ROCHESTER, NY (WROC) — Two former executives for a Rochester pharmaceutical company are facing drug charges as the company has agreed to pay $20 million as part of a case brought by the federal government over its failure to report suspicious opioid drug orders from pharmacies.
Rochester Drug Co-Operative says it has reached agreements in both civil and criminal cases with the U.S. Attorney’s Office for the Southern District of New York.
Along with the $20 million fine over a five-year period, Rochester Drug Co-operative (RDC) admitted to the failures and agreed to three years of independent compliance monitoring.
In its release, the U.S. Attorney said charges had also been filed against two former executives: former CEO Laurence Doud III and William Pietruszewski, the company’s former chief compliance officer.
They face charges for unlawfully distributing oxycodone and fentanyl, and conspiring to defraud the DEA.
Between 2012 and March 2017, Doud and Pietruszewski supplied opioids to pharmacies that, the U.S. Attorney says, RDC had determined “were dispensing those drugs to individuals who had no legitimate medical need for them.”
Despite warning signs, federal investigators say Doud continued to increase its sales of oxycodone and fentanyl.
Authorities write, “From 2012 to 2016, RDC’s sales of oxycodone tablets grew from 4.7 million to 42.2 million – an increase of approximately 800 percent – and during the same period RDC’s fentanyl sales grew from approximately 63,000 dosages in 2012 to over 1.3 million in 2016 – an increase of approximately 2,000 percent. During that same time period, Doud’s compensation increased by over 125 percent, growing to over $1.5 million in 2016.”
On top of that, authorities say Doud and Pietruszewski took steps to conceal the crimes to the DEA and other law enforcement agencies — including not reporting the suspicious dealings.
“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,” said U.S. Attorney Geoffrey S. Berman said. “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.”
If Rochester Drug Co-Operative abides by the terms of the agreement, they say they will not face further prosecution from the U.S. Attorney.
In a statement, RDC spokesperson Jeff Eller said, “We made mistakes and RDC understands that these mistakes, directed by former management, have serious consequences.”
He added, “We accept responsibility for those mistakes. We can do better, we are doing better, and we will do better… Not only do we pledge to honor the letter and spirit of these agreements, we are also putting into place a world-class compliance program.”
Rochester Drug Co-operative will hold onto its DEA registration as part of the agreement. The Rochester-based company fills orders for pharmacies across the northeast.
On April 16, the company adds that CEO Joe Brennan resigned from his position. Chief Financial Officer John Kinney is acting as CEO at this time.