o n pr o cess. 7 1 8. T h e l a c k of a n i nt e gr at e d s yst e m als o m e a nt t h at t hr es h ol ds w er e n ot c o or di n at e d b et w e e n A m eris o ur c e a n d B ell c o at a n y p oi nt . As a r es ult, a d u al c ust o m er c o ul d h a v e hi g h t hr es h ol ds s et wit h b ot h, c o ul d b e e x c e e di n g b ot h t hr es h ol ds, or e v e n h a vi n g its t hr es h ol d p eri o di c all y i n cr e as e d wit h b ot h, wit h o ut d et e cti o n. 7 1 9. pr e v e nt e d I n or ar o u n d A pril 2 0 1 3, A m eris o ur c e i m pl e m e nt e d a p oli c y f or d u al c ust o m ers t h at b ot h A m eris o ur c e a n d B ell c o fr o m s u p pl yi n g c o ntr oll e d s u bst a n c es t o t h e s a m e c ust o m er . I m pl e m e nt ati o n, h o w e v er, w as pr o bl e m ati c. I n o n e e x a m pl e, a p h ar m a c y t h at w as s u p p os e d t o b e li mit e d t o B ell c o f or c o ntr oll e d s u bst a n c es or d eri n g w as still a bl e t o s e e s o m e Cl ass II dr u gs fr o m its A m eris o ur c e c at al o g. F urt h er d e m o nstr ati n g t h e l a c k of s h ar e d i nf or m ati o n b et w e e n A m eris o ur c e a n d B ell c o e m pl o y e es, t w o st aff m e m b ers i n c orr e ctl y c o nfir m e d t h at t h e a c c o u nt w as pri m ar y wit h A m eris o ur c e, n ot B ell c o, b ef or e t h e iss u e w as r es ol v e d. 7 2 0. E v e n n o w, B ell c o a c c o u nts r e m ai n p arti c ul arl y pr o bl e m ati c b e c a us e 7 2 1. W h e n a n or d er is tri g g er e d f or r e vi e w, A m eris o ur c e ’s Di v ersi o n C o ntr ol T e a m c a n m a k e t hr e e p ossi bl e a dj u di c ati o ns: ( 1) r ej e ct t h e or d er a n d r e p ort it as s us pi ci o us t o t h e D E A ; ( 2) r ej e ct as a n a d mi nistr ati v e err or; or ( 3) r el e as e a n d pr o c ess t h e or d er. I n pr a cti c e, u n d er A m eris o ur c e’s s yst e m, o nl y a s m all p er c e nt a g e of or d ers fl a g g e d f or r e vi e w ar e c a n c ell e d, a n d e v e n f e w er ar e d e e m e d s us pi ci o us. 198 205 of 258 INDEX NO. 400016/2018 FILED: SUFFOLK COUNTY CLERK 04/11/2019 11:19 AM NYSCEF DOC. NO. 19 7 2 2. a c c o u nti n g f or RECEIVED NYSCEF: 04/11/2019 V ersi o n D at e d A pr. 1 0, 2 0 1 9 wit h C ert ai n R e d a cti o ns R e m o v e d P er P arti es' A gr e e m e nt I n 2 0 1 7, A m eris o ur c e fl a g g e d of its pl a c e d or d ers f or a d diti o n al r e vi ew, of its t ot al or d ers . Of t h os e, w er e r el e as e d t o t h e c ust o m er, a n d w er e r e p ort e d . A m eris o ur c e ess e nti all y r e pr es e nts t h at, of or d ers e x c e e di n g its alr e a d y br o a d p ar a m et ers, it r e c ei v es m or e t h a n f or e v er y o n e s us pi ci o us or d er. Di v ersi o n e m pl o y e es r e c o g ni z e t h e h ol es i n A m eris o ur c e ’s pr o gr a m. I n pr e p ari n g for a m e eti n g wit h S e e mi n g t o r ec o g ni z e t h at t h e y l o o k e d p o or— 7 2 3. A m eris o ur c e h as a hi g h t ol er a n c e f or c o m pli a n c e iss u es b ef or e it will t er mi n at e a c ust o m er. Pri or t o 2 0 1 5, t h e c o m p a n y h a d a r eg ul ar pr a cti c e of r el e asi n g a n d n ot r e p orti n g or d ers, e v e n f or c ust o m ers t h at r e p e at e dl y a n d si g nifi c a ntl y e x c e e d e d its est a blis h e d p ar a m et ers. T o d a y, it still l a c ks a n i nt er n al r ul e or p oli c y t h at r e q uir es i n v esti g ati o n of a c ust o m er b as e d o n a s p e cifi c n u m b er of s us pi ci o us or d er r e p orts. 7 2 4. A p h ar m a c y i n , f or e x a m pl e, first b e g a n or d eri n g o v er its all o w e d l e v els fr o m B ell c o i n D e c e m b er 2 0 0 8. T h e p h ar m a c y’s hist or y i n cl u d es fr e q u e nt o pi oi d or d ers t w o t o t hr e e ti m es o v er t h e p h ar m a c y’s li mits, r e g ul ar r el e as es of t h os e or d ers, c o n v ers ati o ns wit h t h e p h ar m a c y o w n er e x pr essi n g c o n c er n wit h t h e p h ar m a c y’s or d eri n g p att er ns, t hr e ats fr o m t h e p h ar m a c y t o t a k e its b usi n ess t o a n ot h er distri b ut or, at l e ast t w o sit e visits, a n d a n e xt er n al a u dit . T h e c ust o m er w as f urt h er r e vi e w e d w h e n it w as fl a g g e d b y a m a n uf a ct ur er i n 2 0 1 5 f or p ur c h asi n g c o ntr oll e d s u bst a n c es fr o m m ulti pl e s u p pli ers, a c o m m u ni c ati o n d es cri b e d as i nfr e q u e nt b y a n 199 206 of 258 INDEX NO. 400016/2018 FILED: SUFFOLK COUNTY CLERK 04/11/2019 11:19 AM NYSCEF DOC. NO. 19 RECEIVED NYSCEF: 04/11/2019 V ersi o n D at e d A pr. 1 0, 2 0 1 9 wit h C ert ai n R e d a cti o ns R e m o v e d P er P arti es' A gr e e m e nt c o m pli a n c e e m pl o y e e . As r e c e ntl y as J a n u ar y 2 0 1 8, h o w e v er, t h e c ust o m er r e m ai n e d a cti v e wit h hi g h r at es of o pi oi ds pr o d u ct p ur c h asi n g, o n a list of r e p ort e d or d ers —o n e of t h e o nl y . 2 p er c e nt of all or d ers fl a g g e d a n d r e p ort e d b y A m eris o ur c e — y et still n o i n di c ati o n t h at t h e c o m p a n y i nt e n d e d t o i n v esti g at e f urt h er or r estri ct t h e p h ar m a c y’s p ur c h asi n g at all . 7 2 5. Wit hi n t h e ar e N e w Y or k p h ar m a ci es t h at h a v e b e e n s u p pli e d b y A m eris o ur c e A m eris o ur c e di d n o t i m pl e m e nt a s yst e m t o i d e ntif y a n d r e vi e w c ust o m ers wit h t h es e al ar mi n g r at es of c o ntr oll e d s u bst a n c es a n d o pi oi d s al es u ntil F e br u ar y 2 0 1 8. C o nti n u e d s al es of c o ntr oll e d s u bst a n c es d uri n g t his r e vi e w p eri o d w er e o nl y s us p e n d e d if t h e c ust o m er f ail e d t o r es p o n d. 7 2 6. E v e n w h e n c ust o m ers w er e r estri ct e d, bl o c k e d, or t er mi n at e d, A m eris o ur c e ’s s yst e m f ail e d t o e ns ur e t h eir a c c o u nts w er e d e - a cti v at e d. I n N o v e m b er 2 0 1 7, a c o m pli a n c e st aff m e m b er i d e ntifi e d s e v er al N e w Y or k p h ar m a ci es t h at a p p e ar e d o n t h e “ D o N ot S hi p ” list, b ut w er e a cti v e a n d wit h o ut e x cl usi o ns i n t h e A m eris o ur c e s yst e m. S e v er al m o nt hs l at er, A m eris o ur c e d e ci d e d t h at t h e dis cr e p a n c y m ust b e wit h t h e list, a n d si n c e t h e c ust o m ers h a d b e e n or d eri n g a n d r e c ei vi n g c o ntr oll e d s u bst a n c es si n c e pl a c e me nt o n t h e D o N ot S hi p list a n y w a y , t h e c ust o m ers w o ul d b e r ei nst at e d wit h o ut a n y a d diti o n al d u e dili g e n c e r e vi e w. I n a n ot h er e x a m pl e, a p h ar m a c y w as a d d e d t o t h e D o N ot S hi p list i n 2 0 1 1 a n d n e v er r ei nst at e d, b ut c o nti n u e d r e c ei vi n g s hi p m e nts t hr o u g h 2 0 1 6; t h e o w n er w as c h ar g e d t h e f oll o wi n g y e ar wit h c o ns pir a c y t o distri b ut e o x y c o d o n e a n d pl e d g uilt y. 7 2 7. T h e o n e ar e a i n w hi c h A m eris o ur c e h as c o nsist e ntl y st o o d o ut as c o m p ar e d t o its m aj or c o m p etit ors is its u n willi n g n ess t o i d e ntif y s us pi ci o us or d ers, e v e n a m o n g c ust o m ers t h at r e g ul arl y e x c e e d e d t h eir t hr es h ol ds a n d pr es e nt e d m ulti pl e r e d fl a gs of di v ersi o n. 200 207 of 258 INDEX NO. 400016/2018 FILED: SUFFOLK COUNTY CLERK 04/11/2019 11:19 AM NYSCEF DOC. NO. 19 RECEIVED NYSCEF: 04/11/2019 V ersi o n D at e d A pr. 1 0, 2 0 1 9 wit h C ert ai n R e d a cti o ns R e m o v e d P er P arti es' A gr e e m e nt 7 2 8. S p e cifi c all y, A m eris o ur c e s hi p p e d o pi oi ds t o a p pr o xi m at el y 2, 4 3 0 p h ar m a ci es i n N e w Y or k fr o m 2 0 1 0 t o 2 0 1 8. B et w e e n 2 0 1 4 a n d 2 0 1 7 , A m eris o ur c e a p p e ars t o h a v e p er y e ar, b ut r e p ort e d o nl y of t h e m as s us pi ci o us. I n 2 0 1 7, t h at r at e f ell t o 7 2 9. D uri n g t his ti m e, n u m er o us A m eris o ur c e o pi oi d c ust o m ers e x hi bit e d s e v er al c o m m o n i n di c at ors of s us pi ci o us a cti vit y f or m ulti pl e y e ars. T h es e fl a gs i n cl u d e d: • S c ori n g a b o v e t h e 9 0t h p er c e ntil e i n t h e c o u nt y f or o pi oi d or d er v ol u m e; • S c ori n g a b o v e t h e 9 0t h p er c e ntil e i n t h e c o u nt y f or t ot al o pi oi d or d ers; • S c ori n g a b o v e t h e 9 0t h p er c e ntil e i n t h e c o u nt y f or o x y c o d o n e or d er v ol u m e; • S c ori n g a b o v e t h e 9 0t h p er c e ntil e i n t h e c o u nt y f or t ot al o x y c o d o n e or d ers ; • S c ori n g a b o v e t h e 9 0t h p er c e ntil e i n t h e st at e f or t h e p er c e nt a g e of o x y c o d o n e v ol u m e s hi p p e d o ut of all c o ntr oll e d s u bst a n c es s hi p p e d; • Filli n g pr e s cri pti o ns b y pr es cri b ers w h o w er e l at er i n di ct e d or c o n vi ct e d o n o pi oi d -r el at e d pr es cri bi n g a n d dist ri b uti o n c h ar g es; • S c ori n g a b o v e t h e 9 0t h p er c e ntil e i n t er ms of p er c e nt a g e of p ati e nt d o ct or -s h o p p ers; • S c ori n g a b o v e t h e 9 0t h p er c e ntil e i n t er ms of p er c e nt a g e of c as h p a y m e nts ; a n d • S c ori n g a b o v e t h e 9 0t h p er c e ntil e i n t er ms of t h e m e di a n M M E pr es cri b e d p er d a y. 7 3 0. • T hr e e e x a m pl es of s u c h p h ar m a ci es ar e: A m e ris o u r c e E x e m pl a r P h a r m a c y 1 , l o c at e d i n Or a n g e C o u nt y ( a b o ut 3 0 0, 0 0 0 p e o pl e), w as c o nsist e ntl y a t or a b o v e b ot h t h e 9 9t h p er c e ntil e i n t h e St at e i n t er ms of b ot h n u m b er of o pi oi d or d ers a n d t ot al o pi oi d w ei g ht. B et w e e n 2 0 1 4 a n d 2 0 1 6 , m or e t h a n 1 0 % of its pr es cri pti o ns w er e writt e n b y pr es cri b ers w h o w er e l at er i n di ct e d or c o n vi ct e d of o pi oi d- r el at e d pr es cri bi n g a n d distri b uti o n c h ar g es. A n d w hil e A m eris o ur c e r e p ort e d S O R s f or t his p h ar m a c y i n 2013 and i n 2 0 1 4, t h at n u m b er d wi n dl e d t o o v er t h e n e xt t hr e e y e ars, a n d as of 2 0 1 8, A m eris o ur c e w as still s er vi n g as t his p h ar m a c y’s pri m ar y o pi oi d distri b ut or. 201 208 of 258 INDEX NO. 400016/2018 FILED: SUFFOLK COUNTY CLERK 04/11/2019 11:19 AM NYSCEF DOC. NO. 19 RECEIVED NYSCEF: 04/11/2019 V ersi o n D at e d A pr. 1 0, 2 0 1 9 wit h C ert ai n R e d a cti o ns R e m o v e d P er P arti es' A gr e e m e nt • A m e ris o u r c e E x e m pl a r P h a r m a c y 2 , lo c at e d i n Q u e e ns C o u nt y, is a c ust o m er of A m eris o ur c e’s B el l c o Dr u g s u b di visi o n. B et w e e n 2 0 1 3 a n d 2 0 1 7, 7 7 % of its pr es cri pti o ns , o n a v er a g e, w er e writt e n b y pr es cri b ers w h o w er e l at er i n di ct e d or c o n vi ct e d, i n cl u di n g R o g eli o L u c as a n d M os h e Miril as h vili. I n 2 0 1 4 s p e cifi c all y, 9 0 % of pr es cri pti o ns fill e d b y t his p h ar m a c y w er e m a d e b y pr es cri b ers w h o w er e l at er i n di ct e d or c o n vi ct e d. A m eris o ur c e a p p e ars t o h a v e o nl y st o p p e d s hi p pi n g i n 2 0 1 7 — A m eris o ur c e its elf o nl y i d e ntifi e d S O Rs f or t his p h ar m a c y b et w e e n 2 0 1 3 a n d 2 0 1 7. 202 209 of 258 INDEX NO. 400016/2018 FILED: SUFFOLK COUNTY CLERK 04/11/2019 11:19 AM NYSCEF DOC. NO. 19 RECEIVED NYSCEF: 04/11/2019 V ersi o n D at e d A pr. 1 0, 2 0 1 9 wit h C ert ai n R e d a cti o ns R e m o v e d P er P arti es' A gr e e m e nt • A m e ris o u r c e E x e m pl a r P h a r m a c y 3 , l o c at e d i n Br o n x C o u nt y, e x c e e d e d t h e 9 5t h p er c e ntil e f or t h e p er c e nt a g e of o x y c o d o n e v ol u m e s hi p p e d f or fi v e y e ars str ai g ht (2 0 1 2 t o 2 0 1 6) . O n a v er a g e, 5 8 % of its o pi oi d pr es cri pti o ns w er e p ai d i n c as h ( 9 9 t h p er c e ntil e i n t h e St at e). F or t hr e e c o ns e c uti v e y e ars ( 2 0 1 3 t o 2 0 1 5 ), a p pr o xi m at el y h alf of all o pi oi d s cri pts w er e fill e d b y pr es cri b ers w h o w er e l at er c o n vi ct e d, i n cl u di n g R o b ert T er di m a n a n d R o g eli o L u c as. A m eris o ur c e r e p ort e d S O Rs i n 2 0 1 0 a n d As of 2 0 1 8, t his p h ar m a c y w as still a c ust o m er of A m eris o ur c e. 203 210 of 258 INDEX NO. 400016/2018 FILED: SUFFOLK COUNTY CLERK 04/11/2019 11:19 AM NYSCEF DOC. NO. 19 RECEIVED NYSCEF: 04/11/2019 V ersi o n D at e d A pr. 1 0, 2 0 1 9 wit h C ert ai n R e d a cti o ns R e m o v e d P er P arti es' A gr e e m e nt 7 3 1. A m eris o ur c e’s d efi ci e n ci es a n d f ail ur es di d n ot g o u n d et e ct e d. T h e c o m p a n y w as e x pli citl y p ut o n n oti c e o n m ulti pl e o c c asi o ns b y g o v er n m e nt a g e n ci es t h at it w as n ot f ulfilli n g its d uti es, i n cl u di n g t h os e it o w e d t o Pl ai ntiff. 