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Former pharma wholesaler execs face criminal charges over opioid crisis

Published on 24/04/19 at 10:28am
Image Credit: SHAWN DOWD/@sdowdphoto/

Laurence Doud III, the former CEO of New York-based Rochester Drug Co-operative (RDC) – one of the largest drug distributors in the United States – has been charged with conspiring to distribute illegal narcotics and conspiring to defraud the United States.

The charges against CEO Doud, chief compliance officer William Pietruszewski and the company itself, stand out as the first criminal charges to be filed against a pharma firm in relation to the opioid crisis.  

“This prosecution is the first of its kind: executives of a pharmaceutical distributor and the distributor itself have been charged with drug trafficking, trafficking the same drugs that are fuelling the opioid epidemic that is ravaging this country,” Manhattan US Attorney Geoffrey Berman said.

“Our Office will do everything in its power to combat this epidemic, from street-level dealers to the executives who illegally distribute drugs from their boardrooms.”

The felony charges come as company executives are alleged to have instructed their subordinates to ignore red flags, as the firm fulfilled thousands of potentially suspicious ‘orders of interest’ for drugs including fentanyl and oxycodone, while their sales and pay packets soared.  

Prosecutors say the company’s oversight had allowed RDC to boost sales of oxycodone tablets by more than 800%, and sales of fentanyl by 2000%, as Doud’s pay doubled to a total of more than $1.5 million a year.

According to a company newsletter, as CEO, Doud “introduced hard-hitting programs designed to take business from competitors.” This saw sales of oxycodone increase nine-fold from 4.7 million in 2012 to 42.2 million in 2016. Meanwhile sales of fentanyl jumped from 63,000 doses in 2012 to 1.3 million in 2016.

According Berman “RDC was, in Doud’s own words, the knight in shining Armor for pharmacies that had been cut off by other distributors.”

“This epidemic has been driven by greed. As alleged, Doud cared more about profits than the laws intended to protect human life,” Berman said.

Having previously worked at two of the company’s major competitors, Doud joined RDC as a sales manager in 1987, before taking on the role of CEO in 1991.

Before announcing his retirement in 2017, the Florida resident had acted as RDC’s CEO for more than 25 years. After retirement Doud sat on RDC’s board as a consultant and board member. He was however fired from his position in 2018.

Doud, who pleaded not guilty, was released on a $500,000 bail. Doud’s lawyer, Robert C. Gottlieb, argued his client was “being framed by others to cover up their wrongdoing.”

“The government has it all wrong. He will fight these charges to his last breath and he will be vindicated,” Gottlieb said. Nevertheless, if found guilty, Doud, aged 75, faces a mandatory minimum sentence of at least 10 years.  

Louis Goss

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