Agenda - 01-23-2018 4-b - Presentation on Opioids and Legal Issues

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federal CSA monitoring and reporting requirements and providing guidance on what may constitute a "suspicious order." These letters identified diversion and abuse of controlled prescription drugs as a "serious and growing health problem," commanded that "distributors must be vigilant" in determining who can be trusted to receive controlled substances, reminded distributors of their obligation to identify and report suspicious orders, and provided guidance on what circumstances may be indicative of diversion. The wholesale distributors have readily admitted their monitoring and reporting obligations. The major pharmaceutical distributors (the potential defendants here) are members of the Healthcare Distribution Alliance ( "HDA ") (known until mid -2016 as the Healthcare Distribution Management Association, or "HDMA "), a trade association that represents pharmaceutical distributors throughout the Americas. Such members include, for example, McKesson, AmerisourceBergen and Cardinal Health, the heads of which also sit on the HDA executive committee and board. This membership is significant because, in response to DEA requirements that distributors investigate and report any suspicious controlled substance orders, HDA created "Industry Compliance Guidelines" for pharmaceutical distributors. These Guidelines, which were developed with the "strong endorsement and expertise of [HDA] members" not only function as admissions of the member distributors' duties, but also serve to set out the industry standards to which these distributors may be held. The distributors created these Guidelines "in recognition of a growing problem of misuse and diversion of controlled substances," so that the distributors could "further scrutinize purchase orders for these products," as they were required to do by law. As noted above, the North Carolina County Opioid Litigation - Privileged and Confidential 5