7 3 2. F or e x a m pl e, i n 2 0 0 7, t h e D E A iss u e d a S us p e nsi o n Or d er a g ai nst A m eris o ur c e’s distri b uti o n c e nt er i n Fl ori d a, all e gi n g t h at t h e c o m p a n y f ail e d t o m ai nt ai n eff e cti v e a nti -di v ersi o n c o ntr ols. A m eris o ur c e s ettl e d t h at m att er b y a c c e pti n g a s us p e nsi o n of t h e distri b uti o n c e nt er’s D E A r e gistr ati o n. 7 3 3. L at er t h at y e ar, w h e n A m eris o ur c e a c q uir e d B ell c o, it w as f or c e d t o a c k n o wl e d g e i n a pr ess r el e as e t h at t h e r e d u c e d pri c e it w as p a yi n g f or B ell c o w as d u e t o t h e c osts ass o ci at e d wit h B ell c o’s f ail ur e t o r e p ort m or e t h a n 2, 0 0 0 s us pi ci o us o pi oi d or d ers t o t h e D E A o v er t h e pri or t hr e e y e ars, a n d its $ 8 0 0, 0 0 0 fi n e fr o m t h at a g e n c y. 7 3 4. I n 2 0 1 2, t h e St at e of W est Vir gi ni a s u e d A m eris o ur c e, all e gi n g t h at t h e m or e t h a n 1 0 0 milli o n o pi oi d pills t h e c o m p a n y s hi p p e d i nt o t h e st at e o v er t h e pr e c e di n g fi v e y e ars w as pri m a 204 211 of 258 INDEX NO. 400016/2018 FILED: SUFFOLK COUNTY CLERK 04/11/2019 11:19 AM NYSCEF DOC. NO. 19 RECEIVED NYSCEF: 04/11/2019 V ersi o n D at e d A pr. 1 0, 2 0 1 9 wit h C ert ai n R e d a cti o ns R e m o v e d P er P arti es' A gr e e m e nt 212 of 258 INDEX NO. 400016/2018 FILED: SUFFOLK COUNTY CLERK 04/11/2019 11:19 AM NYSCEF DOC. NO. 19 RECEIVED NYSCEF: 04/11/2019 V ersi o n D at e d A pr. 1 0, 2 0 1 9 wit h C ert ai n R e d a cti o ns R e m o v e d P er P arti es' A gr e e m e nt “ D E A M o nt h E n d Or d ers of S us pi ci o n R e p ort ” f or or d ers it i d e ntifi e d as s us pi ci o us. R o c h est er Dr u g als o t ol d t h e D E A t h at it w o ul d h ol d a n d i n v esti g at e a n y “ Or d ers of I nt er est, ” w hi c h it d efi n e d as t h os e e x c e e di n g a c ust o m er’s m o nt hl y us a g e li mit. 7 4 0. N ot wit hst a n di n g R o c h est er Dr u g ’s 2 0 0 9 c o m mit m e nts t o t h e D E A, n o n e of t h es e i n a d e q u at e p oli ci es w er e a ct u all y m e m ori ali z e d i n a writ t e n p oli c y of st a n d ar d o p er ati n g pr o c e d ur es m a d e a v ail a bl e t o t h e c o m p a n y’s e m pl o y e es. 7 4 1. I n a n y e v e nt, t h e s yst e m d es cri b e d i n R o c h est er Dr u g ’s 2 0 0 9 l ett er t o t h e D E A w as ri d dl e d wit h fl a ws t h at e n a bl ed di v ersi o n. F or e x a m pl e, R o c h est er Dr u g s et m o nt hl y usa g e t hr es h ol ds f or its c ust o m ers b y a v er a gi n g a c ust o m er’s p ur c h as es o v er a t w el v e-m o nt h p eri o d a n d t h e n m ulti pl yi n g t h at a m o u nt b y a n ar bitr ar y n u m b er t h at v ari e d b as e d o n t h e p arti c ul ar c at e g or y of c o ntr oll e d s u bst a n c es. F or S c h e d ul e II dr u gs, s u c h as t h e o pi oi ds at iss u e h er e, t h at ar bitr ar y n u m b er w as t hr e e f or s e v er al y e ars. As s u c h, t h e t hr es h ol ds s et b y R o c h est er Dr u g ’s “ p oli c y ” w er e i n v ari a bl y s o hi g h t h at c ust o m ers c o ul d n ot r e a c h t h e m u nl ess t h eir or d er v ol u m es tri pl e d fr o m t h eir hist ori c al p ur c h asi n g p att er ns, r e n d eri n g t h e s yst e m virt u all y us el ess at d et e cti n g m a n y s us pi ci o us or d ers. I n 2 0 0 9, R o c h est er Dr u g h a d t ol d t h e D E A t h at its t hr es h ol d m o nit ori n g s yst e m w o ul d pr o vi d e its c ust o m ers wit h “r o o m f or gr o wt h, ” a n d a t l e ast o n t his iss u e, R o c h est er Dr u g w as n ot u n d erst ati n g t h e sit u ati o n. 7 4 2. I n 2 0 1 2, R o c h est er Dr u g tol d t h e D E A t h at it w o ul d h ol d all “ Or d ers of I nt er est ” u ntil it r e c ei v e d “ pr o p er i nf or m ati o n ” fr o m its c ust o m ers, a n d t h at if t h os e or d ers w er e n ot r el e as e d b e c a us e of “i ns uffi ci e nt i nf or m ati o n ” fr o m t h e p h ar m a c y t h e y w o ul d b e r e p ort e d t o t h e D E A as s us pi ci o us. 7 4 3. A g ai n, R o c h est er Dr u g ’s 2 0 1 2 u p d at e t o its p oli ci es w as n ot a ct u all y m e m ori ali z e d i n a f or m al writt e n p oli c y. 206 213 of 258 INDEX NO. 400016/2018 FILED: SUFFOLK COUNTY CLERK 04/11/2019 11:19 AM NYSCEF DOC. NO. 19 7 4 4. RECEIVED NYSCEF: 04/11/2019 V ersi o n D at e d A pr. 1 0, 2 0 1 9 wit h C ert ai n R e d a cti o ns R e m o v e d P er P arti es' A gr e e m e nt I n 2 0 1 4, R o c h est er Dr u g i nf or m all y i m pl e m e nt e d a c h a n g e t o its t hr es h ol d pr o c e d ur es, a p pl yi n g a n ar bitr ar y m ulti pli er of t w o, i nst e a d of t hr e e, t o its c ust o m ers’ hist ori c al p ur c h asi n g p att er ns of S c h e d ul e II pr es cri pti o n o pi oi ds. T his still l eft c ust o m ers “r o o m t o gr o w ” t h eir mo nt hl y o pi oi d or d ers b y d o u bl e t h eir n or m al v ol u m es b ef or e e v e n q u alif yi n g f or s cr uti n y. 7 4 5. At t h e ti m e, d efi ci e n ci es i n its or d er R o c h est er Dr u g ’s h e a d of c o m pli a n c e a c k n o wl e d g e d m aj or m o nit ori n g s yst e m, writi n g i n a n e m ail t h at t h e c o m p a n y h a d l o w er e d its fa ct or m ulti pli ers “t o f or c e b ett er c o o p er ati o n fr o m o ur c ust o m ers ” w hil e r ef er e n ci n g “ n ot r e c ei vi n g o ur l o y al p h ar m a ci es dis p e nsi n g r e c or ds t h e w a y w e r e q uir e t h e m. ” 7 4 6. I n 2 0 1 5, R o c h est er Dr u g fi n all y e n a ct e d a writt e n St a n d ar d O p er ati n g Pr o c e d ur e ( “ S O P ”) g ov er ni n g its a nti -di v ersi o n c o m pli a n c e m e c h a nis ms . R o c h est er Dr u g ’s 2 0 1 5 S O P, a m o n g ot h er t hi n gs, r e q uir e d t h e c o m p a n y t o: (i) o bt ai n a n d r e vi e w p h ar m a c y dis p e nsi n g d at a pri or t o s elli n g c o ntr oll e d s u bst a n c es t o t h at p h ar m a c y; (ii) v erif y c ust o m ers’ D E A r e gistr ati o ns; (iii) o bt ai n a c o m pl et e d c ust o m er q u esti o n n air e r e q u esti n g i nf or m ati o n t h at c o ul d dis cl os e r e d fl a gs of p ot e nti al di v ersi o n; (i v) i n v esti g at e a n d h ol d Or d ers of I nt er est ; a n d ( v) “ ass ess w h et h er e a c h pr os p e cti v e a n d c urr e nt c ust o m er dis p e ns es c o ntr oll e d s u bst a n c es f or l e giti m at e m e di c al p ur p os es. ” 7 4 7. T h e 2 0 1 5 S O P r e m ai n e d f u n d a m e nt all y fl a w e d. F or o n e t hi n g, t h e S O P di d n ot eff e cti v el y r ef or m R o c h est er Dr u g ’s ar bitr ar y a n d e n a bli n g pr o c e d ur es f or s etti n g c ust o m ers’ m o nt hl y t hr es h ol ds; n or di d R o c h est er Dr u g e n d e a v or t o c o n d u ct a n y i n v esti g ati o n i nt o t h e a p pr o pri at e n ess of its c ust o m ers’ pri or a v er a g e or d eri n g v ol u m es, a f ail ur e w hi c h eff e cti v el y r oll e d all pri or di v ersi o n a cti vit y i nt o t h e c o m p a n y’s f ut ur e s hi p m e nts of o pi oi ds t o t h os e c ust o m ers . I nst e a d, u n d er t h e S O P, t h e ar bitr ar y m ulti pli er f or S c h e d ul e II dr u gs w as si m pl y c ut fr o m t w o t o o n e a n d h alf — a g ai n, m e a ni n g t h at c ust o m ers h a d t o i n cr e as e t h eir m o nt hl y o pi oi d v ol u m es b y 5 0 % b ef or e t h e y w o ul d e v e n tri g g er a c o m pli a n c e c h e c k b y R o c h est er Dr u g . 207 214 of 258 INDEX NO. 400016/2018 FILED: SUFFOLK COUNTY CLERK 04/11/2019 11:19 AM NYSCEF DOC. NO. 19 7 4 8. RECEIVED NYSCEF: 04/11/2019 V ersi o n D at e d A pr. 1 0, 2 0 1 9 wit h C ert ai n R e d a cti o ns R e m o v e d P er P arti es' A gr e e m e nt I n a d diti o n, t h e 2 0 1 5 S O P di d n ot r e q uir e c o m pli a n c e e m pl o y e es t o r e vi e w dis p e nsi n g d at a pri or t o r el e asi n g o r d ers of int er est or pr o vi d e g ui d a n c e o n a c c e pt a bl e j ustifi c ati o ns f or r el e asi n g a n or d er of i nt er est or r aisi n g a p ur c h as e t hr es h ol d. 7 4 9. F urt h er, u n d er t h e 2 0 1 5 S O P , R o c h est er Dr u g c o nti n u e d its l o n gst a n di n g pr a cti c e of w ar ni n g c ust o m ers t h at t h e y w er e a p pr o a c hi n g t h eir m o nt hl y p ur c h as e li mits, i n cl u di n g w h e n t h eir p ur c h as es “r e a c h e d 7 5 % of t h eir t hr es h ol d. ” 7 5 0. M or e o v er , alt h o u g h t h e 2 0 1 5 S O P d efi n e d s us pi ci o us or d ers as t h os e or d ers of int er est t h at t h e c o m p a n y d e ci d e d n ot t o s hi p a n d s p e cifi e d t h at t h es e or d ers m ust b e r e p ort e d t o t h e D E A , it w as e ntir el y sil e nt o n w h et h er, w h e n , or h o w s us pi ci o us or d ers s h o ul d b e r e p ort e d t o a n y St at e a ut h or iti es. N e v ert h el ess, e v e n p urs u a nt t h e 2 0 1 5 S O P, R o c h est er Dr u g f ail e d t o a d e q u at el y d esi g n a n d o p er at e a s yst e m t o dis cl os e s us pi ci o us or d ers . 7 5 1. Fi n all y, as R o c h est er Dr u g str u g gl e d t o i m pl e m e nt a n y m e a ni n gf ul c o m pli a n c e pr o gr a m, it als o f alt er e d i n its m a n d at or y A ut o m ati o n of R e p orts a n d C o ns oli d at e d Or d ers S yst e m ( “A R C O S ”) r e p orti n g o bli g ati o ns. 7 5 2. I n 2 0 1 3, a D E A a u dit c o n cl u d e d t h at R o c h est er Dr u g h a d u n d err e p ort e d t h o us a n ds of dr u g s al es m a d e t o its c ust o m ers t hr o u g h o ut t h e N ort h e ast. F oll o wi n g t h e a u dit , R o c h est er Dr u g ass ur e d t h e D E A t h at it w as i m pl e m e nti n g a n e w el e ctr o ni c or d er s yst e m t h at w o ul d a d dr ess a n y c o n c er ns wit h its or d er r e p orti n g. I n J u n e 2 0 1 4, h o w e v er, w h e n t h e D E A r e e x a mi n e d R o c h est er Dr u g ’s c o m pli a n c e s yst e ms, it dis c o v er e d t h at Ro c h est er Dr u g h a d n ot i m pl e m e nt e d t h e pr o mis e d n e w s yst e m, a n d h a d i nst e a d si m pl y f ail e d t o e nt er a n y of its or d ers i nt o A R C O S f or t h e e ntir e pr e c e di n g y e ar. 7 5 3. I n J ul y 2 0 1 5, t h e U. S. Att or n e y f or t h e S o ut h er n Distri ct of N e w Y or k br o u g ht a ci vil c o m pl ai nt a g ai nst R o c h est er Dr u g f or its f ail ur e t o r e p ort or d ers i n A R C O S, a n d f or f aili n g t o 208 215 of 258 INDEX NO. 400016/2018 FILED: SUFFOLK COUNTY CLERK 04/11/2019 11:19 AM NYSCEF DOC. NO. 19 RECEIVED NYSCEF: 04/11/2019 V ersi o n D at e d A pr. 1 0, 2 0 1 9 wit h C ert ai n R e d a cti o ns R e m o v e d P er P arti es' A gr e e m e nt r e p ort t h e l oss a n d/ or t h eft of c o ntr oll e d s u bst a n c es, b ot h i n vi ol ati o n of t h e f e d er al C o ntr oll e d S u bst a n c es A ct. 7 5 4. S h ortl y t h er e aft er, R o c h est er Dr u g e nt er e d i nt o a s ettl e m e nt a gr e e m e nt wit h t h e U. S. Att or n e y. S e e C o ns e nt Or d er, U nit e d St at es v. R o c h est er Dr u g C o o p er ati v e , C as e N o. 1 5 Ci v. 5 2 1 9 ( S. D. N. Y.) ( E C F N o. 2; fil e d J ul y 8, 2 0 1 5). As p art of t h e a gr e e m e nt, R o c h est er Dr u g a d mitt e d t o its f ail ur es t o r e p ort or d ers a n d l ost/st ol e n dr u gs, a gr e e d t o p a y a $ 3 6 0, 0 0 0 fi n e , a n d pr o vi d e d t h e D E A wit h r e c o nstr u ct e d A R C O S d at a f or t h e pr e c e di n g fi v e y e ars. 2. R o c h est e r D r u g ’s F ail u r e t o Eff e cti v el y P r e v e nt Di v e rsi o n i n P r a cti c e 7 5 5. i n di vi d u als. Pri or t o t h e e n d of 2 0 1 3 , R o c h est er Dr u g ’s c o m pli a n c e st aff c o nsist e d of j ust t w o O n e of t h es e e m pl o y e es h a n dl e d c ust o m er s er vi c e ; t h e ot h er h el d t h e d u al r es p o nsi biliti es of m a n a gi n g c o m pli a n c e a n d o p er ati o ns at R o c h est er Dr u g ’s distri b uti o n f a cilit y— a c o nfli cti n g a n d ti m e- c o m p etiti v e f u n cti o n. 7 5 6. Fr o m a p pr o xi m at el y 2 0 1 3 t o 2 0 1 6, R o c h est er Dr u g s p e nt o nl y a b o ut $ 1 5 0, 0 0 0 o n c o m pli a n c e p er y e ar. 7 5 7. W hil e t h e c o m pli a n c e d e p art m e nt e x p a n d e d gr a d u all y fr o m 2 0 1 3 t o t h e pr es e nt, R o c h est er Dr u g c o nti n u e d t o r el y o n o nl y a h a n df ul of fr o nt -li n e st aff t o r e vi e w or d ers of i nt er est a n d ot h er d u e dili g e n c e m at eri als f or t h e e ntir et y of its gr o wi n g c ust o m er b as e — a n d e v e n aft er t h e c o m p a n y e x p a n d e d t o o p e n a s e c o n d distri b uti o n f a cilit y. 7 5 8. O n s e v er al o c c asi o ns, R o c h est er Dr u g ’s s e ni or m a n a g e m e nt e x pr ess e d fr ustr ati o n t o c o m pli a n c e e m pl o y e es r e g ar di n g t h e c osts a n d t h e l e n gt h of ti m e of d u e dili g e n c e r e vi e ws. F or e x a m pl e, i n a 2 0 1 4 e m ail dis c ussi n g t h e hiri n g of a n o utsi d e c o m pli a n c e c o ns ult a nt, R o c h est er Dr u g ’s t h e n-C E O st at e d t h at it w as “ m a ki n g m e ill a s t o h o w m u c h t his is g oi n g t o c ost us. ” I n a n ot h er e m ail, R o c h est er Dr u g ’s t h e n-C E O st at e d “ w e ar e w asti n g a l ot of e n er g y a n d pissi n g 209 216 of 258 INDEX NO. 400016/2018 FILED: SUFFOLK COUNTY CLERK 04/11/2019 11:19 AM NYSCEF DOC. NO. 19 RECEIVED NYSCEF: 04/11/2019 V ersi o n D at e d A pr. 1 0, 2 0 1 9 wit h C ert ai n R e d a cti o ns R e m o v e d P er P arti es' A gr e e m e nt p e o pl e off ,” r ef erri n g t o t h e c o m pli a n c e pr o gr a m a n d t h e mi ni m al b ur d e n t h at pr o gr a m pl a c e d o n R o c h est er Dr u g ’s s al es st aff. 7 5 9. R o c h est er Dr u g als o f ail e d t o pr o vi d e its c o m pli a n c e e m pl o y e es wit h m e a ni n gf ul tr ai ni n g a n d s u p er visi o n o n h o w t o p erf or m v ari o us d u e dili g e n c e t as ks. A n d it all o w e d u ntr ai n e d fr o nt-li n e c o m pli a n c e e m pl o y e es t o o n b o ar d c ust o m ers, c h a n g e p ur c h as e t hr es h ol ds, a n d e v e n r el e as e or d ers t h at hit t h os e t hr es h ol ds wit h o ut a n y f urt h er r e vi e w b y ot h er st aff . 7 6 0. As n ot e d a b o v e, b ef or e 2 0 1 5, R o c h est er Dr u g h a d n o writt e n p oli ci es g o v er ni n g c o m pli a n c e pr o c e d ur es f or o n b o ar di n g n e w p h ar m a c y c ust o m ers. I n t h e a bs e n c e of s u c h p oli ci es, R o c h est er Dr u g f ail e d t o c o n d u ct a n y m e a ni n gf ul d u e dili g e n c e of n e w c ust o m ers u ntil at l e ast 2 0 1 3, w h e n it fi n all y b e g a n r e q uiri n g pr os p e cti v e c ust o m ers t o s u b mit hist ori c al dis p e nsi n g d at a. 7 6 1. E v e n aft er a d o pti n g t h e S O P i n 2 0 1 5, o n se v er al o c c asi o ns, R o c h est er Dr u g a p pr o v e d n e w c ust o m ers f or t h e s al e of pr es cri pti o n o pi oi ds d es pit e t h e pr es e n c e of c o ns pi c u o us r e d fl a gs. • F or e x a m pl e, i n M ar c h 2 0 1 6, R o c h est er Dr u g a p pr o v e d t h e o n b o ar di n g f or t h e s al e of c o ntr oll e d s u bst a n c es t o a Q u e e n s, N Y p h ar m a c y w h os e dis p e nsi n g d at a a c o m pli a n c e e m pl o y e e i d e ntifi e d as s h o wi n g a hi g h p er c e nt a g e of c as h p ur c h as ers, s e v er al o ut of st at e pr es cri b ers, a n d pr es cri pti o ns fr o m a d o ct or w h o h a d b e e n arr est e d e arli er t h at y e ar o n c h ar g es st e m mi n g fr o m his o x y c o d o n e pr es cri bi n g pr a cti c es. • Si mil arl y, i n J u n e 2 0 1 6, R o c h est er Dr u g a p pr o v e d t h e o n b o ar di n g of a n ot h er Q u e e ns , N Y p h ar m a c y d es pit e a c k n o wl e d gi n g t h at t h e p h ar m a c y’s dis p e nsi n g i nf or m ati o n s h o w e d t h at it h a d: (i) hi g h l e v els of c as h p a y m e nts f or c o ntr oll e d s u bst a n c es i n vi ol ati o n of t h e p h ar m a c y’s o w n d u e dili g e n c e p oli c y; (ii) fill e d c o ntr oll e d s u bst a n c es pr es cri pti o ns fr o m “ pr es cri b er [s] pr a cti ci n g m e di ci n e o utsi d e t h e s c o p e of t h eir d o c u m e nt e d m e di c al s p e ci alt y ”; a n d (iii) fill e d pr es cri pti o ns writt e n f or l ar g e a m o u nts of hi g hl y di v ert e d dr u gs, i n cl u di n g “ hi g h a m o u nts of O x y c o d o n e [ pr es cri pti o ns] f or a n u m b er of P h