The recent crackdowns by state attorneys general and the U.S. Department of Justice on higher-level participants in the manufacture and distribution of opioid-based medications have increasingly affected how health care clients operate in that space. Specifically, as set out in recent indictments, it is no longer enough for manufacturers and distributors to have compliance and procedure controls in place, rather, entities and their individual executives and compliance officers are now being held personally liable for failure to enforce or otherwise implement those policies.
Health care and white-collar criminal attorneys must broaden their scope of work and become increasingly more involved in everyday operations, including supervising and overseeing compliance controls so that companies and their executives comply with their own policies as well as all relevant statutes and regulations. Attorneys who handle representation of such individual executives, compliance officers and related entities, are now tasked with providing legal advice that conforms to the increased vigilance and enforcement actions by the respective government agencies. As a particularly instructive example, we have recently been directing our clients to the unsealed criminal charges filed against individual executives of Rochester Drug Co-Operative, Inc. (RDC) and the company itself. See, United States of America v. Doud, 19-CR-285, USDC, SDNY, United States of America v. Pietruszewski,19-CR-282, USDC, SDNY and United States of America v. Rochester Drug Co-Operative, 19-CV-3568, USDC, SDNY. Laurence Doud, Rochester’s chief executive officer, is charged with “knowingly and intentionally” violating federal narcotics laws “by distributing dangerous, highly addictive opioids to pharmacy customers that it knew were being sold and used illicitly.” William Pietruszewski and RDC were charged separately with the same conduct. RDC has entered into a deferred prosecution agreement with the United States and Pietruszewski has already pleaded guilty. According to the U.S. Attorney for the Southern District of New York, Geoffrey Berman: “This prosecution is the first of its kind: executives of a pharmaceutical distributor and the distributor itself have been charged with drug trafficking.”
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