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CHARLESTON — Opioid distributor companies and a retired DEA official pointed the finger at each other during a trial in Charleston on Wednesday, stating their counterparts were unclear in communication, which fueled the opioid crisis across Appalachia.

Both Joe Rannazzisi, head of the Office of Diversion Control for the Drug Enforcement Administration from 2006-15, and the distributors argued that the other side disregarded requests to comply with regulations and policies, which could have guided them in stopping opioid pills being illegally diverted as they flowed into local communities.

Paul Schmidt, an attorney for McKesson, said the distributors had been working with a similar system of policies for 35 years, but when Rannazzisi came into his position he made a series of drastic changes. He said the defendants worked tirelessly to change its suspicious order monitoring policies and programs following meetings with the DEA, but efforts to satisfy Rannazzisi fell short because he was unclear in his statements.

Rannazzisi said it was the distributors who failed to follow DEA policies, which led to several immediate suspension orders and large monetary settlements with several distribution centers run by the defendants.

The testimony is being heard during a trial in which Cabell County and Huntington accuse the “Big Three” drug wholesalers — AmerisourceBergen, Cardinal Health and McKesson — of fueling the opioid crisis by sending excessive shipments of opioids into the area for eight years, before a reduction in the number of pills shipped made users turn to illicit drugs.

The defendants point to the DEA, doctors and West Virginians’ poor health as the culprits.

The changes made during Rannazzisi’s reign were memorialized in a series of letters sent by Rannazzisi starting in 2006, which were sent to the distributors. Rannazzisi said the purpose of the letters was to reiterate the distributors had a duty to conduct due diligence to avoid filling suspicious orders that might be diverted into the illicit market.

But the guidance did not stop there, he said, as the DEA held several meetings and seminars with the distributors to help them understand.

Perhaps the most crucial point the defendants tried to make with Rannazzisi’s testimony was pointing to decisions penned by senior DEA members and federal judges who made reference to the letters.

Schmidt attempted to use Rannazzisi’s own words against him when discussing a 2006 congressional hearing in which he testified that the vast majority of prescribers act lawfully with their prescribing habits. He said doctors should not hesitate in prescribing opioids for legitimate reasons.

Schmidt said distributors follow DEA quotas set yearly based on the amount of prescriptions made by doctors.

He referred to a Rannazzisi letter sent to distributors in 2006 that said the DEA recognized the overwhelming majority of distributors act lawfully.

A review of the DEA’s regulatory and enforcement efforts, released from the Office of the Inspector General in 2019, found the DEA registrant population increased on average by about 40,000 registrants yearly, but the DEA’s enforcement staffing did not grow at the same rate. From 2007-17, the registrant population increased by 30%, but the diversion investigator staffing increased by just 20%.

In 2016, West Virginia led the nation in opioid-related overdose deaths (43.4 deaths per 100,000 people), the majority attributed to oxy- and hydrocodone, as well as heroin, the report said. The DEA raised the number of registrants in the state during that time.

The Office of Inspector General opened an investigation into Rannazzisi after two House Republicans accused him of intimidation once he departed the DEA, but he has never received a letter of exoneration in that case, Schmidt said, later adding that Rannazzisi had received $860,000 since 2017 for his work in the opioid litigation with the plaintiffs.

Schmidt also referenced a memo penned by Chuck Rosenberg, acting administrator of the DEA, made in a case with Masters Pharmaceuticals in 2015, in which he mentioned Rannazzisi’s letters and showed concern for them, stating the letters were not binding to the agency.

Rannazzisi said that at the time the letters were issued, the administrators had no problem with them.

Schmidt said in another case, a federal judge in Michigan issued an opinion referencing Rannazzisi’s letters, stating the DEA sought to expand drug wholesalers’ obligations via its policy changes, but there were never changes to the law or regulation.

Regulation states an order is suspicious if it is one of unusual size or frequency or if it deviated from its normal path. Schmidt said there was no further language that explained how something could fit that criteria and Rannazzisi’s letters fell short of doing so. Schmidt said that before 2008, distributors had been shipping suspicious orders and reporting them to the DEA and the DEA never took action or tried to change it until Rannazzisi took office.

Schmidt said the DEA had accepted the excessive order reports for years prior to Rannazzisi taking his position. The drug diversion policy prior to Rannazzisi had explained that suppliers could determine whether orders were excessive by checking their own sales and establishing a limit threshold. Anything above that was to be considered suspicious.

It was updated in 2009 to say a suspicious order was an order that the registrant deemed to be suspicious and did not fill, but reported it to their local DEA. It added that excessive purchase reports were no longer acceptable.

Between Oct. 10 and Oct. 21, 2005, McKesson sent six pharmacies more than 1.5 million dosage units of hydrocodone, which Rannazzisi decried Tuesday. Rannazzisi was told by McKesson that its suspicious order monitoring system had not been picking up generic drugs in the hydrocodone class. Rannazzisi called it a systemic failure.

Schmidt said they had been reported through excessive order reports, but Rannazzisi said the excessive order reports the defendants sent to the DEA field officers monthly contained hundreds of lines of transaction reports and were confusing and vague. They were also sent a month after it occurred.

While Rannazzisi said he never knew what excessive order reports were supposed to say, Schmidt referred to one that said it was being sent because it reflected transactions that were over the threshold.

“This isn’t a suspicious order,” he said. “You need a summary of how it’s suspicious, not that it was just over the threshold. We need more details.”

Rannazzisi said the DEA investigates facts, not quantities.

Schmidt said it was never clear in the letters that the DEA wanted narratives or a description of what was suspicious. He said a 2007 letter said they must say an order is characterized as suspicious, but not why.

In 2011 and 2013, the defendants’ trade association reached out to the DEA seeking guidance and information to help build their relationship, but their efforts were ignored. Rannazzisi said the individual distributors have the right to seek guidance, but its advocacy group, the Healthcare Distributor Alliance, does not.

Follow reporter Courtney Hessler at and via Twitter @HesslerHD.

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