ysi ci a ns [si c] Assist a nts a n d N urs e pr a ctiti o n ers . ” 210 217 of 258 INDEX NO. 400016/2018 FILED: SUFFOLK COUNTY CLERK 04/11/2019 11:19 AM NYSCEF DOC. NO. 19 RECEIVED NYSCEF: 04/11/2019 V ersi o n D at e d A pr. 1 0, 2 0 1 9 wit h C ert ai n R e d a cti o ns R e m o v e d P er P arti es' A gr e e m e nt 7 6 2. I n 2 0 1 6, R o c h est er Dr u g ’s m a n a g e m e nt dir e ct e d a n o v erri d e of t h e SO P i nstit ut e d o nl y t h e y e ar b ef or e b y all o wi n g n e w c ust o m ers t o p ur c h as e pr es cri pti o n o pi oi ds a n d ot h er c o ntr oll e d s u bst a n c es b ef or e R o c h est er Dr u g ’s c o m pli a n c e t e a m r e vi e w e d t hos e c ust o m ers’ dis p e nsi n g r e p orts, as c all e d f or b y t h e S O P. At t h e ti m e, t h e c o m p a n y’s t h e n-C E O j ustifi e d t h e c h a n g e b y st ati n g, “I d o n ot w a nt t o sl o w t his d o w n ” i n r ef erri n g t o t h e c ust o m er o n b o ar di n g pr o c ess. 7 6 3. R o c h est er Dr u g n ot o nl y f ail e d t o tr ai n its s al es e m pl o y e es o n h o w t o eff e cti v el y s cr e e n n e w a c c o u nts, it a ct u all y i n c e nti vi z e d t h os e e m pl o y e es t o si g n u p n e w c ust o m ers (r e g ar dl ess of t h e di v ersi o n ris k t h e y p os e d) b y off eri n g b o n us es of u p t o $ 1, 0 0 0 f or e a c h n e w a c c o u n t t h e y o p e n e d. 7 6 4. D es pit e s etti n g its c ust o m ers’ m o nt hl y t hr es h ol ds at u nr e as o n a bl y hi g h l e v els, c ust o m ers still fr e q u e ntl y e x c e e d e d t h e m. B y 2 0 1 6, f or e x a m pl e, R o c h est er Dr u g h a d all o w e d s o m e c ust o m ers t o d o u bl e t h eir or d ers f or o x y c o d o n e a n d S u bs ys f e nt a n yl wit hi n a y e ar. 7 6 5. R o c h est er Dr u g di d n ot c o n d u ct d u e dili g e n c e b ef or e filli n g t h es e i n cr e asi n g or d ers. F or e x a m pl e: • I n F e br u ar y 2 0 1 5, R o c h est er Dr u g n ot e d t h at it h a d r el e as e d a n or d er f or O x y C o nti n t o a H u ds o n V all e y p h ar m a c y wit h o ut first r e vi e w i n g t h e p h ar m a c y’s dis p e nsi n g d at a. At t h e ti m e, a c o m pli a n c e e m pl o y e e n ot e d t h at t h e or d er h a d b e e n r el e as e d “i n g o o d f ait h ” b as e d o n t h e pr o mis e t h at t h e p h ar m a c y w o ul d pr o vi d e u p d at e d dis p e nsi n g d at a t h at e v e ni n g, w hi c h it di d n ot. I n f a ct, t h e p h ar m ac y h a d n ot pr o vi d e d a n y dis p e nsi n g d at a t o t h e c o m p a n y si n c e 2 0 1 2, a n d it w as f urt h er n ot e d t h at t h e p h ar m a c y w as “l o a d e d ” wit h “ O x y s cri pts ” fr o m a n o ut - of-ar e a d o ct or t h at R o c h est er Dr u g ’s c o m pli a n c e t e a m w as c o n c er n e d a b o ut (t h e pr es cri b er w as, y e ars l at er, i n di ct e d o n c h ar g es r el at e d t o his o pi oi d pr es cri bi n g pr a cti c es). • In M a y 2 0 1 5, R o c h est er Dr u g r el e as e d an or d er of t h e d a n g er o us o pi oi d S u bs ys f e nt a n yl t o a Q u e e ns p h ar m a c y e v e n t h o u g h t h e p h ar m a c y’s or d ers f or t h at dr u g f or t h e c urr e nt m o nt h w er e d o u bl e t h e p h ar m a c y’s a v er a g e o v er t h e pr e vi o us t w el v e m o nt hs. J ust pri or 211 218 of 258 INDEX NO. 400016/2018 FILED: SUFFOLK COUNTY CLERK 04/11/2019 11:19 AM NYSCEF DOC. NO. 19 RECEIVED NYSCEF: 04/11/2019 V ersi o n D at e d A pr. 1 0, 2 0 1 9 wit h C ert ai n R e d a cti o ns R e m o v e d P er P arti es' A gr e e m e nt t o t hat or d er of i nt er est, a c o m pli a n c e e m pl o y e e h a d e v e n r ais e d t h e p h ar m a c y’s t hr es h ol d. R o c h est er Dr u g r el e as e d t h e S u bs ys or d er wit hi n h o urs of it b ei n g m a d e wit h o ut u p d at e d dis p e nsi n g d at a a n d d es pit e t h e f a ct t h at t h e or d er pl a c e d t h e p h ar m a c y o v er t h e r e c e ntl y r ais e d t hr es h ol d f or t h at dr u g. • 7 6 6. In J ul y 2 0 1 5, w h e n a Br o n x p h ar m a c y’s or d er of o x y c o d o n e hit its p ur c h as e t hr es h ol d, R o c h est er Dr u g r el e as e d t h e or d er d es pit e a c k n o wl e d gi n g t h at i n t h e p ast t h e c ust o m er h a d pr o mis e d t o s u b mit dis p e nsi n g d at a a n d h a d n ot, a n d b as e d its a p pr o v al of t h e or d er o n a s u m m ar y r e p ort w hi c h di d n ot all o w t h e c o m p a n y t o vi e w pr es cri b er i nf or m ati o n or i nf or m ati o n i n di c ati n g m et h o d of p a y m e nt — k e y i n di c at ors of p ot e nti al di v ersi o n. O n s e v er al o c c asi o ns, R o c h est er Dr u g e v e n t o o k m e as ur es t o r ais e c ust o m ers’ t hr es h ol ds f or o pi oi ds wit h o ut first c o ns ulti n g c urr e nt dis p e nsi n g d at a or d o c u m e nti n g j ustifi c ati o ns f or t h e c h a n g e. E v e n w h e n R o c h est er Dr u g di d bl o c k a c ust o m er’s or d er t h at hit a t hr es h ol d, it r o uti n el y t o o k n o st e ps t o s us p e n d or t er mi n at e t h os e c ust o m ers p e n di n g f urt h er i n v esti g ati o n, a n d i nst e a d all o w e d t h e c ust o m er t o c o nti n u e r e c ei vi n g its t hr es h ol d a m o u nt of o pi oi ds m o nt h aft er m o nt h t h er e aft er. 7 6 7. I n t h e f o ur y e ars b et w e e n 2 0 1 2 a n d 2 0 1 6, R o c h est er Dr u g c o nsist e ntl y u n d err e p ort e d s us pi ci o us or d ers t o t h e D E A, r e p orti n g at m ost j ust f o ur or d ers d uri n g t h at ti m e p eri o d. R o c h est er Dr u g als o f ail e d t o r e p ort s us pi ci o us or d ers t o N e w Y or k as r e q uir e d b y t h e N Y C S A d uri n g t his s a m e ti m e p eri o d. I n d e e d, a R o c h est er Dr u g c o m pli a n c e m a n a g er w h o h as b e e n wit h t h e c o m p a n y si n c e 2 0 1 3 st at e d t h at s h e c o ul d n ot r e c all a n y r e p orti n g t o N e w Y or k St at e pri or t o s o m e p eri o d i n 2 0 1 6 or 2 0 1 7 a n d t h at s h e di d n ot t hi n k t h at R o c h est er Dr u g h a d “ a n u n d erst a n di n g or k n o wl e d g e ” of t h e N e w Y or k r e p orti n g r e q uir e m e nt u ntil r e c e ntl y . 7 6 8. E v e n i n i nst a n c es w h er e t h e c o m p a n y’s mi ni m al c o m pli a n c e eff orts i d e ntifi e d c ust o m ers w h os e o pi oi d dis p e nsi n g d e m o n str at e d r e d fl a gs R o c h est er Dr u g k n e w w er e i n di c ati v e of di v ersi o n, t h e c o m p a n y f ail e d t o r e p ort t h os e c ust o m ers’ or d ers t o t h e D E A or t h e St at e as 212 219 of 258 INDEX NO. 400016/2018 FILED: SUFFOLK COUNTY CLERK 04/11/2019 11:19 AM NYSCEF DOC. NO. 19 RECEIVED NYSCEF: 04/11/2019 V ersi o n D at e d A pr. 1 0, 2 0 1 9 wit h C ert ai n R e d a cti o ns R e m o v e d P er P arti es' A gr e e m e nt s us pi ci o us, l et al o n e t er mi n at e, s us p e n d t h os e c ust o m ers, or r ef us e t o s hi p o pi oi ds t o t h os e c ust o m ers. F or e x a m pl e: • I n 2 0 1 3, R o c h est er dis c o v er e d t h at t w o M a n h att a n p h ar m a c y c ust o m ers w er e filli n g a hi g h p er c e nt a g e of c as h pr es cri pti o ns f or hi g h d os a g e o x y c o d o n e a n d ot h er o pi oi ds writt e n b y a p e di atri c p h ysi ci a n w h o n e ws r e p orts d es cri b e d as o p er ati n g a n all e g e d “ pill mill. ” R o c h est er Dr u g ’s c o m pli a n c e c o ns ult a nt e v e n n ot e d at t h e ti m e t h at t h e a v er a g e q u a ntiti es of o pi oi ds dis p e ns e d b y t h e p h ar m a ci es w as “li k e a sti c k of d y n a mit e w aiti n g f or D E A t o li g ht t h e f us e. ” R o c h est er Dr u g di d n ot fil e s us pi ci o us or d e r r e p orts r e g ar di n g t h es e p h ar m a ci es’ or d ers at t h e ti m e, a n d it c o nti n u e d t o s hi p pr es cri pti o n o pi oi ds t o t h e p h ar m a ci es. • I n J u n e 2 0 1 4, R o c h est er Dr u g ’s p er missi v e d u e dili g e n c e s yst e m all o w e d a H u ds o n V all e y c ust o m er t o or d er o x y c o d o n e fi v e ti m es o v er i ts alr e a d y i nfl at e d t hr es h ol d f or t h at dr u g d es pit e t h e f a ct t h at a y e ar b ef or e t h e c o m p a n y h a d b e c om e a w ar e of r e d fl a gs ass o ci at e d wit h t h e c ust o m er, i n cl u di n g t h at it w as filli n g pr es cri pti o ns f or o ut of- ar e a p ati e nts u p t o 1 5 0 mil es a w a y. R o c h est er Dr u g c o nti n u e d t o s hi p t o t h e c ust o m er; a n d e v e n r el e as e d or d ers of i nt er est i niti all y h el d w h e n t h e c ust o m er hit its t hr es h ol d wit h o ut first r e vi e wi n g or o bt ai ni n g a n y dis p e nsi n g or ot h er i nf or m ati o n t o j ustif y t h os e or d ers. • I n N o v e m b er 2 0 1 5, R o c h est er Dr u g c o m pli a n c e e m pl o y e e s n ot e d t h at a M a n h att a n p h ar m a c y h a d d e m o nstr at e d a “ dist ur bi n g ” p att er n of dis p e nsi n g o x y c o d o n e, i n cl u di n g a “st a g g eri n g ” i n cr e as e i n t h e pri or m o nt h’s or d er, i n w hi c h t h e c ust o m er or d er e d 2 8, 6 0 0 u nits of o x y c o d o n e, w hi c h n e arl y d o u bl e d t h e pr e vi o us si x m o nt hs’ or d eri n g a v er a g e of 1 5, 3 8 0 u nits. T h e c o m pli a n c e e m pl o y e e als o i d e ntifi e d hi g h p er c e nt a g es of c as h p ur c h as es a n d pr es cri pti o ns fill e d b y “ m ulti pl e pr es cri b ers usi n g i n a cti v e/ n ot f o u n d ” or ot h er wis e i n a c c ur at e D E A r e gistr ati on n u m b ers, o ut - of-st at e pr es cri b ers a n d d o ct ors R o c h est er dis c o v er e d h a d b e e n “r estri ct e d fr o m pr a cti ci n g m e di ci n e i n N Y St at e ”, a n d m ulti pl e d o ct ors o n a R o c h est er Dr u g i d e ntifi e d “ W at c h list. ” D es pit e t h es e r e d fl a gs of di v ersi o n, R o c h est er Dr u g c o nti n ue d t o s hi p pr es cri pti o n o pi oi ds t o t h is c ust o m er f or m or e t h a n t w o y e ars wit h o ut r e p orti n g a n y of t h e or d ers it fl a g g e d as s us pi ci o us t o f e d er al a n d St at e a ut h oriti es. 7 6 9. As a n ot h er e x a m pl e, R o c h est er Dr u g c o nti n u e d t o s hi p m assi v e a m o u nts of pr es cri pti o n o pi oi ds, i n cl u di n g t h e hi g hl y a d di cti v e f e nt a n yl dr u g S u bs ys, t o a m ail or d er p h ar m a c y i n N ass a u C o u nt y, d es pit e n u m er o us r e d fl a gs a n d i n di ci a of di v ersi o n. I n d e e d, i n 2 0 1 3, R o c h est er 213 220 of 258 INDEX NO. 400016/2018 FILED: SUFFOLK COUNTY CLERK 04/11/2019 11:19 AM NYSCEF DOC. NO. 19 RECEIVED NYSCEF: 04/11/2019 V ersi o n D at e d A pr. 1 0, 2 0 1 9 wit h C ert ai n R e d a cti o ns R e m o v e d P er P arti es' A gr e e m e nt Dr u g s hi p p e d a p pr o xi m at el y 7 0, 0 0 0 gr a ms of o pi oi ds t o t h is p h ar m a c y, w hi c h r e pr es e nt e d a m or e t h a n 4 0 0 % i n cr e as e i n o pi oi ds s hi p p e d t o t h e p h ar m a c y w h e n c o m p ar e d t o R o c h est er Dr u g ’s s hi p m e nts f or t h e pri or y e ar. I n a d diti o n: • I n 2 0 1 3, b e c a us e of t h e i n cr e as e d s hi p m e nts t o t h e p h ar m a c y, R o c h est er Dr u g e n g a g e d a n o utsi d e c o ns ult a nt t o r e vi e w t h e p h ar m a c y’s d u e dili g e n c e eff orts. F oll o wi n g a r e vi e w, t h e c o ns ult a nt r e c o m m e n d e d t h at R o c h est er Dr u g e ns ur e t h at t h e p h ar m a c y pr o vi d e it wit h r e g ul ar dis p e nsi n g r e p orts, a m o n g ot h er r e c o m m e n d ati o ns —a n d i n M ar c h of 2 0 1 3, i n r es p o ns e t o a r e p ort fr o m t h e c o ns ult a nt, t h e p h ar m a c y c ertifi e d i n writi n g t h at it w o ul d pr o vi d e R o c h est er Dr u g wit h “ q u art erl y dis p e nsi n g r e p orts. ” B ut R o c h est er Dr u g f ail e d t o h ol d t h e p h ar m a c y t o t h at pr o mis e, d e pri vi n g its fr o nt -li n e c o m pli a n c e e m pl o y e es of criti c al d u e dili g e n c e i nf or m ati o n. At o n e p oi nt a c o m pli a n c e e m pl o y e e e v e n c o m m e nt e d t h at it a p p e ar e d “ v er y v er y s us pi ci o us ” t h at t h e p h ar m a c y h a d d el a y e d pr o d u ci n g u p d at e d dis p e nsi n g i nf or m ati o n b y d e m a n di n g t o r e vi e w t h e d at a pri or t o its s u b missi o n. I n a n ot h er i nst a n c e, d es pit e its hist or y wit h t his p h ar m a c y, R o c h est er Dr u g di d n ot n oti c e t h at it l a c k e d dis p e nsi n g d at a fr o m t h e p h ar m a c y f or t h e e ntir e y e ar o f 2 0 1 6 u ntil l at e- O ct o b er 2 0 1 6. • R o c h est er Dr u g i d e ntifi e d ot h er r e d fl a gs at t his p h ar m a c y , i n cl u di n g m ulti pl e hi g h -ris k pr es cri b ers, b ut c o nti n u e d t o s hi p it o pi oi ds . F or i nst a n c e, i n 2 0 1 4, t h e p h ar m a c y pr o vi d e d R o c h est er Dr u g wit h dis p e nsi n g d at a s h o w i n g t h at it h a d fill e d c as h pr es cri pti o ns f or d o ct ors R o c h est er Dr u g k n e w w er e o n a “ w at c h list ” d u e t o t h eir pr es cri bi n g pr a cti c es. • O n ot h er o c c asi o ns, i nst e a d of f ulfilli n g its c o m pli a n c e o bli g ati o ns, R o c h est er Dr u g w e nt o ut of its w a y t o a c c o m m o d at e t h e p h ar m a c y’s l ar g e or d ers a n d i g n or e r e d fl a gs. I n 2 0 1 4, f or e x a m pl e, a R o c h est er Dr u g br a n d r el ati o ns hi p m a n a g er e m ail e d o n e of t h e p h ar m a c y’s e x e c uti v es t o w ar n t h e p h ar m a c y t o “sl o w d o w n ” o n its or d ers of F e nt or a, a f e nt a n yl pr o d u ct, “ or gi v e a v ali d r e as o n t h at w e c a n s h ar e ” wit h t h e pr o d u ct’s m a n uf a ct ur er, n oti n g t h at R o c h est er Dr u g h a d “ alr e a d y s ol d [it] m or e t h a n a n or m al m o nt h us a g e t o all c ust o m ers ” f or t h at m o nt h a n d t h at its or d eri n g w as “ g oi n g t o c a us e r e d fl a gs. ” • T h e a m o u nt of o pi oi ds s hi p p e d t o t his p h ar m a c y w as wit hi n t h e 9 9t h p er c e ntil e i n t h e St at e d uri n g t h e ti m e it w as a R o c h est er Dr u g c ust o m er ( 2 0 1 2- 2 0 1 7). C ar di n al a n d b ot h r e p ort e d s us pi ci o us or d ers f or t his p h ar m a c y, b ut R o c h est er Dr u g di d n ot. 214 221 of 258 INDEX NO. 400016/2018 FILED: SUFFOLK COUNTY CLERK 04/11/2019 11:19 AM NYSCEF DOC. NO. 19 RECEIVED NYSCEF: 04/11/2019 V ersi o n D at e d A pr. 1 0, 2 0 1 9 wit h C ert ai n R e d a cti o ns R e m o v e d P er P arti es' A gr e e m e nt 7 7 0. A n d i n t h e f e w c as es w h er e R o c h est er Dr u g d e ci d e d t o st o p s hi p pi n g or ot h er wis e li mit its s al es of c o ntr oll e d s u bst a n c es t o c ust o m ers f oll o wi n g a d u e dili g e n c e i n v esti g ati o n, it f ail e d t o r e p ort t h e or d ers of c o ntr oll e d s u bst a n c es t h at it h a d alr e a d y — a n d v er y r e c e ntl y — s hi p p e d t o t h os e c ust o m ers, d es pit e t h e s us pi ci o ns a c k n o wl e d g e d i nt er n all y a b o ut t h os e c ust o m ers’ or d eri n g p att er ns . • F or e x a m pl e, i n 2 0 1 3, R o c h est er Dr u g dis c o v er e d t h at a n u m b er of Br o n x p h ar m a ci es s h ari n g c o m m o n o w n ers hi p w er e filli n g c as h pr es cri pti o ns a n d l ar g e a m o u nts of pr es cri pti o ns f or o x y c o d o n e, i n cl u di n g f or a pr es cri b er w h o di d n ot h a v e a n a cti v e D E A r e gistr ati o n. I n d e e d, a c o m p a n y s al es e m pl o y e e e v e n d es cri b e d h o w R o c h est er Dr u g ’s c o m pli a n c e c o ns ult a nt a d mitt e d t h at, i n r ef erri n g t o his sit e visit t o o n e of t h e p h ar m a ci es, h a d his visit b e e n a “r e al D E A a u dit ” t h e a g e n c y w o ul d h a v e “ g o n e aft er t h eir D E A li c e ns e. ” Alt h o u g h R o c h est er Dr u g li mit e d t h e c ust o m er’s a bilit y t o p ur c h as e o x y c o d o n e , it di d n ot r e p ort t h e s us pi ci o us or d ers— w hi c h it h a d alr e a d y s hi p p e d t o t h e p h ar m a c y — t o t h e D E A or St at e a ut h oriti es. I n f a ct, R o c h est er Dr u g n e v er s u b mitt e d a s us pi ci o us or d er r e p ort r e g ar di n g t his c ust o m er t o t h e D E A or St at e a ut h oriti es . 