DOJ Escalates the Fight Against Opioids, Preemptively Shuts Down Pharmacies
In early February, the U.S. Department of Justice took
the unprecedented step of temporarily shutting down two Tennessee
pharmacies accused of allowing opioid prescriptions to flow into the local market
unchecked, signaling an escalation in the DOJ’s enforcement surrounding the
The decision to
preemptively shut down the pharmacies presents a change in tactics for the DOJ,
which has historically sought administrative remedies to revoke a pharmacy’s
registration with the U.S. Drug Enforcement Administration. The administrative
remedy can take months, whereas here, DOJ attorneys sought, and were awarded,
an ex parte order temporarily shutting
the pharmacies down while the DOJ pursues a case under the Controlled
Substances Act. Moving forward, the DOJ is signaling that it may shut down
pharmacies that it deems to be a danger to the public, even before they have
the opportunity to present a defense in court.
This new approach is
broadly consistent with the DOJ’s strengthened commitment to attack the opioid
crisis on all fronts. In October of last year, the DOJ
announced it would allocate nearly $320 million to combat the opioid
crisis. In connection with this effort, the DOJ assigned more than 300 federal
prosecutors and 400 DEA task force officers with addressing opioid issues.
The DOJ has also created
a data analytics program to detect and allocate resources toward opioid “hot
spot” districts. Data
analytics were crucial in establishing the case against the two shuttered
pharmacies, as the DOJ was able to show that, of all the active pharmacies in
the United States, only three bought more opioid doses per capita than the
pharmacies at issue. Data
analytics were also used by the Massachusetts U.S. Attorney’s Office
to issue a recent warning to a number of medical professionals whose opioid
prescriptions raised red flags.
The DOJ’s enforcement efforts
have expanded in other directions as well. In August 2018, the DOJ
indicted two ringleaders of the Zheng drug trafficking organization,
based out of Shanghai, China. The two individuals were indicted for running an
organized crime ring that manufactured fentanyl in China and then imported and
distributed it in the United States. This followed the first-ever indictment,
months earlier, of Chinese nationals for fentanyl trafficking, when 32
defendants were charged in connection with the Zheng organization.
Federal prosecutors also indicted
several high level pharmaceutical executives, including the founder
of Insys Therapeutics, John Kapoor, on charges that Insys offered millions of
dollars in illegal kickbacks to doctors who prescribed their fentanyl-based
pain medication. Another high level Insys executive, Alec Burlakoff, has
already pleaded guilty to a racketeering conspiracy in connection
with the kickback scheme and is currently cooperating with the prosecution. Four
doctors have also been imprisoned for taking kickbacks, disguised as
speaker fees and other perks, from Insys in exchange for prescribing the pain
killers to patients without regard to the actual needs or health of the patients.
message the DOJ is sending with these indictments is that, when it comes to the
opioid crisis, the DOJ has a hardline approach. Pharmaceutical executives,
doctors, pharmacists, and others involved in the sale or manufacture of opioids
should take note.
Visit our website to learn more about V&E’s Government Investigations & White Collar Criminal Defense practice. For more information, please contact Vinson & Elkins lawyers Jennifer Freel or Casey Downing.