Executives for prescription drug distributer Rochester Drug Cooperative (RDC). Former CEO Laurence Doud III, turned himself in yesterday on charges of criminal conspiracy. If convicted, he faces a mandatory sentence of a minimum of 10 years in prison.
While Doud’s lawyers vow to fight the charges, another former RDC executive, Chief Compliance Officer, William Pietruszewski reached an agreement with prosecutors in exchange for his cooperation.
U.S. Attorney Geoffrey S. Berman said in a statement,“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 fueling the opioid epidemic that is ravaging this country. 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 charges allege that Doud and other RDC executives deliberately ignored federal laws “by distributing dangerous, highly addictive opioids to pharmacy customers that it knew were being sold and used illicitly.”
RDC was also charged for failing to report suspicious orders of oxycodone, fentanyl and other controlled substances to the Drug Enforcement Agency (DEA). The company’s sales of oxyodone increased more than
RDC has been under investigation for several years by the DEA for suspicious activity and failure to report alleged theft of opioids. The company has previously paid to resolve those issues. From 2012 to 2016, RDC filled in excess of 1.5 million orders for controlled substances, but reported only four as suspicious to the DEA. However, there were at least 2,000 suspicious orders during that time, according to prosecutors.
“Today’s charges should send shock waves throughout the pharmaceutical industry reminding them of their role as gatekeepers of prescription medication,” DEA Special Agent in Charge Ray Donovan said in a statement. “DEA investigates DEA Registrants who divert controlled pharmaceutical medication into the wrong hands for the wrong reason. This historic investigation unveiled a criminal element of denial in RDC’s compliance practices, and holds them accountable for their egregious non-compliance according to the law.”
The Rochester, New York-based company will pay $20 million in fines for a civil complaint and consent to three years of monitoring for compliance with federal distribution laws.
“We made mistakes,” company spokesman Jeff Eller said in a statement. “RDC understands that these mistakes, directed by former management, have serious consequences. We accept responsibility for those mistakes. We can do better, we are doing better, and we will do better.”
RDC is one of the nation’s largest distributors of pharmaceutical products, with over 1,300 pharmacy customers and earns more than $1 billion each year. The company claims most of its customers are small, independent pharmacies.