215 222 of 258 INDEX NO. 400016/2018 FILED: SUFFOLK COUNTY CLERK 04/11/2019 11:19 AM NYSCEF DOC. NO. 19 RECEIVED NYSCEF: 04/11/2019 V ersi o n D at e d A pr. 1 0, 2 0 1 9 wit h C ert ai n R e d a cti o ns R e m o v e d P er P arti es' A gr e e m e nt 223 of 258 INDEX NO. 400016/2018 FILED: SUFFOLK COUNTY CLERK 04/11/2019 11:19 AM NYSCEF DOC. NO. 19 RECEIVED NYSCEF: 04/11/2019 V ersi o n D at e d A pr. 1 0, 2 0 1 9 wit h C ert ai n R e d a cti o ns R e m o v e d P er P arti es' A gr e e m e nt (ii) Pr o vi d e e vi d e n c e t h at it is “ a bl e t o c o m pl y wit h all a p pli c a bl e st at e… l a ws”; 1 1 2 a n d (iii) St at e, u n d er p e n alt y of p erj ur y, w h et h er or n ot it, or a n y of its e m pl o y e es, s u bsi di ari es, m a n a gi n g offi c ers, or dir e ct ors “ f ail e d t o c o m pl y wit h t h e… l a ws of a n y St at e r el ati n g t o c o ntr oll e d s u bst a n c es , ” a n d if s o, t o s u b mit a st at e m e nt a n d e x pl a n at or y d o c u m e nt ati o n; 1 1 3 ( b) At t h e ti m e of r e n e wi n g its li c e ns e: (i) R e p ort “ a n y m at eri al c h a n g e i n t h e cir c u mst a n c es or f a ct ors ” rel e v a nt t o its i niti al li c e ns e a p pli c ati o n; 1 1 4 a n d (ii) R e p ort all k n o w n g o v er n m e nt al i n v esti g ati o ns of i n ci d e nts i n v ol vi n g t h e t h eft, l oss, or p ossi bl e di v ersi o n of c o ntr oll e d s u bst a n c es it distri b ut e d, or i nt o its c o m pli a n c e wit h … st at e c o ntr oll e d -s u bst a n c es l a ws;1 1 5 ( c) At all ti m es: 112 113 114 115 116 117 118 (i) “[ R] e p ort … a n y c h a n g e i n f a cts or cir c u mst a n c es … or a n y n e wl y dis c o v er e d or o c c urri n g f a ct or cir c u mst a n c e w hi c h is r e q uir e d t o b e i n cl u d e d ” i n its a p pli c ati o ns f or a n i niti al a n d/ or r e n e w al li c e ns e; 1 1 6 (ii) “[ N] otif y t h e [st at e] of a n y i n ci d e nt i n v ol vi n g t h e t h eft, l oss or p ossi bl e di v ersi o n of c o ntr oll e d s u bst a n c es … distri b ut e d b y t h e li c e ns e e ”; 1 1 7 (iii) “[ E]s t a blis h a n d o p er at e a s yst e m t o dis cl os e t o t h e li c e ns e[ e] s us pi ci o us or d ers f or c o ntr oll e d s u bst a n c es a n d i nf or m t h e [ N e w Y or k St at e D e p art m ent of H e alt h] of s u c h s us pi ci o us or d ers. S us pi ci o us or d ers s h all i n cl u d e, b ut n ot b e li mit e d t o, or d ers of u n us u al si z e, or d ers d e vi ati n g s u bst a nti all y fr o m a n or m al p att er n, a n d or d ers of u n us u al fr e q u e n c y. ” 1 1 8 N. Y. P H L § 3 3 1 2( 1)( d). Li c e ns e A p pli c ati o n t o E n g a g e i n a C o ntr oll e d S u bst a n c e A cti vit y , N. Y. D e p art m e nt of H e alt h F or m 4 3 3 0. N. Y. P H L § 3 3 1 5( 2)( a). N. Y. P H L § 3 3 1 5( 2)( b). N. Y. P H L § § 3 3 1 2( 3), 3 3 1 5( 3). N. Y. P H L § 3 3 2 2( 3). 1 0 N Y C R R § 8 0. 2 2. 217 224 of 258 INDEX NO. 400016/2018 FILED: SUFFOLK COUNTY CLERK 04/11/2019 11:19 AM NYSCEF DOC. NO. 19 RECEIVED NYSCEF: 04/11/2019 V ersi o n D at e d A pr. 1 0, 2 0 1 9 wit h C ert ai n R e d a cti o ns R e m o v e d P er P arti es' A gr e e m e nt 7 7 4. T h es e affir m ati v e o bli g ati o ns ar e c o m pl e m e nt e d b y o n e criti c al pr o hi biti o n, c o nt ai n e d wit hi n t h e v er y first o p er ati v e s u bs e cti o n of t h e N Y C S A: “It s h all b e u nl a wf ul f or a n y p ers o n t o … m a n uf a ct ur e, s ell, distri b ut e … or tr a ns p ort a c o ntr oll e d s u bst a n c e e x c e pt as e x pr essl y all o w e d b y t his arti cl e. ” 1 1 9 7 7 5. I n or d er t o d et er a n d r e m e d y vi ol ati o ns of t h es e d uti es, a n d e ns ur e t h at m a n uf a ct ur ers a n d distri b ut ors f ulfill t h eir cr u ci al r ol e i n pr e v e nti n g t h e i m pr o p er us e of c o ntr oll e d s u bst a n c es, N e w Y or k l a w r e q uir es t h at a n y distri b ut or w h o “ vi ol at es, dis o b e ys, or disr e g ar ds ” a n y pr o visi o n of t h e N Y S C A b e ass ess e d a s e p ar at e a n d s u bst a nti al ci vil p e n alt y “ f or e v er y s u c h vi ol ati o n . ”1 2 0 7 7 6. T h at p e n alt y is s et at a n mi ni m u m a m o u nt of $ 2, 0 0 0 p er vi ol ati o n, 121 b ut c a n b e i n cr e as e d t o $ 5, 0 0 0 f or a n y s u bs e q u e nt vi ol ati o n wit hi n t w el v e m o nt hs of t h e first w h er e b ot h vi ol ati o ns “ w er e a s eri o us t hr e at t o t h e h e alt h a n d s af et y of a n i n di vi d u al or i n di vi d u als, ” 1 2 2 a n d t o $ 1 0, 0 0 0 f or e a c h vi ol ati o n t h at “ dir e ctl y r es ults i n s eri o us p h ysi c al h ar m t o a n y p ati e nt or p ati e nts. ” 1 2 3 7 7 7. C o m p a ni es s u bj e ct t o t h e N Y C S A ar e e x p e ct e d t o d e v el o p a n d e nf or c e s p e cifi c writt e n p oli ci es t o e ns ur e c o m pli a n c e, w hi c h ar e s o m eti m es r ef err e d t o as c o ntr oll e d s u bst a n c e m o nit ori n g p r o gr a ms (“ C S M Ps ” ) or or d er m o nit ori n g pr o gr a ms ( “ O M Ps ” ). T h es e p oli ci es ar e s u p p os e d t o e x pl ai n f or c o m pli a n c e st aff h o w t h e c o m p a n y d et er mi n es w h at a s us pi ci o us or d er is a n d h o w s us pi ci o us or d er r e p orts ( “ S O Rs ” ) t o t h e St at e a n d ot h er r e g ul at ors ar e t o b e m a d e. 119 120 121 122 123 N. N. N. N. N. Y. Y. Y. Y. Y. P P P P P H H H H H L L L L L § § § § § 3 3 0 4( 1). 3 3 9 6( 2) ( e m p h asis a d d e d). 1 2( 1)( a). 1 2( 1)( b). 1 2( 1)( c). 218 225 of 258 INDEX NO. 400016/2018 FILED: SUFFOLK COUNTY CLERK 04/11/2019 11:19 AM NYSCEF DOC. NO. 19 RECEIVED NYSCEF: 04/11/2019 V ersi o n D at e d A pr. 1 0, 2 0 1 9 wit h C ert ai n R e d a cti o ns R e m o v e d P er P arti es' A gr e e m e nt 226 of 258 INDEX NO. 400016/2018 FILED: SUFFOLK COUNTY CLERK 04/11/2019 11:19 AM NYSCEF DOC. NO. 19 RECEIVED NYSCEF: 04/11/2019 V ersi o n D at e d A pr. 1 0, 2 0 1 9 wit h C ert ai n R e d a cti o ns R e m o v e d P er P arti es' A gr e e m e nt 227 of 258 INDEX NO. 400016/2018 FILED: SUFFOLK COUNTY CLERK 04/11/2019 11:19 AM NYSCEF DOC. NO. 19 RECEIVED NYSCEF: 04/11/2019 V ersi o n D at e d A pr. 1 0, 2 0 1 9 wit h C ert ai n R e d a cti o ns R e m o v e d P er P arti es' A gr e e m e nt 228 of 258 INDEX NO. 400016/2018 FILED: SUFFOLK COUNTY CLERK 04/11/2019 11:19 AM NYSCEF DOC. NO. 19 RECEIVED NYSCEF: 04/11/2019 V ersi o n D at e d A pr. 1 0, 2 0 1 9 wit h C ert ai n R e d a cti o ns R e m o v e d P er P arti es' A gr e e m e nt 229 of 258 INDEX NO. 400016/2018 FILED: SUFFOLK COUNTY CLERK 04/11/2019 11:19 AM NYSCEF DOC. NO. 19 RECEIVED NYSCEF: 04/11/2019 V ersi o n D at e d A pr. 1 0, 2 0 1 9 wit h C ert ai n R e d a cti o ns R e m o v e d P er P arti es' A gr e e m e nt 230 of 258 INDEX NO. 400016/2018 FILED: SUFFOLK COUNTY CLERK 04/11/2019 11:19 AM NYSCEF DOC. NO. 19 RECEIVED NYSCEF: 04/11/2019 V ersi o n D at e d A pr. 1 0, 2 0 1 9 wit h C ert ai n R e d a cti o ns R e m o v e d P er P arti es' A gr e e m e nt or h e alt h c ar e pr o vi d ers ( “ H C Ps ”) a n d p h ar m a ci es t o s u b mit, a n d t h e St at e t o c o v er cl ai ms f or N e w Y or k M e di c ai d, N e w Y or k e m pl o y e e a n d r etir e e h e alt h pl a ns, a n d N e w Y or k’s W or k ers’ C o m p e ns ati o n Pr o gr a m t h at w er e f als e b y: 7 9 2. a. C a usi n g pr es cri b ers t o writ e pr es cri pti o ns f or o pi oi d t h er a p y b as e d o n e a c h M a n uf a ct ur er D ef e n d a nt’s d e c e pti v e, f als e, a n d i n c o m pl et e r e pr es e nt ati o ns r e g ar di n g t h e ris ks, b e n efits, a n d s u p eri orit y of t h os e dr u gs; a n d b. C a usi n g H C Ps t o c ertif y t h at t h es e pr es cri pti o ns a n d ass o ci at e d s er vi c es w er e m e di c all y n e c ess ar y, w h e n, i n f a ct, t h e pr es cri pti o ns w er e n ot s u p p ort e d b y s u bst a nti al s ci e ntifi c e vi d e n c e b e c a us e pr es cri bi n g p h ysi ci a ns w er e u n a bl e t o a d e q u at el y ass ess w h et h er t h e ris ks ass o ci at e d wit h t h e dr u gs w er e o ut w ei g h e d b y t h e b e n efits. A s u bst a nti al n u m b er of m e di c all y u n n e c ess ar y cl ai ms f or o pi oi d pr es cri pti o ns p ai d u n d er St at e h e alt h pr o gr a ms w er e i n d u c e d a n d c a us e d b y D ef e n d a nts’ vi ol ati o ns of l a ws, i n cl u di n g mis l e a di n g m ar k eti n g a n d vi ol ati o ns of t h eir o bli g ati o ns u n d er St at e l a ws g o v er ni n g t h e distri b uti o n of c o ntr oll e d s u bst a n c es. I n p arti c ul ar, m a n y cl ai ms f or o pi oi d pr es cri pti o ns f or n o n -c a n c er a n d n o n- p all iati v e c ar e w er e n ot m e di c all y n e c ess ar y b e c a us e t h e y w er e n ot b as e d o n a n a d e q u at e e v al u ati o n of t h e ris ks a n d b e n efits of t h e pr es cri pti o n. 7 9 3. T h e St at e w o ul d n ot k n o wi n gl y h a v e all o w e d t h e M e di c ai d pr o gr a m t o r ei m b urs e cl ai ms f or pr es cri pti o n dr u gs t h at w er e n ot eli gi bl e f or c o v er a g e. A N e w Y or k r e g ul ati o n, 1 8 N. Y. C. R. R. 5 1 5. 2( b)( 1)(i)( c), “ U n a c c e pt a bl e Pr a cti c es u n d er t h e M e di c al Assist a n c e Pr o gr a m ”, st at es i n p erti n e nt p art t h at “[ a] n u n a c c e pt a bl e pr a cti c e is c o n d u ct w hi c h c o nstit ut es fr a u d or a b us e a n d i n cl u d es … F als e cl ai ms [ d efi n e d t o i n cl u d e] c a usi n g t o b e s u b mitt e d … cl ai ms f or m e di c al c ar e, s er vi c es or s u p pli es pr o vi d e d at a fr e q u e n c y or i n a n a m o u nt n ot m e di c all y n e c ess ar y . ” W h et h er a s er vi c e is “ m e di c all y n e c ess ar y ” is t h e pri m ar y c h e c k a g ai nst l oss t o t h e p u bli c fis c a n d pri m ar y c h e c k t o e ns ur e t h e h e alt h a n d s af et y of M e di c ai d r e ci pi e nts. A n “ u n a c c e pt a bl e pr a cti c e ” b y a n y p ers o n is gr o u n ds f or b ot h s a n cti o ns ( e x cl usi o n, c e ns ur e, or c o n diti o n al p arti ci p ati o n) a n d 224 231 of 258 INDEX NO. 400016/2018 FILED: SUFFOLK COUNTY CLERK 04/11/2019 11:19 AM NYSCEF DOC. NO. 19 RECEIVED NYSCEF: 04/11/2019 V ersi o n D at e d A pr. 1 0, 2 0 1 9 wit h C ert ai n R e d a cti o ns R e m o v e d P er P arti es' A gr e e m e nt “r e p a y m e nt of o v er p a y m e nt d et er mi n e d t o h a v e b e e n m a d e as t h e r es ult of a n u n a c c e pt a bl e pr a cti c e. ” 1 8 N Y C R R 5 1 5. 3( a) a n d ( b). N e w Y or k M e di c ai d u n witti n gl y r ei m b urs e d cl ai ms f or o pi oi d pr es cri pti o ns t h at w er e n ot m e di c all y n e c ess ar y, i n cl u di n g t h e f oll o wi n g cl ai ms f or e x c essi v e, l o n g-t er m d os a g es of o pi oi ds pr es cri b e d f or n o n -c a n c er p ati e nts b y pr a ctiti o n ers w h o , b e c a us e of t h eir r e p e at e d a n d dir e ct e x p os ur e t o t h e M a n uf a ct uri n g D ef e n d a nts’ misl e a di n g m ar k eti n g , w er e i n c a p a bl e of a d e q u at el y ass essi n g t h e ris ks a n d b e n efits of t h es e pr es cri pti o ns: a) P ur d u e. As d es cri b e d a b o v e , P ur d u e r e p e at e dl y a n d p ersist e ntl y m a d e f als e a n d misl e a di n g st at e m e nts d o w n pl a yi n g t h e ris ks a n d o v erst ati n g t h e b e n efits of o pi oi ds, i n cl u di n g O x y C o nti n, t hr o u g h u n br a n d e d a n d br a n d e d m ar k eti n g t h at w as t ar g et e d at a n d di d r e a c h N e w Y or k H C Ps. P ur d u e’s d et aili n g of, a n d p a y m e nts t o , s p e cifi c N e w Y or k H C Ps c a us e d t h os e H C Ps t o writ e m e di c all y u n n e c ess ar y pr e s cri pti o ns f or O x y C o nti n — b y st arti n g n e w p ati e nts o n t h e dr u g, k e e pi n g p ati e nts o n t h e dr u g, a n d pr es cri bi n g t h e dr u g at hi g h er d os a g es. F or e x a m pl e: i. N e w Y or k M e di c ai d P ati e nt A, w h o w as di a g n os e d wit h a h er ni at e d dis c, c hr o ni c f ati g u e s y n dr o m e a n d a r ot at or c uff s pr ai n, r e c ei v e d 9 8 pr es cri pti o ns f or O x y C o nti n — t ot ali n g a 2, 9 3 2-d a y s u p pl y — b et w e e n S e pt e m b er 2 0 0 8 a n d A pril 2 0 1 3, at a c ost of $ 9 0, 7 8 5 i n cl ai ms p ai d u n d er t h e St at e’s M e di c ai d pr o gr a m. T h es e pr es cri pti o ns, w hi c h c all e d f or at l e ast 5 7 0 M M Es p er d a y of O x y C o nti n d uri n g t his fi v e -y e ar p eri o d, w er e writt e n b y Dr. Willi a m Gi b bs, w h o w as d et ail e d b y P ur d u e al m ost 7 0 ti m es fr o m 2 0 0 6 t o 2 0 1 1. Dr. Gi b bs’s N e w Y or k St at e m e di c al li c e ns e w as s us p e n d e d i n A pril 2 0 1 3 d u e t o his f e d er al c o n vi cti o n f or h e alt h c ar e fr a u d. ii. N e w Y or k M e di c ai d P ati e nt B , w h o w as di a g n os e d wit h a h er ni at e d dis c, c hr o ni c f ati g u e s y n dr o m e, a n d s h o ul d er t e n di nitis , r e c ei v e d 96 pr es cri pti o ns f or O x y C o nti n— t ot ali n g a 2, 8 8 0-d a y s u p pl y — b et w e e n J ul y 2 0 0 9 a n d A pril 2 0 1 3, at a c ost of $ 6 7, 7 4 9 i n cl ai ms p ai d u n d