Thursday, July 14, 2016

Comp Should Sue Purdue

Over the past weekend the Los Angeles Times published a startling investigative story on Purdue Pharma, the maker of Oxycontin, and everything they knew about illegal distribution of the drug, their investigations, their suspicions ... and the company's complete lack of communication with anyone that could put a stop to the company's $31 billion revenue stream from the nation's best selling opioid.

How much did Purdue know?

And how much did they keep to themselves ... until pressured by law enforcement and the government?

According to the story, since 1999 more than 194,000 people have died from opioid overdoses, and more than 4,000 per day become addicted.

Four thousand a day...

Yet, even after three of Purdue's executives pleaded guilty to federal charges of misbranding Oxycontin and the company paid $635 million in fines and fees, the company turned a blind eye to clinics they knew were overprescribing, and even fronting criminal enterprises, all after touting increased security and controls over their drugs.

One year after the settlement, a Los Angeles pain clinic, Lake Medical, opened its doors on the license of Dr. Eleanor Santiago, a physician who had fallen on hard times and whom the operators of Lake Medical recruited to write prescriptions.

Santiago wrote 1,500 prescriptions for the pills in a single week - more than most pharmacies sell in an entire month; and according to the story, in October of 2008 she prescribed more than 11,000 pills.

Purdue investigated and concluded Lake Medical was part of a criminal enterprise working with a pharmacy in Huntington Park.

“Shouldn’t the DEA be contacted about this?” the sales manager, Michele Ringler, told company officials in a 2009 email, according to the story. She opined certainty it was an organized drug ring.

Still, Purdue didn't take any action against Lake Medical, and didn't tell anyone about what they knew until the clinic went out of business and its leaders indicted.

According to the LA Times, Purdue had collected exhaustive evidence suggesting criminal distribution of the drug, and not only did not share that information with law enforcement, but kept selling the drug to those being investigated.

"Purdue knew about many suspicious doctors and pharmacies from prescribing records, pharmacy orders, field reports from sales representatives and, in some instances, its own surveillance operations, according to court and law enforcement records, which include internal Purdue documents, and interviews with current and former employees," the Times says.

Since 2002 Purdue had been keeping a list of suspicious doctors, and the Times investigation revealed there were 1,800 names on that list.

Only 8% of them were reported to law enforcement.

Rather than risk its interfering with the obscene profits Oxycontin was delivering by releasing its information, Purdue instead came out with a tamper-resistant formulation. It was only after many arrests had been made that Purdue supplied its "suspicious" list to the DEA - by that time it was old news; many on the list had already been arrested.

The Times investigation and the resulting story are hugely incriminating. Big business making big money off of ... big business, when put into the context of the workers' compensation system.

The issues with opioids in workers' compensation are well known, the accounts well documented.

The harm to lives, families, business is huge.

The financial damage to workers' compensation payers is monumental, especially when tallying up the costs of unnecessary disability indemnity, drug rehab, lost production, medical bills, etc.

Suffice to say, the industry has probably supported, to its detriment, Purdue to the tune of billions of dollars, directly and indirectly.

Many states have sued and settled with Purdue, but those suits were based on the company's labeling misrepresentation.

Actively concealing damaging information for the sake of profits against the workers' compensation industry is another matter, however. (To be clear, there isn't evidence that workers' compensation was targeted, but certainly work comp was a huge victim.)

It seems to me, that the workers' compensation insurance industry (and self-insured employers along with them) have some leverage in the form of a class action lawsuit to recoup much of the damage Purdue caused by its fraudulent activity.

And it IS fraud! Knowingly concealing information that causes harm and damage to others is just as bad as misrepresentation.

Jack Crowley, who held the title of executive director of Controlled Substances Act compliance at Purdue and had spent decades at the DEA, told the Times, “Well, once we start to learn about it, we’ve got to report it. That’s for sure.”

Purdue didn't.

Pretty much a slam dunk to my jaundiced work comp "no fault" legal mind.

If any carrier wants a referral for a class action law firm, contact me...


  1. This comment has been removed by the author.

  2. Oxycontin / oxycodone has been effectively used for pain relief when used appropriately. Most physicians prescribe it appropriately and in reasonable amounts. Those who do not should lose their license but going after Purdue is similar to suing Facebook or Twitter for inappropriate posts by their users

  3. So after that we then could go after gun manufacturers and those who sell them? Hold them responsible for the inappropriate use of their products as well. Then who's next? Hold the automobile makers responsible for the inappropriate use of their products, that leads to deaths, suicides, and homicides as well? Just asking, where do we start and stop? Should we punish the many for the inappropriate actions of the few, in all our affairs? Just asking. Where do we draw the moral, legal, and ethical lines? Should we just look at the harm done by a product or industry? Or like with what the workers comp industry would have us all do, when it come's to the harm the industry does, only be looking for the good being done for the many, while not dwelling on the harm being done comparably to the few?

    Why is it when it comes to the harm done by opiates to the few, compared with the many it helps, do we dwell on the harm being done to the few, but in the workers comp industry itself, we are told to look at the good the industry is doing for the many, and not on the few it treats unjustly and harms?

    I guess I'm somewhat conflicted on when it's acceptable to harm a few, and when it's not. When so many are being helped, by a product or industry, do we really need to dwell on the few being harmed by it? Should we be treating all industry's and products the same, or do we grant some the ability to harm a few, for the good of the whole they do, while punishing other products and industries for doing the same thing? Just asking, why is it OK or acceptable for some industry's and products to harm a few, while helping the many, while others products and industry's get held to different standards?

