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17 <br />opioid - related medical conditions; (5) costs for providing welfare or protective services for children <br />whose parents suffer from opioid - related disability or incapacitation; and (6) costs directly <br />associated with law enforcement and public safety relating to the opioid epidemic. Local <br />governments may also be entitled to injunctive relief to prevent farther unlawful distribution of <br />these drugs. <br />This memorandum identifies causes of action through which cities and counties can hold <br />responsible the distributors and manufacturers of opioids who have fueled the opioid epidemic. <br />I. Wholesale Distributors and Manufacturers Are Required under Federal Law to <br />Monitor for and Report Suspicious Orders of Opioids. <br />A. The Role of Wholesale Distributors in the Opioid Distribution Chain. <br />Pharmaceutical distributors are supposed to play the role of "beat cops" in preventing the <br />flow of controlled substances to abusers. <br />Congress enacted the Controlled Substances Act ( "CSA ") in 1970 with the express purpose <br />of creating a "closed system" for the distribution of controlled substances designed to prevent the <br />diversion of legally produced controlled substances into illicit markets.2 Through the CSA, <br />Congress stripped the manufacturers of the ability to sell directly to retailers, intentionally creating a <br />link in the chain of distribution between Big Pharma and the pharmacies. This link is the wholesale <br />distributor. <br />There are only 800 registered wholesale distributors in the United States. Three Fortune 500 <br />companies own 85% of the market share: Cardinal Health, AmerisourceBergen and McKesson <br />Corporation. Each company generates over $100 billion in revenue annually. <br />Because the CSA creates a "closed system" in which opioid dispensers -- like pharmacies — <br />must obtain opioids from opioid distributors, these distributors are "uniquely situated" to spot red <br />flags in the opioid chain, as they note in their own industry guidelines. The distributors are the first <br />line of defense against the diversion of these drugs that can lead to abuse, addiction, and blight. <br />The closed chain of distribution under the CSA is designed to ensure that all controlled <br />substances are accounted for as they make their way from the manufacturer to the end user. As <br />would be expected, all who encounter controlled substances within the distribution chain are <br />required to keep meticulous retards. For example, pursuant to 21 C.F.R. § 1305.13(d) distributors <br />of controlled substances must forward a copy of every order filled to the DEA. <br />B. Wholesale Distributors Are Required to Monitor for and Report Suspicious <br />Orders of Opioids under Federal Law and the Law of Many States. <br />'See 21 U.S.C.A. §§ 801 -971 (2006); 21 U.S.C.A. §§ 1300 -1321 (2009); H.R. Rep. No. 91 -1444; 1970 U.S.C.C.A.N. <br />4566, 4572 (Sept. 10, 1970). <br />2 <br />