er t h e St at e’s M e di c ai d pr o gr a m. T h es e pr es cri pti o ns, w hi c h c all e d f or at l e ast 5 4 0 M M Es p er d a y of O x y C o nti n d uri n g t h e m ajorit y of t his fi v e -y e ar p eri o d, w er e writt e n b y Dr. Willi a m Gi b bs. iii. N e w Y or k M e di c ai d P ati e nt C , w h o w as di a g n os e d wit h c hr o ni c f ati g u e s y n dr o m e a n d ost e o art hr osis , r e c ei v e d 2 1 pr es cri pti o ns f or O x y C o nti n— 225 232 of 258 INDEX NO. 400016/2018 FILED: SUFFOLK COUNTY CLERK 04/11/2019 11:19 AM NYSCEF DOC. NO. 19 RECEIVED NYSCEF: 04/11/2019 V ersi o n D at e d A pr. 1 0, 2 0 1 9 wit h C ert ai n R e d a cti o ns R e m o v e d P er P arti es' A gr e e m e nt t ot ali n g a 6 3 0-d a y s u p pl y — b et w e e n J ul y 2 0 1 1 a n d M ar c h 2 0 1 3, at a c ost of $ 3 8, 0 6 8 i n cl ai ms p ai d b y t h e St at e’s M e di c ai d pr o gr a m. T h es e pr es cri pti o ns, w hi c h c all e d f or at l e ast 4 8 0 M M Es p er d a y of O x y C o nti n d uri n g t h e e ntir e p eri o d, a n d at l e ast 7 2 0 M M Es p er d a y o f O x y C o nti n f or ei g ht m o nt hs d uri n g t h at p eri o d, w er e writt e n b y Dr. Willi a m Gi b bs. b) J a nss e n. As d es cri b e d a b o v e , J a nss e n r e p e at e dl y a n d p ersist e ntl y m a d e f als e a n d misl e a di n g st at e m e nts d o w n pl a yi n g t h e ris ks a n d o v erst ati n g t h e b e n efits of o pi oi ds, i n cl u di n g N u c y nt a , t hr ou g h u n br a n d e d a n d br a n d e d m ar k eti n g t h at w as t ar g et e d at a n d di d r e a c h N e w Y or k H C Ps. J a nss e n’s d et aili n g of, a n d p a y m e nts t o, s p e cifi c N e w Y or k H C Ps c a us e d t h os e H C Ps t o writ e m e di c all y u n n e c ess ar y pr es cri pti o ns f or N u c y nt a — b y st arti n g n e w p ati e nts o n t h e dr u g, k e e pi n g p ati e nts o n t h e dr u g, a n d pr es cri bi n g t h e dr u g at hi g h er d os a g es . F or e x a m pl e: i. N e w Y or k M e di c ai d P ati e nt D, w h o w as di a g n os e d wit h a d e g e n er at e d dis c a n d l u m b a g o (l o w er b a c k p ai n), r e c ei v e d 5 8 pr es cri pti o ns f or N u c y nt a — t ot ali n g a 1, 5 9 8- d a y s u p pl y —b et w e e n N o v e m b er 2 0 1 1 a n d F e br u ar y 2 0 1 4, at a c ost of $ 1 8, 0 5 4 i n cl ai ms p ai d u n d er t h e St at e’s M e di c ai d pr o gr a m. T h es e pr es cri pti o ns, w hi c h c all e d f or at l e ast 2 4 0 M M Es p er d a y of N u c y nt a d uri n g t h e v ast m aj orit y of t h e p eri o d, w er e writt e n b y Pr a ctiti o n er A, w h o w as d et ail e d b y J a nss e n 3 6 ti m es fr o m O ct o b er 2 0 1 1 t o A u g ust 2 0 1 2. ii. N e w Y or k M e di c ai d P ati e nt E, w h o w as di a g n os e d wit h a d e g e n er at e d dis c, re c ei v e d 3 5 pr es cri pti o ns f or N u c y nt a — t ot ali n g a 7 7 7-d a y s u p pl y — b et w e e n N o v e m b er 2 0 1 1 a n d J u n e 2 0 1 4, at a c ost of $ 2 2, 8 9 7 i n cl ai ms p ai d u n d er t h e St at e’s M e di c ai d pr o gr a m. T h es e pr es cri pti o ns, w hi c h c all e d f or at l e ast 3 2 0 M M Es p er d a y of N u c y nt a d uri n g t h e v ast m aj orit y of t h e p eri o d, w er e writt e n b y Pr a ctiti o n er A. iii. N e w Y or k M e di c ai d P ati e nt F, w h o w as di a g n os e d wit h r a di c ulitis, u ns p e cifi e d, r e c ei v e d 3 5 pr es cri pti o ns f or N u c y nt a — t ot ali n g a 1, 0 4 0-d a y s u p pl y —b et w e e n N o v e m b er 2 0 1 1 a n d S e pt e m b er 2 0 1 3, at a c ost of $ 1 3, 1 0 1 i n cl ai ms p ai d u n d er t h e St at e’s M e di c ai d pr o gr a m. T h es e pr es cri pti o ns, w hi c h c all e d f or at l e ast 2 4 0 M M Es p er d a y of N u c y nt a d uri n g t h e v ast m aj orit y of t h e p eri o d, w er e writt e n b y Pr a ctiti o n er A. c) All er g a n . As d es cri b e d a b o v e , All er g a n r e p e at e dl y a n d p ersist e ntl y m a d e f als e a n d misl e a di n g st at e m e nts d o w n pl a yi n g t h e ris ks a n d o v erst ati n g t h e b e n efits of 226 233 of 258 INDEX NO. 400016/2018 FILED: SUFFOLK COUNTY CLERK 04/11/2019 11:19 AM NYSCEF DOC. NO. 19 RECEIVED NYSCEF: 04/11/2019 V ersi o n D at e d A pr. 1 0, 2 0 1 9 wit h C ert ai n R e d a cti o ns R e m o v e d P er P arti es' A gr e e m e nt o pi oi ds, i n cl u di n g K a di a n , t hr o u g h u n br a n d e d a n d br a n d e d m ar k eti n g t h at w as t ar g et e d at a n d di d r e a c h N e w Y or k H C Ps. All er g a n’s d et aili n g of , a n d p a y m e nts t o, s p e cifi c N e w Y or k H C Ps c a us e d t h os e H C Ps t o writ e m e di c all y u n n e c ess ar y pr es cri pti o ns f or K a di a n — b y st arti n g n e w p ati e nts o n t h e dr u g, k e e pi n g p ati e nts o n t h e dr u g, a n d pr es cri bi n g t h e dr u g at hi g h er d os a g es. F or e x a m pl e: i. N e w Y or k M e di c ai d P ati e nt G , w h o w as di a g n os e d wit h dis pl a c e m e nt of l u m b ar i nt er v ert e br al dis c wit h o ut m y el o p at h y, r e c eiv e d 1 4 pr es cri pti o ns f or K a di a n— t ot ali n g a 4 2 0-d a y s u p pl y — b et w e e n J a n u ar y 2 0 1 1 a n d N o v e m b er 2 0 1 1, at a c ost of $ 2 1, 4 3 1 i n cl ai ms t h at w er e p ai d u n d er t h e St at e’s M e di c ai d pr o gr a m. T h es e pr es cri pti o ns, w hi c h c all e d f or at l e ast 3 0 0 M M Es p er d a y of K a di a n d uri n g t his e ntir e p eri o d, a n d m or e t h a n 4 0 0 M M Es p er d a y f or t h e m aj orit y of t h e p eri o d, w er e writt e n b y Pr a ctiti o n er B, w h o w as d et ail e d b y All er g a n 4 9 ti m es fr o m 2 0 0 9 t hr o u g h 2 0 1 2. ii. N e w Y or k M e di c ai d P ati e nt H, w h o w as di a g n os e d wit h t h or a ci c or l u m b os a cr al n e uritis or r a di c ulitis, u ns p e cifi e d, r e c ei v e d 6 6 pr es cri pti o ns f or K a di a n— t ot ali n g a 1 9 2 5-d a y s u p pl y — b et w e e n F e br u ar y 2 0 0 8 a n d O ct o b er 2 0 1 4, at a c ost of $ 2 2 8, 1 9 8 i n cl ai ms t h at w er e p ai d u n d er t h e St at e’s M e di c ai d pr o gr a m. T h es e pr es cri pti o ns, w hi c h c all e d f or at l e ast 4 0 0 M M Es p er d a y of K a di a n d uri n g t his e ntir e p eri o d, a n d at l e ast 6 0 0 M M E p er d a y d uri n g t h e m aj orit y of t h e p eri o d, w er e writt e n b y Pr a ctiti o n er C, w h o m All er g a n d et ail e d t hr o u g h 2 0 1 2. d) M alli n c kr o dt. As d es cri b e d a b o v e , M alli n c kr o dt r e p e at e dl y a n d p ersist e ntl y m a d e f als e a n d misl e a di n g st at e m e nts d o w n pl a yi n g t h e ris ks a n d o v erst ati n g t h e b e n efits of o pi oi ds, i n cl u di n g E x al g o , t hr o u g h u n br a n d e d a n d br a n d e d m ar k eti n g t h at w as t ar g et e d at a n d di d r e a c h N e w Y or k H C Ps. M alli n c kr o dt’s d et aili n g of , a n d p a y m e nts t o , s p e cifi c N e w Y or k H C Ps c a us e d t h os e H C Ps t o writ e m e di c all y u n n e c ess ar y pr es cri pti o ns f or E x al g o — b y st arti n g n e w p ati e nts o n t h e dr u g, k e e pi n g p ati e nts o n t h e dr u g, a n d pr es cri bi n g t h e dr u g at hi g h er d os a g es. F or e x a m pl e: i. N e w Y or k M e di c ai d P ati e nt I, w h o w as di a g n os e d wit h t h or a ci c or l u m b os a cr al n e uritis or r a di c ulitis, u ns p e cifi e d, r e c ei v e d 2 2 pr es cri pti o ns 227 234 of 258 INDEX NO. 400016/2018 FILED: SUFFOLK COUNTY CLERK 04/11/2019 11:19 AM NYSCEF DOC. NO. 19 RECEIVED NYSCEF: 04/11/2019 V ersi o n D at e d A pr. 1 0, 2 0 1 9 wit h C ert ai n R e d a cti o ns R e m o v e d P er P arti es' A gr e e m e nt f or E xal g o — t ot ali n g a 6 6 0-d a y s u p pl y — b et w e e n J a n u ar y 2 0 1 1 a n d M ar c h 2 0 1 4, at a c ost of $ 4 0, 1 5 5 i n cl ai ms t h at w er e p ai d u n d er t h e St at e’s M e di c ai d pr o gr a m. T h es e pr es cri pti o ns, w hi c h c all e d f or at l e ast 1 9 0 M M Es p er d a y of E x al g o d uri n g t h e v ast m aj orit y of t his p eri o d, w er e writt e n b y Pr a ctiti o n er D, w h o w as d et ail e d b y M alli n c kr o dt 3 5 5 ti m es fr o m M a y 2 0 1 0 t hr o u g h A pril 2 0 1 4. M alli n c kr o dt p ai d Pr a ctiti o n er D — w h o w as t h e t o p n ati o n al pr es cri b er of E x al g o d uri n g t h at p eri o d— $ 1 5, 0 0 0 t o $ 2 0 , 0 0 0 p er y e ar t o pr o m ot e E x al g o as p art of its s p e a k ers’ b ur e a u. I n 2 0 1 3, M alli n c kr o dt’s C E O w as i nf or m e d a b o ut t h e c o m p a n y’s i nt e nti o n all y d e c e pti v e st at e m e nt t o t h e m e di a i n w hi c h t h e c o m p a n y di d n ot dis cl os e t h at t h e c o m p a n y p ai d Pr a ctiti o n er D t o pr o m ot e E x al g o. ii. N e w Y or k M e di c ai d P ati e nt J , w h o w as di a g n os e d wit h p ostl a mi n e ct o m y s y n dr o m e, l u m b ar r e gi o n, r e c ei v e d 1 9 pr es cri pti o ns f or E x al g o — t ot ali n g a 5 4 0- d a y s u p pl y — b et w e e n J ul y 2 0 1 1 a n d M a y 2 0 1 3, at a c ost of $ 3 0, 5 5 0 i n cl ai ms t h at w er e p ai d u n d er t h e St at e’s M e di c ai d pr o gr a m. T h es e pr es cri pti o ns, w hi c h c all e d f or at l e ast 1 9 0 M M Es p er d a y of E x al g o d uri n g t h e m aj orit y of t h e p eri o d, w er e writt e n b y Pr a ctiti o n er D. iii. N e w Y or k M e di c ai d P ati e nt K , w h o w as di a g n os e d wit h t h or a ci c or l u m b os a cr al n e uritis or r a di c ulitis, u ns p e cifi e d a n d l u m b a g o, r e c ei v e d 2 0 pr es cri pti o ns f or E x al g o — t ot ali n g a 5 8 5-d a y s u p p l y— b et w e e n M a y 2 0 1 0 (s e v er al w e e ks aft er t h e first d et aili n g visit t o t his H C P) a n d A u g ust 2 0 1 3, at a c ost of $ 3 8, 2 6 6 i n cl ai ms p ai d u n d er t h e St at e’s M e di c ai d pr o gr a m. T h es e pr es cri pti o ns, w hi c h c all e d f or at l e ast 1 9 0 M M Es p er d a y of E x al g o d uri n g t h e v ast m aj orit y of t his p eri o d, w er e writt e n b y Pr a ctiti o n er D. e) E n d o. As d es cri b e d a b o v e , E n d o r e p e at e dl y a n d p ersist e ntl y m a d e f als e a n d misl e a di n g st at e m e nts d o w n pl a yi n g t h e ris ks a n d o v erst ati n g t h e b e n efits of o pi oi ds, i n cl u di n g O p a n a , t hr o u g h u n br a n d e d a n d br a n d e d m ar k eti n g t h at w as t ar g et e d at a n d di d r e a c h N e w Y or k H C Ps. E n d o’s d et aili n g of , a n d p a y m e nts t o , s p e cifi c N e w Y or k H C Ps c a us e d t h os e H C Ps t o writ e m e di c all y u n n e c ess ar y pr es cri pti o ns f or O p a n a — b y st arti n g n e w p ati e nts o n t h e dr u g, k e e pi n g p ati e nts o n t h e dr u g, a n d pr es cri bi n g t h e dr u g at hi g h er d os a g es. F or e x a m pl e: i. N e w Y or k M e di c ai d P ati e nt L , w h o w as di a g n os e d wit h t h or a ci c or l u m b os a cr al n e uritis or r a di c ulitis, u ns p e cifi e d, r e c ei v e d 2 4 pr es cri pti o ns f or O p a n a— t ot ali n g a 7 1 4-d a y s u p pl y — b et w e e n O ct o b er 2 0 0 9 a n d S e pt e m b er 2 0 1 1, at a c ost of $ 2 1, 4 7 3 i n cl ai ms p ai d u n d er t h e St at e’s M e di c ai d pr o gr a m. T h es e pr es cri pti o ns, w hi c h c all e d f or at l e ast 2 4 0 228 235 of 258 INDEX NO. 400016/2018 FILED: SUFFOLK COUNTY CLERK 04/11/2019 11:19 AM NYSCEF DOC. NO. 19 RECEIVED NYSCEF: 04/11/2019 V ersi o n D at e d A pr. 1 0, 2 0 1 9 wit h C ert ai n R e d a cti o ns R e m o v e d P er P arti es' A gr e e m e nt M M Es p er d a y of O p a n a d uri n g t h e v ast m aj orit y of t h e p eri o d, a n d m or e t h a n 3 6 0 M M Es p er d a y d uri n g t h e m aj orit y of t h e p eri o d, w er e writt e n b y Pr a ctiti o n er E, w h o w as d et ail e d b y E n d o 2 9 4 ti m es fr o m J a n u ar y 1 5, 2 0 0 9 t o S e pt e m b er 1 1, 2 0 1 3. ii. N e w Y or k M e di c ai d P ati e nt M, w h o w as di a g n os e d wit h l u m b a g o, a n d p ostl a mi n e ct o m y s y n dr o m e, l u m b ar r e gi o n, a n d t h or a ci c or l u m b os a cr al n e uritis or r a di c ulitis, u ns p e cifi e d, r e c e i v e d 3 8 pr es cri pti o ns f or O p a n a— t ot ali n g a 1, 1 1 9-d a y s u p pl y — b et w e e n N o v e m b er 2 0 0 9 a n d D e c e m b er 2 0 1 2, at a c ost of $ 3 7, 9 1 2 i n cl ai ms p ai d u n d er t h e St at e’s M e di c ai d pr o gr a m. T h es e pr es cri pti o ns, w hi c h c all e d f or at l e ast 2 4 0 M M Es p er d a y of O p a n a d uri n g t h e v ast m aj orit y of t h e p eri o d, a n d at l e ast 3 6 0 M M Es p er d a y d uri n g t h e m aj orit y of t h e p eri o d, w er e writt e n b y Pr a ctiti o n er E. iii. N e w Y or k M e di c ai d P ati e nt N w as di a g n os e d wit h t h or a ci c or l u m b os a cr al n e uritis or r a di c ulitis, u ns p e cifi e d, a n d r e c ei v e d 2 4 pr es cri pti o ns f or O p a n a — t ot ali n g a 6 1 8-d a y s u p pl y — b et w e e n F e br u ar y 2 0 1 1 a n d M a y 2 0 1 2, at a c ost of $ 2 4, 1 4 0 i n cl ai ms p ai d u n d er t h e St at e’s M e di c ai d pr o gr a m. T h es e pr es cri pti o ns, w hi c h c all e d f or at l e ast 2 4 0 M M Es p er d a y of O p a n a d uri n g t h e e ntir e p eri o d, a n d at l e ast 3 6 0 M M Es p er d a y d uri n g t h e v ast m aj orit y of t h e p eri o d, w er e writt e n b y Pr a ctiti o n er E. f) T e v a . As d es cri b e d a b o v e , T e v a r e p e at e dl y a n d p ersist e ntl y m a d e f als e a n d misl e a di n g st at e m e nts d o w n pl a yi n g t h e ris ks a n d o v erst ati n g t h e b e n efits of o pi oi ds, i n cl u di n g F e nt or a , t hr o u g h u n br a n d e d a n d br a n d e d m ar k eti n g t h at w as t ar g et e d at a n d di d r e a c h N e w Y or k H C Ps. T e v a’s d et aili n g of , a n d p a y m e nts t o , s p e cifi c N e w Y or k H C Ps c a us e d t h os e H C Ps t o writ e m e di c all y u n n e c ess ar y pr es cri pti o ns f or T e v a — b y st arti n g n e w p ati e nts o n t h e dr u g, k e e pi n g p ati e nts o n t h e dr u g, a n d pr es cri bi n g t h e dr u g at hi g h er d os a g es. F or e x a m pl e: i. N e w Y or k M e di c ai d P ati e nt O w as di a g n os e d wit h g e n er ali z e d a n xi et y dis or d er a n d a b d o mi n al p ai n , a n d r e c ei v e d 7 0 pr es cri pti o ns f or F e nt or a— t ot ali n g a 1, 7 5 9-d a y s u p pl y — b et w e e n O ct o b er 2 0 0 8 a n d M ar c h 2 0 1 8, at a c ost of $ 1, 9 9 1, 8 3 7 i n cl ai ms p ai d u n d er t h e St at e’s M e di c ai d pr o gr a m. T h es e pr es cri pti o ns, w hi c h c all e d f or at l e ast 4 0 0 M M Es p er d a y of F e nt or a f or t h e v ast m aj orit y of t h e p eri o d, w er e writt e n b y Dr. G or d o n Fr e e d m a n, a M a n h att a n p ai n m a n a g e m e nt p h