    Shouldn't all harm, be unacceptable, no matter how much good a product or industry does for the whole? Just asking as always. Peace and thanks for another informative and mind awakening report.

  4. "And it IS fraud! Knowingly concealing information that causes harm and damage to others is just as bad as misrepresentation."

    So when workers comp insurance carriers knowingly, intently, and wrongfully deny, delay, and defended against injured workers, harmed on the job, creates even more harm to the injured workers, on top of their injuries. Ought that not also be a class action suit as well against the big insurers that intently train their personnel and agents to play the cost containment DDD game, knowing the harm it's bringing to lives, families, and business is huge as well, all for the bottom line?

    Why is it OK and acceptable for one industry to knowingly harm, while other industry's are supposedly held to a higher standards? When in reality both industry's are harming humans and lives, for profits.

    Where is the class action law suit, for those the insurance industry, is willfully and knowingly harming for profits, as well, with their DDD cost containment strategies? Instead of doing what the RRR (Repair, Retrain, or Retire) compensation resolutions the grand bargain calls for when one is harmed or injured on or by their jobs. It's seems to me there is room for more than just one class action law suit here.

  5. Thank you David for having the courage to write stories like this. I am very saddened today and will miss reading your blogs every morning as I drank my coffee.You were an advocate for injured workers and an advocate against fraud of any type.

  6. David DePaolo Said:

    "I go back and forth, obviously, about the relevance of workers' compensation in today's world. Sometimes I whine about systemic problems. Sometimes I praise what I believe to be a good value to society when all goes well."

    "Mostly though I believe that we don't need to "fix" workers' compensation. We just need to make what we have work properly by all of us doing our jobs to the best of our abilities; respecting the law, being accountable and punctual."

    1. David had great advice as you just pointed out, especially with being accountable.Thank you for the quote.

      He inspired me and countless other injured workers.I will truly miss him. I am so very thankful for what he has done to advocate for injured workers and for doing the right thing.

      I have no doubt that Workcompcentral will continue with his legacy and the positive things he did for the entire work comp community such as Comp Laude Awards.

  7. The Lake Medical story is a sad and infuriating situation that also affected the City of Everett, Washington and Snohomish County, where the majority of the Oxycontin was distributed illegally. What the story does not add is that the Crips Gang in LA was directly responsible for acquiring the Oxycontin and flying it and driving it North to Washington State! What kind of society turns a blind eye to this cancer called the gangs and the cartels that live and operate in our communities. Los Angeles, its law enforcement and its citizens are also responsible for this tragedy. This did not happen in a vacuum, this was not just big Pharma, a bad doctor and a pharmacist that diverted all of these drugs. More than anything this is a symptom of our society, the lack of care, focus and engagement in regard to righting the wrongs and being ever so tolerant of the evil that surrounds us.

  8. This whole article appears to be one non-sequiter:

    Unless you mean, of course simply Cal WC suing Purdue over driving up the price of one drug, Oxycontin so that it would naturally cause a California injured worker (WC Carriers) to indirectly pay more for that particular pain killer because of the criminal activity of drug rings and for it's collusive behavior Purdue.

    The following is quoted from your article:

    "The issues with opioids in workers' compensation are well known, the accounts well documented.
    The harm to lives, families, business is huge.
    The financial damage to workers' compensation payers is monumental, especially when tallying up the costs of unnecessary disability indemnity, drug rehab, lost production, medical bills, etc.

    Actively concealing damaging information for the sake of profits against the workers' compensation industry is another matter, however. (To be clear, there isn't evidence that workers' compensation was targeted, but certainly work comp was a huge victim.)

    It seems to me, that the workers' compensation insurance industry (and self-insured employers along with them) have some leverage in the form of a class action lawsuit to recoup much of the damage Purdue caused by its fraudulent activity."

    It may simply be that you are unaware that several scientific studies have been done that show conclusively that it is not the injured person, industrial or non-idustrially injured, that is causing the increased pain pill death explosion, nor is that worker the one that is abusing the drugs.

    The evidence is showing that it is the criminal element, typically not injured at all except in his crooked brain, that is illegally getting the RX and the drugs and selling them on the black market to people that like it better than heroin, or don't like the Russian Roulette you play with bathtub manufactured drugs, or simply ran into 'bad luck' when their pusher died or went to jail."

    These are the people that were and are getting the illegal pharmacy pills, and dying from them in droves. The injured worker is very rare who did not need his opioids in the first place, and did not meticulously take care of them, and did not take them exactly as prescribed, and did not ever sell or give a one of them to anybody, and did not die and will not die because he is relieved of a little pain that medical science could help him or her with, and, did not need them and have a right to them as set forth in H&S Code Section 124960, et seq., the pain patient's bill of rights.

    Please explain what you mean by the phrase: "The issues with opioids in workers' compensation are well known, the accounts well documented.
    The harm to lives, families, business is huge."Please list even three documented accounts of particular issues with opioids that are impacting the workers' compensation system other than, albeit, pain pills may, may I say, add something to the patient's overall disability. But would we rather they dry up and or die without the pain relief?

    John Bush Hemet

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  10. Really nice blog. keep it up!!!Steve Walker established Walker Law Group in order to provide innovative, efficient and responsive legal services to his clients.Workers Compensation Claims

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