y si ci a n w h o m T e v a d et ail e d e xt e nsi v el y , at l e ast as e arl y as 2 0 0 6, a n d p ai d t h o us a n ds of d oll ars f or F e nt or a s p e a k er pr o gr a ms, i n cl u di n g aft er 2 0 1 2 . I n M ar c h 2 0 1 8, t h e U. S. Att or n e y f or t h e S o ut h er n Distri ct of N e w Y or k c h ar g e d Dr. Fr e e d m a n wit h vi ol ati o ns of t h e 229 236 of 258 INDEX NO. 400016/2018 FILED: SUFFOLK COUNTY CLERK 04/11/2019 11:19 AM NYSCEF DOC. NO. 19 RECEIVED NYSCEF: 04/11/2019 V ersi o n D at e d A pr. 1 0, 2 0 1 9 wit h C ert ai n R e d a cti o ns R e m o v e d P er P arti es' A gr e e m e nt 237 of 258 INDEX NO. 400016/2018 FILED: SUFFOLK COUNTY CLERK 04/11/2019 11:19 AM NYSCEF DOC. NO. 19 RECEIVED NYSCEF: 04/11/2019 V ersi o n D at e d A pr. 1 0, 2 0 1 9 wit h C ert ai n R e d a cti o ns R e m o v e d P er P arti es' A gr e e m e nt 238 of 258 INDEX NO. 400016/2018 FILED: SUFFOLK COUNTY CLERK 04/11/2019 11:19 AM NYSCEF DOC. NO. 19 RECEIVED NYSCEF: 04/11/2019 V ersi o n D at e d A pr. 1 0, 2 0 1 9 wit h C ert ai n R e d a cti o ns R e m o v e d P er P arti es' A gr e e m e nt 239 of 258 INDEX NO. 400016/2018 FILED: SUFFOLK COUNTY CLERK 04/11/2019 11:19 AM NYSCEF DOC. NO. 19 RECEIVED NYSCEF: 04/11/2019 V ersi o n D at e d A pr. 1 0, 2 0 1 9 wit h C ert ai n R e d a cti o ns R e m o v e d P er P arti es' A gr e e m e nt 240 of 258 INDEX NO. 400016/2018 FILED: SUFFOLK COUNTY CLERK 04/11/2019 11:19 AM NYSCEF DOC. NO. 19 RECEIVED NYSCEF: 04/11/2019 V ersi o n D at e d A pr. 1 0, 2 0 1 9 wit h C ert ai n R e d a cti o ns R e m o v e d P er P arti es' A gr e e m e nt 241 of 258 INDEX NO. 400016/2018 FILED: SUFFOLK COUNTY CLERK 04/11/2019 11:19 AM NYSCEF DOC. NO. 19 RECEIVED NYSCEF: 04/11/2019 V ersi o n D at e d A pr. 1 0, 2 0 1 9 wit h C ert ai n R e d a cti o ns R e m o v e d P er P arti es' A gr e e m e nt C L AI M S F O R R E LI E F FI R S T C A U S E O F A C TI O N P u bli c N uis a n c e ( All D ef e n d a nts e x c e pt t h e S a c kl er E ntiti es ) 8 1 4. Pl ai ntiff r e all e g e s a n d i n c or p or at es b y r ef er e n c e e a c h a n d e v er y all e g ati o n i n t h e p ar a gr a p hs a b o v e as if t h e s a m e w er e f ull y s et f ort h h er ei n. 8 1 5. R esi d e nts of t h e St at e of N e w Y or k e nj o y c o m m o n ri g hts, i n cl u di n g, wit h o ut li mit ati o n: (i) a n h o n est a n d eff e cti v e m ar k et pl a c e f or h e alt h c ar e tr e at m e nt; (ii) t h e m ai nt e n a n c e of a w ell -r e g ul at e d s yst e m f or t h e m a n uf a ct ur e, distri b uti o n , a n d s al e of c o ntr oll e d s u bst a n c es f or m e di c all y -n e c ess ar y p ur p os es; (iii) p u bli c s af et y a n d p u bli c or d er, u n b ur d e n e d b y t h e i ntr o d u cti o n of f or es e e a bl e d a n g ers s u c h as t h os e c a us e d b y t h e o v er -pr es cri pti o n a n d o v ers u p pl y of c o ntr oll e d s u bst a n c es. 8 1 6. E a c h D ef e n d a nt o w e d a d ut y t o t h e p u bli c n ot t o off e n d, i nt erf er e wit h, or c a us e d a m a g e t o s u c h c o m m o n ri g hts t hr o u g h ill e g al a cti o ns a n d omissi o ns i n vi ol ati o n of a p pli c a bl e l a ws a n d r e g ul ati o ns. 8 1 7. E a c h D ef e n d a nt e n g a g e d i n s u c h a cti o ns a n d o missi o ns w hi c h off e n d, i nt erf er e wit h, a n d/ or c a us e d a m a g e t o t h e p u bli c i n t h e e x er cis e of ri g hts c o m m o n t o all i n vi ol ati o n of s ai d d uti es, i n a m a n n er s u c h as t o e n d a n g er or i nj ur e t h e pr o p ert y, h e alt h, s af et y , or c o mf ort of a c o nsi d er a bl e n u m b er of p ers o ns i n t h e St at e of N e w Y or k, i n t h e c o urs e of t h eir m a n uf a ct ur e , pr o m oti o n, m ar k eti n g, a n d/ or distri b uti o n of o pi oi ds. 8 1 8. E a c h D ef e n d a nt k n e w, or s h o ul d h a v e f or es e e n, t h at its a cti o ns a n d o missi o ns w o ul d r es ult i n off e ns e, i nt erf er e n c e, a n d/ or d a m a g e t o t h e p u bli c i n t h e e x er cis e of c o m m o n ri g hts. 8 1 9. T h e off e ns e, i nt erf er e n c e, a n d/ or d a m a g e t o t h e p u bli c i n t h e e x er cis e of c o m m o n ri g hts c a us e d b y D ef e n d a nts’ c oll e cti v e a cti o ns a n d o missi o ns r e m ai n u n a b at e d. 235 242 of 258 INDEX NO. 400016/2018 FILED: SUFFOLK COUNTY CLERK 04/11/2019 11:19 AM NYSCEF DOC. NO. 19 RECEIVED NYSCEF: 04/11/2019 V ersi o n D at e d A pr. 1 0, 2 0 1 9 wit h C ert ai n R e d a cti o ns R e m o v e d P er P arti es' A gr e e m e nt S E C O N D C A U S E O F A C TI O N Vi ol ati o n of St at e Fi n a n c e L a w § 1 8 9( 1)( a) ( All D ef e n d a nts e x c e pt t h e S a c kl er E ntiti es ) 8 2 0. Pl ai ntiff r e all e g es a n d i n c or p or at es b y r ef er e n c e e a c h a n d e v er y all e g ati o n i n t h e p ar a gr a p hs a b o v e as if t h e s a m e w er e f ull y s et f ort h h er ei n. 8 2 1. E a c h D ef e n d a nt c a us e d t hir d -p art y h e alt h c ar e pr o vi d ers t o pr es e nt f als e cl ai ms f or p a y m e nt of p u bli c m o n e y b y Pl ai ntiff, its p oliti c al s u b di visi o ns, a n d/ or t h eir a g e nts, i n vi ol ati o n of St at e Fi n a n c e L a w § 1 8 9( 1)( a) o n m ulti pl e a n d c o nti n u o us o c c asi o ns o v er t h e p ast d e c a d e. 8 2 2. S p e cifi c all y, i n t h e c o urs e of pr es e nti n g e a c h cl ai m f or r ei m b urs e m e nt of o pi oi d dr u gs pr es cri b e d t o p ati e nts, H C Ps m a d e e x pr ess a n d/ or i m pli e d c ertifi c ati o ns t h at t h e o pi oi d dr u g pr es cri pti o ns b ei n g r ei m b urs e d w er e m e di c all y n e c ess ar y, a n d t h at t h e s er vi c es a n d dr u gs i n q u esti o n w er e ot h er wis e pr o vi d e d i n a c c or d a n c e wit h a p pli c a bl e St at e l a w, i n cl u di n g, wit h o ut li mit ati o n, P u bli c H e alt h L a w § § 3 3 0 0 et s e q. (t h e N e w Y or k C o ntr oll e d S u bst a nc es A ct or “ N Y C S A ”) . 8 2 3. E a c h M a n uf a ct ur er D ef e n d a nt, t hr o u g h its fr a u d ul e nt m ar k eti n g, c a us e d H C Ps t o pr es e nt l e g all y f als e c ertifi c ati o ns t h at pr es cri pti o ns w er e m e di c all y n e c ess ar y, w h e n t h e y w er e n ot. 8 2 4. E a c h M a n uf a ct ur er D ef e n d a nt a n d e a c h Distri b ut or D ef e n d a nt, t hr o u g h its vi ol ati o ns of t h e N Y C S A , c a us e d H C Ps t o pr es e nt l e g all y a n d/ or f a ct u all y f als e c ertifi c ati o ns t h at t h e o pi oi d dr u g s u p pli es b ei n g r ei m b urs e d h a d b e e n s u p pli e d i n c o m pli a n c e wit h t h e N Y C S A. 8 2 5. T h e f alsit y of t h es e cl ai ms w as m at eri al, i n t h at s u c h f alsit y w o ul d h a v e a n at ur al t e n d e n c y t o aff e ct w h et h er t h e St at e w o ul d d et er mi n e t h at t h e cl ai ms w o ul d b e d e e m e d p er missi bl e. 8 2 6. At t h e ti m e e a c h D ef e n d a nt c a us e d t h es e f als e cl ai ms t o b e pr es e nt e d b y t hir d - p art y h e alt h c ar e pr o vi d ers , it h a d a ct u al k n o wl e d g e a n d/ or a ct e d i n d eli b er at e i g n or a n c e of t h e tr ut h or 236 243 of 258 INDEX NO. 400016/2018 FILED: SUFFOLK COUNTY CLERK 04/11/2019 11:19 AM NYSCEF DOC. NO. 19 RECEIVED NYSCEF: 04/11/2019 V ersi o n D at e d A pr. 1 0, 2 0 1 9 wit h C ert ai n R e d a cti o ns R e m o v e d P er P arti es' A gr e e m e nt f alsit y of t h e i nf or m ati o n, a n d/ or r e c kl essl y disr e g ar d e d t h at t h e y w er e c a usi n g t h os e cl ai ms t o b e l e g all y a n d/ or f a ct u all y f als e. 8 2 7. As a r es ult of e a c h D ef e n d a nt c a usi n g s u c h f als e cl ai ms t o b e s u b mitt e d b y H C Ps i n vi ol ati o n of St at e Fi n a n c e L a w § 1 8 9( 1)( a), Pl ai ntiff s uff er e d d a m a g es, i n cl u di n g, wit h o ut li mit ati o n, t h e a m o u nt of t h e cl ai ms p ai d, a n d t h e c o ns e q u e nti al i nj uri es r es ulti n g fr o m p ati e nts’ r e c ei pt of i m pr o p erl y pr es cri b e d a n d/ or su p pli e d o pi oi d dr u gs. T HI R D C A U S E O F A C TI O N Vi ol ati o n of St at e Fi n a n c e L a w § 1 8 9( 1)( b) ( All D ef e n d a nts e x c e pt t h e S a c kl er E ntiti es ) 8 2 8. Pl ai ntiff r e all e g es a n d i n c or p or at es b y r ef er e n c e e a c h a n d e v er y all e g ati o n i n t h e p ar a gr a p hs a b o v e as if t h e s a m e w er e f ull y s et f ort h h er ei n. 8 2 9. E a c h D ef e n d a nt h as m a d e f als e st at e m e nts a n d/ or r e c or ds t h at w er e m at eri al t o cl ai ms pr es e nt e d b y H C Ps f or p a y m e nt of p u bli c m o n e y b y Pl ai ntiff, its p oliti c al s u b di visi o ns, a n d/ or t h eir a g e nts, i n vi ol ati o n of St at e Fi n a n c e L a w § 1 8 9( 1)( b) o n m ulti pl e a n d c o nti n u o us o c c asi o ns o v er t h e p ast d e c a d e . 8 3 0. S p e cifi c all y, i n t h e c o urs e of pr es e nti n g e a c h cl ai m f or r ei m b urs e m e nt of o pi oi d dr u gs pr es cri b e d t o p ati e nts, H C Ps m a d e e x pr ess a n d/ or i m pli e d c ertifi c ati o ns t h at t h e o pi oi d dr u g pr es cri pti o ns b ei n g r ei m b urs e d w er e m e di c all y n e c ess ar y, a n d t h at t h e s er vi c es a n d dr u gs i n q u esti o n w er e ot h er wis e pr o vi d e d i n a c c or d a n c e wit h a p pli c a bl e St at e l a w, i n cl u di n g, wit h o ut li mit ati o n, P u bli c H e alt h L a w § § 3 3 0 0 et s e q. (t h e N e w Y or k C o ntr oll e d S u bst a n c es A ct or “ N Y C S A ”) . 8 3 1. E a c h M a n uf a ct ur er D ef e n d a nt, i n t h e c o urs e of its fr a u d ul e nt m ar k eti n g, m a d e f als e st at e m e nts a n d/ or r e c or ds m at eri al t o e a c h cl ai m pr es e nt e d b y H C Ps t h at ass ert e d t h at pr es cri pti o ns w er e m e di c all y n e c ess ar y, w h e n t h e y w er e n ot. 237 244 of 258 INDEX NO. 400016/2018 FILED: SUFFOLK COUNTY CLERK 04/11/2019 11:19 AM NYSCEF DOC. NO. 19 8 3 2. RECEIVED NYSCEF: 04/11/2019 V ersi o n D at e d A pr. 1 0, 2 0 1 9 wit h C ert ai n R e d a cti o ns R e m o v e d P er P arti es' A gr e e m e nt Eac h M a n uf a ct ur er D ef e n d a nt a n d e a c h Distri b ut or D ef e n d a nt m a d e f als e st at e m e nts a n d/ or r e c or ds c o n c er ni n g its c o m pli a n c e wit h t h e N Y C S A t h at w er e m at eri al t o e a c h cl ai m pr es e nt e d b y H C Ps t h at c ertifi e d t h at t h e s u p pli es b ei n g r ei m b urs e d h a d b e e n pr o vi d e d i n c o m pli a n c e wit h t h e N Y C S A. 8 3 3. At t h e ti m e e a c h D ef e n d a nt m a d e t h es e f als e st at e m e nts, it h a d a ct u al k n o wl e d g e a n d/ or a ct e d i n d eli b er at e i g n or a n c e of t h e tr ut h or f alsit y of t h e i nf or m ati o n, a n d/ or r e c kl essl y disr e g ar d e d t h at t h e y w er e c a usi n g t h os e cl ai ms t o b e l e g all y a n d/ or f a ct u all y f als e. 8 3 4. T h e f alsit y of t h es e st at e m e nts a n d/ or r e c or ds w as m at eri al, i n t h at s u c h f alsit y w o ul d h a v e a n at ur al t e n d e n c y t o aff e ct w h et h er t h e St at e w o ul d d et er mi n e t h at t h e cl ai ms w o ul d b e d e e m e d p er missi bl e. 8 3 5. As a r es ult of e a c h D ef e n d a nt m a ki n g s u c h f als e st at e m e nts a n d/ or r e c or ds m at eri al t o cl ai ms pr es e nt e d b y t hir d-p art y h e alt h c ar e pr o vi d ers i n vi ol ati o n of St at e Fi n a n c e L a w § 1 8 9( 1)( a), Pl ai ntiff s uff er e d d a m a g es, i n cl u di n g, wit h o ut li mit ati o n, t h e a m o u nt of t h e cl ai ms p ai d, a n d t h e c o ns e q u e nti al i nj uri es r es ulti n g fr o m p ati e nts’ r e c ei pt of i m pr o p erl y pr es cri b e d a n d/ or s u p pli e d o pi oi d dr u gs. F O U R T H C A U S E O F A C TI O N Vi ol ati o n of St at e Fi n a n c e L a w § 1 8 9( 1)( c) ( All D ef e n d a nts e x c e pt t h e S a c kl er E ntiti es ) 8 3 6. Pl ai ntiff r e all e g es a n d i n c or p or at es b y r ef er e n c e e a c h a n d e v er y all e g ati o n i n t h e p ar a gr a p hs a b o v e as if t h e s a m e w er e f ull y s et f ort h h er ei n. 8 3 7. Eac h D ef e n d a nt k n o wi n gl y a gr e e d, e x pli citl y i n c o m m u ni c ati o ns e x cl usi v el y i n t h e p oss essi o n of D ef e n d a nts, a n d/ or i m pli citl y as e vi d e n c e d b y t h e a cts s et f ort h a b o v e, t h at c oll e cti v el y t h e y w o ul d vi ol at e St at e Fi n a n c e L a w § § 1 8 9( 1)( a) a n d/ or ( b). 238 245 of 258 INDEX NO. 400016/2018 FILED: SUFFOLK COUNTY CLERK 04/11/2019 11:19 AM NYSCEF DOC. NO. 19 8 3 8. RECEIVED NYSCEF: 04/11/2019 V ersi o n D at e d A pr. 1 0, 2 0 1 9 wit h C ert ai n R e d a cti o ns R e m o v e d P er P arti es' A gr e e m e nt E a c h D ef e n d a nt c o m mitt e d at l e ast o n e o v ert a ct i n f urt h er a n c e of t his c o ns pir a c y, as s et f ort h a b o v e. 8 3 9. As a r es ult of D ef e n d a nts’ c o ns pir a c y t o vi ol at e St at e Fi n a n c e L a w § § 1 8 9( 1)( a) a n d/ or ( b) , Pl ai ntiff s uff er e d h as d a m a g es, i n cl u di n g, wit h o ut li mit ati o n, t h e a m o u nt of t h e cl ai ms p ai d, a n d t h e c o ns e q u e nti al i nj uri es r es ulti n g fr o m p ati e nts’ r e c ei pt of i m pr o p erl y pr es cri b e d a n d/ or s u p pli e d o pi oi d dr u gs. FI F T H C A U S E O F A C TI O N Vi ol ati o n of N. Y. S o ci al S e r vi c es L a w § 1 4 5- b ( All D ef e n d a nts e x c e pt t h e S a c kl er E ntiti es ) 8 4 0. Pl ai ntiff r e all e g es a n d i n c or p or at es b y r ef er e n c e e a c h a n d e v er y all e g ati o n i n t h e p ar a gr a p hs a b o v e as if t h e s a m e w er e f ull y s et f ort h h er ei n. 8 4 1. E ac h D ef e n d a nt k n o wi n gl y ma de o ne or m or e f als e st at e m e nts a n d/or r e pr es e nt ati o ns, or d eli b er at el y c o n c e al e d at l e ast o n e m at eri al f a ct, or ot h er wis e c o n d u ct e d a fr a u d ul e nt s c h e m e or d e vi c e, att e m pti n g t o o bt ai n or o bt ai ni n g p a y m e nt, o n b e h al f of its elf or ot h ers, fr o m p u bli c f u n ds f or s er vi c es or s u p pli es f ur nis h e d or p ur p ort e dl y f ur nis h e d p urs u a nt t o C h a pt er 5 5 of t h e S o ci al S er vi c es L a w, i n vi ol ati o n of S S L § 1 4 5- b. 8 4 2. B y r e as o n of e a c h D ef e n d a nt’s vi ol ati o n (s) of S S L § 1 4 5 - b, Pl ai ntiff h as b e e n d a m a g e d t hr o u g h t h e p a y m e nts of p u bli c f u n ds e a c h s u c h D ef e n d a nt f als el y i n d u c e d t h e St at e of N e w Y or k a n d/ or its l o c al s o ci al s er vi c es distri cts t o m a k e t o t hir d -p art y h e alt h c ar e pr o vi d ers. SI X T H C A U S E O F A C TI O N Vi ol ati o n of N. Y. G e n e r al B usi n ess L a w § 3 4 9 (All M a n uf a ct ur er D ef e n d a nts e x c e pt t h e S a c kl er E ntiti es ) 8 4 3. Pl ai ntiff r e all e g es a n d i n c or p or at es b y r ef er e n c e e a c h a n d e v er y all e g ati o n i n t h e p ar a gr a p hs a b o v e as if t h e s a m e w er e f ull y s et f ort h h er ei n. 239 246 of 258 INDEX NO. 400016/2018 FILED: SUFFOLK COUNTY CLERK 04/11/2019 11:19 AM NYSCEF DOC. NO. 19 8 4 4. RECEIVED NYSCEF: 04/11/2019 V ersi o n D at e d A pr. 1 0, 2 0 1 9 wit h C ert ai n R e d a cti o ns R e m o v e d P er P arti es' A gr e e m e nt E a c h M a n uf a ct ur er D ef e n d a nt e n g a g e d i n d e c e pti v e pr a cti c es i n t h e c o n d u ct of b usi n ess, tr a d e a n d/ or c o m m er c e i n N e w Y or k St at e, i n vi ol ati o n of G B L § 3 4 9( a) i n t h e c o urs e of m a n uf a ct uri n g, s elli n g, distri b uti n g, pr o m oti n g, a n d/ or m ar k eti n g o pi oi d dr u gs, as s et f ort h a b o v e. 8 4 5. T h e Att or n e y G e n er al ti m el y pr o vi d e d e a c h M a n uf a ct ur er D ef e n d a nt wit h t h e pr e - litig ati o n n oti c e r e q uir e d b y G B L § 3 4 9( c). 8 4 6. Eac h M a n uf a ct ur er D ef e n d a nt h as d a m a g e d Pl ai ntiff a n d n u m er o us ot h er i n di vi d u als a n d e ntiti es r esi d e nt i n N e w Y or k t hr o u g h its d e c e pti v e pr a cti c es i n vi ol ati o n of G B L § 3 4 9 ( a). 8 4 7. E a c h M a n uf a ct ur er D ef e n d a nt h as wr o n gf ull y o bt ai n e d m o n e y a n d/ or pr o p ert y, dir e ctl y a n d/ or i n dir e ctl y, b y t h es e d e c e pti v e pr a cti c es fr o m Pl ai ntiff a n d n u m er o us ot h er i n di vi d u als a n d e ntiti es r esi d e nt i n N e w Y or k. S E V E N T H C A U S E O F A C TI O N Vi ol ati o n of N. Y. G e n e r al B usi n ess L a w § 3 5 0 (All M a n uf a ct ur er D ef e n d a nts e x c e pt t h e S a c kl er E ntiti es ) 8 4 8. Pl ai ntiff r e all e g es a n d i n c or p or at es b y r ef er e n c e e a c h a n d e v er y all e g ati o n i n t h e p ar a gr a p hs a b o v e as if t h e s a m e w er e f ull y s et f ort h h er ei n. 8 4 9. E a c h M a n uf a ct ur er D ef e n d a nt m a d e r e pr es e nt ati o ns a n d/ or o missi o ns of f a ct t h at w er e m at eri all y misl e a di n g, a n d t h er e b y m a d e f als e a d v ertis e m e nts i n t h e c o n d u ct of b usi n ess, tr a d e a n d/ or c o m m er c e i n N e w Y or k St at e, i n vi ol ati o n of G B L § 3 5 0, i n t h e c o urs e of m a n uf a ct uri n g, s elli n g, distri b uti n g, pr o m oti n g, a n d/ or m ar k eti n g o pi oi d dr u gs, as s et f ort h a b o v e. 240 247 of 258 INDEX NO. 400016/2018 FILED: SUFFOLK COUNTY CLERK 04/11/2019 11:19 AM NYSCEF DOC. NO. 19 8 5 0. RECEIVED NYSCEF: 04/11/2019 V ersi o n D at e d A pr. 1 0, 2 0 1 9 wit h C ert ai n R e d a cti o ns R e m o v e d P er P arti es' A gr e e m e nt T h e Att or n e y G e n er al ti m el y pr o vi d e d e a c h M a n uf a ct ur er D ef e n d a nt wit h t h e pr e - litig ati o n n oti c e r e q uir e d b y G B L § 3 4 9( c). 8 5 1. Eac h M a n uf a ct ur er D ef e n d a nt h as d a m a g e d Pl ai ntiff a n d n u m er o us ot h er i n di vi d u als a n d e ntiti es r esi d e nt i n N e w Y or k t hr o u g h its f als e a d v ertis e m e nts i n vi ol ati o n of G B L § 3 5 0. EI G H T H C A U S E O F A C TI O N Vi ol ati o n of t h e N e w Y o r k C o nt r oll e d S u bst a n c e A ct ( P u bli c H e alt h L a w § § 3 3 0 0 et s e q. ) ( All D ef e n d a nts e x c e pt t h e S a c kl er D ef e n d a nts ) 8 5 2. Pl ai ntiff r e all e g es a n d i n c or p or at es b y r ef er e n c e e a c h a n d e v er y all e g ati o n i n t h e p ar a gr a p hs a b o v e as if t h e s a m e w er e f ull y s et f ort h h er ei n . 8 5 3. E a c h D ef e n d a nt is stri ctl y li a bl e f or vi ol ati n g t h e N Y C S A i n e a c h s e p ar at e i nst a n c e i n w hi c h it: (i) f ail e d t o m ai nt ai n eff e cti v e c o ntr ols t o pr e v e nt t h e di v ersi o n of c o ntr oll e d s u bst a n c es; (ii) f ail e d t o r e p ort s us pi ci o us or d ers f or c o ntr oll e d s u bst a n c es; (iii) f ail e d t o r e p ort a ct u al or all e g e d i n ci d e nts of k n o w n or p ossi bl e di v ersi o n of c o ntr oll e d s u bst a n c es; (i v) f ail e d t o pr o vi d e tr ut hf ul st at e m e nts i n its li c e nsi n g fili n gs wit h N e w Y or k a ut h oriti es; ( v) a n d/ or f ail e d t o n otif y N e w Y or k a ut h oriti es w h e n its a cti o ns a n d/ or o missi o ns c a us e d it t o vi ol at e t h e N Y C S A . 8 5 4. In a d diti o n a n d/ or i n t h e alt er n ati v e, e a c h D ef e n d a nt is stri ctl y li a bl e f or vi ol ati n g t h e N Y C S A i n e a c h a n d e v er y o n e of t h e i nst a n c es i n w hi c h it m a n uf a ct ur e d, s ol d, p oss ess e d, tr a ns p ort e d a n d/ or distri b ut e d o pi oi ds i n N e w Y or k, d u e t o t h e o n g oi n g n at ur e of t h e a b o v e vi ol ati o ns, a n d/ or its l a c k of a v ali d li c e ns e t o m a n uf a ct ur e a n d/ or distri b ut e c o ntr oll e d s u bst a n c es i n N e w Y or k. NI N T H C A U S E O F A C TI O N R e p e at e d a n d P e rsist e nt F r a u d i n Vi ol ati o n of N. Y. E x e c uti v e L a w § 6 3( 1 2) ( All D ef e n d a nts e x c e pt t h e S a c kl er E ntiti es ) 241 248 of 258 INDEX NO. 400016/2018 FILED: SUFFOLK COUNTY CLERK 04/11/2019 11:19 AM NYSCEF DOC. NO. 19 8 5 5. RECEIVED NYSCEF: 04/11/2019 V ersi o n D at e d A pr. 1 0, 2 0 1 9 wit h C ert ai n R e d a cti o ns R e m o v e d P er P arti es' A gr e e m e nt Pl ai ntiff r e all e g es a n d i n c or p or at es b y r ef er e n c e e a c h a n d e v er y all e g ati o n i n t h e p ar a gr a p hs a b o v e as if t h e s a m e w er e f ull y s et f ort h h er ei n. 8 5 6. E a c h D ef e n d a nt e n g a g e d i n r e p e at e d a n d/ or p ersist e nt fr a u d i n vi ol ati o n of E x e c ut i v e L a w § 6 3( 1 2) i n t h e c o urs e of its m a n uf a ct ur e, pr o m oti o n, m ar k eti n g, a n d/ or distri b uti o n of o pi oi ds i n N e w Y or k St at e. 8 5 7. E a c h M a n uf a ct ur er D ef e n d a nt e n g a g e d i n r e p e at e d a n d/ or p ersist e nt fr a u d in vi ol ati o n of E x e c uti v e L a w § 6 3( 1 2) t hr o u g h its: (i) fr a u dul e nt s c h e m e t o pr o m ot e a n d m ar k et o pi oi ds d es cri b e d a b o v e; a n d/ or (ii) f als e st at e m e nts a n d/ or o missi o ns t o t h e St at e o n e a c h of its A p pli c ati o ns t o E n g a g e i n a C o ntr oll e d S u bst a n c e A cti vit y. 8 5 8. E a c h Distri b ut or D ef e n d a nt e n g a g e d i n r e p e at e d a n d/ or p ersist e nt fr a u d i n vi ol ati o n of E x e c uti v e L a w § 6 3( 1 2) t hr o u g h its f als e st at e m e nts a n d/ or o missi o ns t o t h e St at e o n e a c h of its A p pli c ati o ns t o E n g a g e i n a C o ntr oll e d S u bst a n c e A cti vit y. 8 5 9. E a c h D ef e n d a nt d a m a g e d Pl ai ntiff a n d n u m er o us ot h er i n di vi d u als a n d e ntiti es r esi d e nt i n N e w Y or k, a n d o bt ai n e d ill-g ott e n pr ofits, t hr o u g h its r e p e at e d a n d p ersist e nt fr a u d i n vi ol ati o n of E x e c uti v e L a w § 6 3( 1 2). T E N T H C A U S E O F A C TI O N R e p e at e d a n d P e rsist e nt Ill e g alit y i n Vi ol ati o n of N. Y. E x e c uti v e L a w § 6 3( 1 2) ( All D ef e n d a nts e x c e pt t h e S a c kl er E ntiti es ) 8 6 0. Pl ai ntiff r e all e g es a n d i n c or p or at es b y r ef er e n c e e a c h a n d e v er y all e g ati o n i n t h e p ar a gr a p hs a b o v e as if t h e s a m e w er e f ull y s et f ort h h er ei n. 8 6 1. E a c h D ef e n d a nt e n g a g e d i n r e p e at e d a n d/ or p ersist e nt ill e g alit y i n vi ol ati o n of E x e c uti v e L a w § 6 3( 1 2) i n t h e c o urs e of its m a n uf a ct ur e, pr o m oti o n, m ar k eti n g, a n d/ or distri b uti o n of o pi oi ds i n N e w Y or k St at e. 242 249 of 258 INDEX NO. 400016/2018 FILED: SUFFOLK COUNTY CLERK 04/11/2019 11:19 AM NYSCEF DOC. NO. 19 8 6 2. RECEIVED NYSCEF: 04/11/2019 V ersi o n D at e d A pr. 1 0, 2 0 1 9 wit h C ert ai n R e d a cti o ns R e m o v e d P er P arti es' A gr e e m e nt E a c h M a n uf a ct ur er D ef e n d a nt e n g a g e d i n r e p e at e d a n d/ or p ersist e nt ill e g alit y in vi ol ati o n of E x e c uti v e L a w § 6 3( 1 2) t hr o u g h its vi ol ati o ns of: (i) St at e Fi n a n c e L a w § 1 8 9; (ii) S o ci al S er vi c es L a w § 1 4 5 -b; (iii) G e n er al B usi n ess L a w § 3 4 9; (i v) G e n er al B usi n ess L a w § 3 5 0; a n d/ or ( v) P u bli c H e alt h L a w § § 3 3 0 0 et s e q. (t h e N e w Y or k C o ntr oll e d S u bst a n c es A ct or “ N Y C S A ”). 8 6 3. E a c h Distri b u t or D ef e n d a nt e n g a g e d i n r e p e at e d a n d/ or p ersist e nt ill e g alit y i n vi ol ati o n of E x e c uti v e L a w § 6 3( 1 2) t hr o u g h its vi ol ati o ns of: (i) St at e Fi n a n c e L a w § 1 8 9; (ii) S o ci al S er vi c es L a w § 1 4 5 -b; a n d/ or (iii) P u bli c H e alt h L a w § § 3 3 0 0 et s e q. (t h e N e w Y or k C o n tr oll e d S u bst a n c es A ct or “ N Y C S A ”). 8 6 4. E a c h D ef e n d a nt d a m a g e d Pl ai ntiff a n d n u m er o us ot h er i n di vi d u als a n d e ntiti es r esi d e nt i n N e w Y or k, a n d o bt ai n e d ill-g ott e n pr ofits, t hr o u g h its r e p e at e d a n d p ersist e nt ill e g alit y i n vi ol ati o n of E x e c uti v e L a w § 6 3( 1 2). E L E V E N T H C A U S E O F A C TI O N C o m m o n- L a w F r a u d ( All D ef e n d a nts e x c e pt t h e S a c kl er E ntiti es ) 8 6 5. Pl ai ntiff r e all e g es a n d i n c or p or at es b y r ef er e n c e e a c h a n d e v er y all e g ati o n i n t h e p ar a gr a p hs a b o v e as if t h e s a m e w er e f ull y s et f ort h h er ei n. 8 6 6. E a c h D ef e n d a nt k n o wi n gl y m a d e m at eri al misr e pr es e nt ati o ns a n d/ or o missi o ns of f a cts t o Pl ai ntiff, its a g e nts a n d e m pl o y e es, a n d t hir d p arti es, i n or d er t o i n d u c e t h e m t o li c e ns e t h e m t o d o b usi n ess, a n d/ or p ur c h as e, a d mi nist er, a n d c o ns u m e o pi oi ds, as s et f ort h i n d et ai l a b o v e. 8 6 7. E a c h D ef e n d a nt k n e w at t h e ti m e t h at it m a d e t h es e misr e pr es e nt ati o ns a n d / or o missi o ns t h at t h e y w er e f als e , or alt er n ati v el y, r e c kl essl y disr e g ar d e d t h eir f alsit y. 8 6 8. E a c h D ef e n d a nt i nt e n d e d t h at Pl ai ntiff, H C P’s, p ati e nts, a n d/ or ot h ers w o ul d r el y o n its misr e pr es e nt ati o ns a n d/ or o missi o ns. 243 250 of 258 INDEX NO. 400016/2018 FILED: SUFFOLK COUNTY CLERK 04/11/2019 11:19 AM NYSCEF DOC. NO. 19 8 6 9. RECEIVED NYSCEF: 04/11/2019 V ersi o n D at e d A pr. 1 0, 2 0 1 9 wit h C ert ai n R e d a cti o ns R e m o v e d P er P arti es' A gr e e m e nt N u m er o us a g e nts of Pl ai ntiff, as w ell as H C Ps , p ati e nts, a n d ot h ers di d i n f a ct r e as o n a bl y r ely u p o n e a c h D ef e n d a nt’s misr e pr es e nt ati o ns a n d / or o missi o ns. 8 7 0. B y r e as o n of t h eir r eli a n c e o n e a c h D ef e n d a nt’s misr e pr es e nt ati o ns a n d o missi o ns of m at eri al f a ct, Pl ai ntiff s uff er e d dir e ct a n d c o ns e q u e nti al e c o n o mi c i nj uri es. 8 7 1. Eac h D ef e n d a nt’s fr a u d ul e nt c o n d u ct w as e gr e gi o us, dir e ct e d at t h e p u bli c g e n er all y , a n d i n v ol v e d a hi g h d e gr e e of m or al c ul p a bilit y. T W E L F T H C A U S E O F A C TI O N C o m m o n- L a w G r oss N e gli g e n c e ( All D ef e n d a nts e x c e pt t h e S a c kl er E ntiti es ) 8 7 2. Pl ai ntiff r e all e g es a n d i n c or p or at es b y r ef er e n c e e a c h a n d e v er y all e g ati o n i n t h e p ar a gr a p hs a b o v e as if t h e s a m e w er e f ull y s et f ort h h er ei n . 8 7 3. E a c h D ef e n d a nt h a d a d ut y of c ar e t o Pl ai ntiff a n d r esi d e nts of N e w Y or k t o c o n d u ct its b usi n ess of m a n uf a ct uri n g, pr o m oti n g , m ar k eti n g, a n d/ or distri b uti n g o pi oi ds i n c o m pli a n c e wit h a p pli c a bl e St at e l a w. 8 7 4. E a c h of t h e D ef e n d a nts br e a c h e d its d uti es t hr o u g h its f als e a n d misl e adi n g st at e m e nts a n d o missi o ns , a n d/ or its vi ol ati o ns of t h e N e w Y or k C o ntr oll e d S u bst a n c es A ct, i n t h e c o urs e of its m a n uf a ct ur e, distri b uti o n, s al e, a n d/ or m ar k eti n g of o pi oi d dr u gs wit hi n t h e St at e. 8 7 5. As a f or es e e a bl e c o ns e q u e n c e of e a c h D ef e n d a nt ’s br e a c hes of its d uti es, Pl ai ntiff s uff er e d dir e ct a n d c o ns e q u e nti al e c o n o mi c i nj uri es. 8 7 6. E a c h D ef e n d a nt ’s br e a c h es of its d uti es i n v ol v e d a n i n diff er e n c e t o d ut y a m o u nti n g t o r e c kl ess n ess a n d a cti o ns o utsi d e t h e b o u n ds of r e as o n, s o as t o c o nstit ut e gr oss n e gli g e n c e. 8 7 7. E a c h D ef e n d a nt’ s gr oss n e gli g e n c e w as e gr e gi o us, dir e ct e d at t h e p u bli c g e n er all y , a n d i n v ol v e d a hi g h d e gr e e of m or al c ul p a bilit y. T HI R T E E N T H C A U S E O F A C TI O N C o m m o n- L a w Willf ul Mis c o n d u ct 244 251 of 258 INDEX NO. 400016/2018 FILED: SUFFOLK COUNTY CLERK 04/11/2019 11:19 AM NYSCEF DOC. NO. 19 RECEIVED NYSCEF: 04/11/2019 V ersi o n D at e d A pr. 1 0, 2 0 1 9 wit h C ert ai n R e d a cti o ns R e m o v e d P er P arti es' A gr e e m e nt ( All D ef e n d a nts e x c e pt t h e S a c kl er E ntiti es ) 8 7 8. Pl ai ntiff r e all e g es a n d i n c or p or at es b y r ef er e n c e e a c h a n d e v er y all e g ati o n i n t h e p ar a gr a p hs a b o v e as if t h e s a m e w er e f ull y s et f ort h h er ei n . 8 7 9. E a c h D ef e n d a nt c o m mitt e d i nt e nti o n al a cts of a n u nr e as o n a bl e c h ar a ct er i n disr e g ar d of k n o w n or o b vi o us ris ks s o gr e at as t o m a k e it hi g hl y pr o b a bl e t h at h ar m w o ul d r es ult i n t h e c o urs e of its m a n uf a ct ur e, distri b uti o n, s al e, a n d/ or m ar k eti n g of o pi oi d dr u gs wit hi n t h e St at e. 8 8 0. As a c o ns e q u e n c e of e a c h s u c h i nt e nti o n al a ct, Pl ai ntiff s uff er e d dir e ct a n d c o ns e q u e nti al e c o n o mi c i nj uri es. 8 8 1. Eac h D ef e n d a nt’s willf ul mis c o n d u ct w as e gr e gi o us, dir e ct e d at t h e p u bli c g e n er all y , a n d i n v ol v e d a hi g h d e gr e e of m or al c ul p a bilit y. F O U R T E E N T H C A U S E O F A C TI O N U nj ust E n ri c h m e nt ( All D ef e n d a nts) 8 8 2. Pl ai ntiff r e all e g es a n d i n c or p or at es b y r ef er e n c e e a c h a n d e v er y all e g ati o n i n t h e p ar a gr a p hs a b o v e as if t h e s a m e w er e f ull y s et f ort h h er ei n . 8 8 3. As a n e x p e ct e d a n d i nt e n d e d r es ult of e a c h D ef e n d a nt s’ c o ns ci o us a n d c o nti n ui n g wr o n g d oi n g, e a c h h as u nj ustl y e nri c h e d its elf at Pl ai ntiff’s e x p e ns e. 8 8 4. It is a g ai nst e q uit y a n d g o o d c o ns ci e n c e t o p er mit D ef e n d a nts t o r et ai n t h e b e n efits t h e y r e c ei v e d as a r es ult of its wr o n gf ul a n d c o nti n ui n g a cts, pr a cti c es , a n d o missi o ns. F I FT E E N T H C A U S E O F A C TI O N I nt e nti o n all y F r a u d ul e nt C o n v e y a n c e s i n Vi ol ati o n of D ebt o r a n d C r e dit o r L a w § 2 7 6 ( P ur d u e a n d S a c kl er D ef e n d a nts) 8 8 5. Pl ai ntiff r e all e g es a n d i n c or p or at es b y r ef er e n c e e a c h a n d e v er y all e g ati o n i n t h e p ar a gr a p hs a b o v e as if t h e s a m e w er e f ull y s et f ort h h er ei n. 245 252 of 258 INDEX NO. 400016/2018 FILED: SUFFOLK COUNTY CLERK 04/11/2019 11:19 AM NYSCEF DOC. NO. 19 RECEIVED NYSCEF: 04/11/2019 V ersi o n D at e d A pr. 1 0, 2 0 1 9 wit h C ert ai n R e d a cti o ns R e m o v e d P er P arti es' A gr e e m e nt 8 8 6. Pl ai ntiff’s liti g ati o n a g ai nst P ur d u e c o nstit ut es a cl ai m a g ai nst P ur d u e r e n d er i n g t h e St at e a cr e dit or of P ur d u e wit hi n t h e m e a ni n g of D C L § 2 7 0. 8 8 7. All of t h e tr a nsf ers of ass ets fr o m P ur d u e t o t h e S a c kl er D ef e n d a nts d es cri b e d a b o v e c o nstit ut e d c o n v e y a n c es, a n d w er e m a d e wit h a ct u al i nt e nt t o hi n d er d el a y, a n d/ or d efr a u d pr es e nt a n d/ or f ut ur e cr e dit ors of P ur d u e, i n cl u di n g t h e St at e. 8 8 8. A c c or di n gl y, p urs u a nt t o D C L § § 2 7 6, 2 7 6-a, a n d 2 7 9, Pl ai ntiff i s e ntitl e d t o a j u d g m e nt: ( a) r estr ai ni n g all of t h e S a c kl er D ef e n d a nts fr o m dis p osi n g of a n y pr o p ert y; ( b) s etti n g asi d e t h e tr a nsf ers of P ur d u e ass ets a n d pr ofits t o t h e S a c kl er D ef e n d a nts; a n d ( c) or d eri n g d ef e n d a nts t o r et ur n t h e ass ets tr a nsf err e d or e q ui v al e nt v al u e, t o g et h er w it h a n a w ar d of r e as o n a bl e att or n e y’s f e es. SI X T E E N T H C A U S E O F A C TI O N C o nst r u cti v el y F r a u d ul e nt C o n v e y a n c es i n Vi ol ati o n of D e bt o r a n d C r e dit o r L a w § § 2 7 3, 2 7 3- a, 2 7 4, a n d/ o r 2 7 5 ( P ur d u e a n d S a c kl er D ef e n d a nts) 8 8 9. Pl ai ntiff r e all e g es a n d i n c or p or at es b y r ef er e n c e e a c h a n d e v er y all e g ati o n i n t h e p ar a gr a p hs a b o v e as if t h e s a m e w er e f ull y s et f ort h h er ei n. 8 9 0. Pl ai ntiff’s liti g ati o n a g ai nst t h e P ur d u e c o nstit ut es a cl ai m a g ai nst P ur d u e r e n d er i n g t h e St at e a cr e dit or of P ur d u e wit hi n t h e m e a ni n g of D C L § 2 7 0. 8 9 1. All of t h e tr a nsf ers of ass ets fr o m P ur d u e t o t h e S a c kl er D ef e n d a nts d es cri b e d a b o v e c o nstit ut e d c o n v e y a n c es , a n d w er e m a d e wit h o ut f air c o nsi d er ati o n. 8 9 2. At t h e ti m e t h os e c o n v e y a n c es w er e m a d e, P ur d u e: ( a) w as i ns ol v e nt or w o ul d t h er e b y b e r e n d er e d i ns ol v e nt; ( b) w as a d ef e n d a nt i n a n a cti o n f or m o n e y d a m a g es br o u g ht b y Pl ai ntiff; ( c) w as e n g a g e d or a b o ut t o e n g a g e i n a b usi n ess or tr a ns a cti o n f or w hi c h t h e pr o p ert y r e m ai ni n g i n its h a n ds aft er t h e c o n v e y a n c e w as a n u nr e as o n a bl y s m all c a pit al; a n d/ or ( d) i nt e n d e d or b eli e v e d t h at it w o ul d i n c ur d e bts b e y o n d its a bilit y t o p a y as t h e y m at ur e d . 246 253 of 258 INDEX NO. 400016/2018 FILED: SUFFOLK COUNTY CLERK 04/11/2019 11:19 AM NYSCEF DOC. NO. 19 8 9 3. RECEIVED NYSCEF: 04/11/2019 V ersi o n D at e d A pr. 1 0, 2 0 1 9 wit h C ert ai n R e d a cti o ns R e m o v e d P er P arti es' A gr e e m e nt I n a d diti o n a n d/ or i n t h e alt er n ati v e, t h os e c o n v e y a n c es w er e m a d e at a ti m e w h e n P ur d u e w as i ns ol v e nt, n e ari n g i ns ol v e n c y or s u c h c o n v e y a n c es r e n d er e d t h e c o m p a n y i ns ol v e nt b e c a us e P ur d u e’s c o n d u ct r el ati n g t o t h e s al e a n d m ar k eti n g o f P ur d u e’s o pi oi ds w as fr a u d ul e nt fr o m d a y o n e; at n o p oi nt di d P ur d u e a n d t h e S a c kl ers c o n d u ct t h eir b usi n ess wit hi n t h e b o u n d ari es of t h e l a w. 8 9 4. T h e distri b uti o ns of P ur d u e’s o pi oi ds pr ofits l eft P ur d u e wit h u nr e as o n a bl y s m all c a pit al t o p a y off its c ert a i n cr e dit ors i n t h e o pi oi ds liti g ati o n, i n cl u di n g pl ai ntiff N e w Y or k St at e. 8 9 5. A c c or di n gl y, p urs u a nt t o D C L § § 2 7 3, 2 7 3- a, 2 7 4, 2 7 5, a n d 2 7 9, Pl ai ntiff i s e ntitl e d t o a j u d g m e nt: ( a) r estr ai ni n g all of t h e S a c kler D ef e n d a nts fr o m dis p osi n g of a n y pr o p ert y; a n d ( b ) s etti n g asi d e t h e tr a nsf ers of P ur d u e ass ets t o t h e S a c kl er D ef e n d a nts ; a n d ( c) or d eri n g d ef e n d a nts t o r et ur n t h e ass ets tr a nsf err e d or e q ui v al e nt v al u e, t o g et h er wit h a n a w ar d of r e as o n a bl e att or n e y’s f e es. S E V E N T E E N T H C A U S E O F A C TI O N D e cl a r at o r y J u d g m e nt P u rs u a nt t o C P L R § 3 3 0 1 ( All D ef e n d a nts E x c e pt J a nss e n a n d t h e S a c kl er D ef e n d a nts) 8 9 6. Pl ai ntiff r e all e g es a n d i n c or p or at es b y r ef er e n c e e a c h a n d e v er y all e g ati o n i n t h e p ar a gr a p hs a b o v e as if t h e s a m e w er e f ull y s et f ort h h er ei n . 8 9 7. Pl ai ntiff s e e ks r eli ef u n d er C L P R § 3 3 0 1 i n or d er t o d e cl ar e a n d s ettl e t h e ri g hts a n d o bli g ati o ns of t h e p arti es. 8 9 8. E a c h D ef e n d a nt, e x c e pt f or J a nss e n, o bt ai n e d o n e or m or e i niti al a n d/ or r e n e w al li c e ns es fr o m t h e N e w Y or k St at e D e p art m e nt of H e alt h, w hi c h a ut h ori z e d it t o m a n uf a ct ur e, distri b ut e, i m p ort, a n d/ or e x p ort c o ntr oll e d s u bst a n c es wit hi n, i nt o, a n d/ or fr o m t h e St at e. 247 254 of 258 INDEX NO. 400016/2018 FILED: SUFFOLK COUNTY CLERK 04/11/2019 11:19 AM NYSCEF DOC. NO. 19 8 9 9. RECEIVED NYSCEF: 04/11/2019 V ersi o n D at e d A pr. 1 0, 2 0 1 9 wit h C ert ai n R e d a cti o ns R e m o v e d P er P arti es' A gr e e m e nt E a c h s u c h D ef e n d a nt pr o c ur e d e a c h s u c h i niti al a n d/ or r e n e w al li c e ns e u n d er f als e pr et e ns es t hr o u g h f als e a n d/ or misl e a di n g st at e m e nts a n d/ or o missi o ns c o nt ai n e d i n e a c h s u c h D ef e n d a nt’s A p pli c ati o ns t o E n g a g e i n a C o ntr oll e d S u bst a n c e A cti vit y, as s et f ort h a b o v e. 9 0 0. As a r es ult, Pl ai ntiff s e e ks a j u d g m e nt d e cl ari n g t h at e a c h of s u c h D ef e n d a nt’s li c e ns es t o m a n uf a ct ur e, distri b ut e, i m p ort, a n d/ or e x p ort c o ntr oll e d s u bst a n c es wit hi n, i nt o, or fr o m t h e St at e w as v oi d a b i niti o . 248 255 of 258 INDEX NO. 400016/2018 FILED: SUFFOLK COUNTY CLERK 04/11/2019 11:19 AM NYSCEF DOC. NO. 19 RECEIVED NYSCEF: 04/11/2019 V ersi o n D at e d A pr. 1 0, 2 0 1 9 wit h C ert ai n R e d a cti o ns R e m o v e d P er P arti es' A gr e e m e nt P R A Y E R F O R R E LI E F W H E R E F O R E, Pl ai ntiff, T h e P e o pl e of t h e St at e of N e w Y or k, r es p e ctf ull y r e q u ests t h at a j u d g m e nt a n d or d er b e e nt er e d t h at: 1. Dir e cts t h e D ef e n d a nts j oi ntl y a n d s e v er all y t o e n d o w a n a b at e m e nt f u n d wit h s uffi ci e nt c a pit al t o eli mi n at e t h e p u bli c n uis a n c e t h e y ar e r es p o nsi bl e f or cr e ati n g, e x a c er b ati n g, a n d/ or p er p et u ati n g; 2. E nj oi ns e a c h D ef e n d a nt, p urs u a nt t o E x e c uti v e L a w § 6 3( 1 2): a. Fr o m m a n uf a ct ur i n g, distri b ut i n g, s elli n g, or m ar k eti n g o pi oi ds wit hi n t h e St at e u nl ess it c o m pli es wit h h ei g ht e n e d, i n d e p e n d e ntl y-m o nit or e d s af e g u ar ds a g ai nst t h e r e c urr e n c e of its fr a u d ul e nt, ill e g al, a n d/ or u nl a wf ul pr a cti c es, w hi c h ar e t o b e s et f ort h i n a c o m pli a n c e pl a n r e vi e w e d a n d a p pr o v e d b y Pl ai ntiff a n d t h e C o urt; a n d b. T o i ss u e p u bli c c orr e cti v e st at e m e nts r e g ar di n g t h eir f als e a n d misl e a di n g p u bli c st at e m e nts a n d o missi o ns; 3. A w ar ds Pl ai ntiff , p urs u a nt t o St at e Fi n a n c e L a w § 1 8 9: a. T r e bl e d a m a g es, i n cl u di n g c o ns e q u e nti al d a m a g es, c a us e d b y e a c h D ef e n d a nt’s vi ol ati o ns of t h at st at ut e, i n a n a m o u nt t o b e d et er mi n e d at tri al; a n d b. Ci vil p e n alti es fr o m e a c h D ef e n d a nt i n t h e a m o u nt of $ 1 2, 0 0 0 f or e a c h s e p ar at e i nst a n c e i n w hi c h it vi ol at e d t h at st at ut e; 4. A w ar ds Pl ai ntiff, p urs u a nt t o S o ci al S er vi c es L a w § 1 4 5 - b, tr e bl e d a m a g es c a us e d b y e a c h D ef e n d a nt’s vi ol ati o n s of t h at st at ut e, i n a n a m o u nt t o b e d et er mi n e d at tri al; 5. A w ar ds Pl ai ntiff, p urs u a nt t o G e n er al B usi n ess L a w § 3 5 0 - d, ci vil p e n alt i es fr o m e a c h M a n uf a ct ur er D ef e n d a nt i n t h e a m o u nt of $ 5, 0 0 0 for e a c h s e p ar at e i nst a n c e i n w hi c h it e m pl o y e d a d e c e pti v e or u nl a wf ul a ct or pr a cti c e i n vi ol ati o n of G B L Arti cl e 2 2 -A; 6. A w ar ds Pl ai ntiff , p urs u a nt t o G e n er al B usi n ess L a w § 3 4 9 - c, a d diti o n al ci vil p e n alt i es fr o m e a c h M a n uf a ct ur er D ef e n d a nt i n t h e a m o u nt of $ 1 0, 0 0 0 f or e a c h s u c h vi ol ati o n of G B L Arti cl e 2 2 - A it p er p etr at e d a g ai nst t h e el d erl y; 7. A w ar ds Pl ai ntiff, p urs u a nt t o P u bli c H e alt h L a w § 1 2 ( 1), ci vil p e n alti es fr o m e a c h D ef e n d a nt f or e a c h s e p ar at e i nst a n c e i n w hi c h it vi ol ate d t h e N e w Y or k C o ntr oll e d S u bst a n c e A ct, P u bli c H e alt h L a w § § 3 3 0 0 et s e q. , i n t h e a m o u nt of: a. $ 2, 0 0 0 f or e v er y s u c h vi ol ati o n; b. $ 5, 0 0 0 f or e v er y s u bs e q u e nt i nst a n c e of t h e s a m e vi ol ati o n wit hi n t w el v e m o nt hs of t h e first, i n i nst a n c es w h er e t h e vi ol ati o ns w er e a s eri o us t hr e at t o t h e h e alt h a n d s af et y of a n i n di vi d u al or i n di vi d u als; a n d c. $ 1 0, 0 0 0 f or e v er y vi ol ati o n t h at dir e ctl y r es ult e d i n s eri o us p h ysi c al h ar m t o a n y 249 256 of 258 INDEX NO. 400016/2018 FILED: SUFFOLK COUNTY CLERK 04/11/2019 11:19 AM NYSCEF DOC. NO. 19 RECEIVED NYSCEF: 04/11/2019 V ersi o n D at e d A pr. 1 0, 2 0 1 9 wit h C ert ai n R e d a cti o ns R e m o v e d P er P arti es' A gr e e m e nt p ati e nt or p ati e nts. 8. A w ar ds Pl ai ntiff, p urs u a nt t o c o m m o n l a w: a. Dir e ct a n d c o ns e q u e nti al d a m a g es fr o m e a c h D ef e n d a nt c a us e d b y its fr a u d, gr oss n e gli g e n c e, a n d/ or willf ul mis c o n d u ct, i n a n a m o u nt t o b e d et er mi n e d at tri al; b. P u niti v e d a m a g es fr o m e a c h D ef e n d a nt o n a c c o u nt of t h e e gr e gi o us n ess, p u bli cl y dir e ct e d n at ur e, a n d hi g h m or al c ul p a bilit y of its fr a u d, gr oss n e gli g e n c e, a n d/ or willf ul mis c o n d u ct, i n a n a m o u nt t o b e d et er mi n e d at tri al; a n d c. E q uit a bl e dis g or g e m e nt fr o m e a c h D ef e n d a nt of all b e n efits it wr o n gf ull y r e c ei v e d. 9. Dir e cts e a c h D ef e n d a nt, p urs u a nt t o E x e c uti v e L a w § 6 3( 1 2), t o: a. P a y r estit uti o n a n d d a m a g es f or its fr a u d ul e nt a n d/ or ill e g al pr a cti c es t h at vi ol at e d t h at st at ut e a n d c a us e d c o m p e ns a bl e i nj uri es t o Pl ai ntiff or a n y ot h er p ers o n; a n d b. Dis g or g e all pr ofits it wr o n gf ull y o bt ai n e d as a r es ult of its fr a u d ul e nt a n d/ or ill e g al pr a cti c es i n vi ol ati o n of t h at st at ut e; 1 0. Dir e cts e a c h M a n uf a ct ur er D ef e n d a nt, p urs u a nt t o G e n er al B usi n ess L a w § 3 4 9 , t o p a y r estit uti o n of all m o n e y or pr o p ert y it dir e ctl y or i n dir e ctl y o bt ai n e d b y its u nl a wf ul a cts or pr a cti c es i n vi ol ati o n of t h at st at ut e; 1 1. R e q uir es, p urs u a nt t o D e bt or a n d Cr e dit or L a w § § 2 7 3, 2 7 3 -a, 2 7 4, 2 7 5, 2 7 6 a n d 2 7 9, t h at: a. T h e S a c kl er D ef e n d a nts r efr ai n fr o m dis p osi n g of a n y pr o p ert y; a n d b. T h e S a c kl er D ef e n d a nts t o r et ur n t h e ass ets tr a nsf err e d or e q ui v al e nt v al u e . c. All fr a u d ul e nt c o n v e y a n c es of a n y P ur d u e ass ets t o t h e S a c kl er D ef e n d a nts b e s et asi d e; a n d d. P ur d u e a n d t h e S a c kl er D ef e n d a nts j oi ntl y a n d s e v er all y p a y Pl ai ntiff its r e as o n a b l e att or n e ys ’ f e es r el ati n g t o a n y fr a u d ul e nt c o n v e y a n c es fr o m P ur d u e t o t h e S a c kl er D ef e n d a nts. 1 2. D e cl ar es t h at e a c h li c e ns e e a c h D ef e n d a nt o bt ai n e d t o m a n uf a ct ur e, distri b ut e, i m p ort a n d/ or e x p ort c o ntr oll e d s u bst a n c es wit hi n, i nt o, a n d/ or fr o m t h e St at e w as v oi d a b i niti o o n t h e gr o u n ds t h at e a c h s u c h li c e ns e w as pr o c ur e d u n d er f als e pr et e ns es t hr o u g h f als e a n d/ or misl e a di n g st at e m e nts a n d/ or o missi o ns c o nt ai n e d i n e a c h s u c h D ef e n d a nt’s A p pli c ati o ns t o E n g a g e i n a C o ntr oll e d S u bst a n c e A cti vit y; 1 3. A w ar ds Pl ai ntiff its c osts; a n d 1 4. Gr a nts s u c h ot h er r eli ef t h e C o urt m a y d e e m j ust. 250 257 of 258 INDEX NO. 400016/2018 FILED: SUFFOLK COUNTY CLERK 04/11/2019 11:19 AM NYSCEF DOC. NO. 19 RECEIVED NYSCEF: 04/11/2019 V ersi o n D at e d A pr. 1 0, 2 0 1 9 wit h C ert ai n R e d a cti o ns R e m o v e d P er P arti es' A gr e e m e nt 258 of 258