Chapter 52
Charleston, West Virginia, May 26, 2021
For months, attorney Mike Fuller had been working with James Rafalski, the veteran investigator who retired in 2017 after thirty-nine years in law enforcement, the last thirteen with the DEA. Rafalski was preparing to appear before Judge Faber as an expert witness—the opening act before Joe Rannazzisi—and air the frustrations of the DEA agents and investigators battling the epidemic on the ground. Rafalski wrote up extensive notes and memorized dates and shipping information on all three distributors. He had prepared a 122-page report analyzing the distributors’ pill shipments. To the trial team, he was an important building block in the case against the distributors.
It was a big moment for Rafalski. He saw the ravages of the opioid crisis first-hand and testified scores of times about his big drug cases. But he had never testified as an expert witness. He finally had the opportunity to confront the companies he had pursued for years—the chance to hold them accountable in the first trial of the massive MDL litigation.
Rafalski was a methodical investigator, the kind of guy who created a plan and then locked on to it. As his court date approached, he felt that he was ready. But the week before Rafalski was scheduled to testify, Paul Farrell announced that he was switching gears. He would handle the direct examination, not Fuller. Two days out, Paul told Rafalski that he was ditching Fuller’s strategy. Instead of burrowing into the details of Rafalski’s report, Paul wanted to stay at sixty thousand feet and talk about the investigator’s broad conclusions. Rafalski felt uneasy.
On May 26, he took the stand. Paul walked him through his long law enforcement career, first in a Michigan sheriff’s office, then as a police officer and head of a special investigation’s unit in Romulus, Michigan, and finally, at age forty-eight, to the DEA, where he worked on fifty major cases, including the Harvard, Masters, and Mallinckrodt investigations. Rafalski testified that he was asked by the plaintiffs to examine the records of the Big Three distributors in the West Virginia trial in the same way he would have as a DEA investigator.
The defense attorneys from all three drug distribution companies objected and asked the judge to bar him from testifying. They argued that Rafalski had relied on faulty methodology, and the findings in his report were opinion, not fact. Not included in his report was how doctors and manufacturers had contributed to the opioid epidemic. His conclusions were incomplete, based only on what the plaintiffs’ attorneys had asked him to examine, to the exclusion of mitigating evidence. This was not expert testimony but the flawed ruminations of a witness hostile to their industry.
“I thought I would go ahead and hear the testimony,” Faber told Paul. “If I agree with the defendants, then it all goes out the window. But I think I’ll hear it and give you a chance to put it in before I make that decision.”
Rafalski testified that he determined the distributors failed for more than a decade to prevent pills from reaching the black market. The companies did not design adequate systems to investigate and block suspicious orders—orders that he said could “fall into illicit hands.” Their negligence was a “systemic” and “widespread” failure. “I did not find any indication in the review of the material that I had that they were specifically monitoring distributions into the geographic area of Cabell County or the City of Huntington, West Virginia,” Rafalski testified.
Rafalski worked with Craig McCann, the owner of a securities litigation firm in Virginia who had analyzed the ARCOS data for the plaintiffs. Rafalski laid out six different methodologies that the companies developed to identify suspicious orders of oxycodone and hydrocodone from pharmacies. He explained that he applied those methodologies to the shipments to Huntington and Cabell. For example, Cardinal and AmerisourceBergen used a system that was triggered when an opioid order came in that was three times the twelve-month average of orders.
It was complicated, but Paul told Faber it was essential to walk through Rafalski’s analysis to understand how pain pills flooded West Virginia. Paul said that by using all six different algorithms in his analysis, Rafalski was trying to illustrate that “whatever metric they want to run shows that the transactions should have lit up like a Christmas tree.”
Paul tried another metaphor: No matter what suspicious order monitoring system was used, these huge orders were triggering “fire alarms.” But nobody at the companies was investigating or conducting “due diligence” with the pharmacies to see what was causing the fire.
“Let’s assume that no due diligence is done and that the alarm, for lack of a better word, the fire alarm, never gets turned off. What should happen with all of the subsequent orders until the fire alarm is turned off?” Paul asked Rafalski.
“They should not be shipped,” Rafalski said.
In the case of Huntington and Cabell, Rafalski testified that there was a wide range of the number of pain pills that should have been flagged and halted—20 to 99 percent of all orders—depending on which of the methodologies was employed.
Using one of the methodologies, Rafalski said that AmerisourceBergen should not have shipped 90.6 percent of its oxycodone pills from 2002 through 2018.
It was a remarkable number. Rafalski explained why: Once the first suspicious order of pain pills was red-flagged, the company should have stopped all subsequent orders until it figured out why that initial order was so unusual.
Rafalski testified that the companies should have reported those orders to the DEA. Instead, from 2007 through 2018, he noted that AmerisourceBergen logged 77,398 transactions with pharmacies in Huntington and Cabell—but only reported 45 of them as suspicious. Cardinal reported only one suspicious order from 1996 through 2011. McKesson reported none out of 18,862 transactions from 1996 through 2012. It reported five as suspicious in 2013.
When Farrell finished, Paul Schmidt, the attorney representing McKesson, stepped to the lectern to cross-examine Rafalski. He asked him about the role of doctors in the opioid epidemic.
“You recognize that doctors and other prescribers are responsible for determining medical need when they write prescriptions for opioids?” Schmidt asked.
“That’s one of the requirements for a physician,” Rafalski replied.
“The DEA does not expect distributors to second-guess the legitimate medical judgments of prescribers. True?” Schmidt asked.
“Well, I would agree with that, in general terms unless they were to know some information or observe something way outside of the normal,” Rafalski replied.
“There’s no determination—no requirement in the regulations that distributors have to affirmatively determine that prescribing decisions are legitimate, is there?” Schmidt asked.
“I’d agree with that,” Rafalski said.
Schmidt then asked Rafalski if he agreed with a DEA statement in 2006 that the overwhelming majority of American physicians who prescribe controlled substances do so for legitimate medical purposes.
“I agree with that,” Rafalski said.
With that admission in hand, Schmidt brought up Joe Rannazzisi. He asked Rafalski if he was aware that Joe had once testified that “99 percent of doctors prescribe opioids for legitimate medical purposes.”
Yes, Rafalski said.
“You agree that the medical community bears some responsibility for the opioid crisis, correct?” Schmidt asked.
“I believe that probably everybody bears some responsibility for the opioid crisis,” Rafalski replied. “I don’t think that anyone can sit here today that took a role in trying to combat it would ever say they did everything perfectly.”
“Does that include the DEA?”
“That includes the DEA,” Rafalski said.
“Does that include Joe Rannazzisi, former head of the Office of Diversion Control of the DEA?” Schmidt asked.
“I guess Mr. Rannazzisi would speak for himself,” Rafalski said.
“I’m asking your view, sir,” Schmidt said.
“I’ve already stated I think everybody, if they were able to look back and look at what they did, I don’t think there’s anybody in America that could say, ‘I did everything perfect,’” Rafalski said.
“Does that include Mr. Rannazzisi in your view?” Schmidt pressed him.
“If I make a statement like that, I guess I would hope that he could look back and feel the same way,” Rafalski said.
Schmidt circled back to his original question about doctors. “Do you agree that doctors bear some responsibility for the opioid crisis?” he asked.
“I believe they do,” Rafalski said.
Why hadn’t Rafalski included in his report the responsibility of others, such as doctors, pharmacies, other distributors, or manufacturers? Schmidt asked. Rafalski said his report did not go outside of the scope of what he was asked to do by the plaintiffs’ lawyers—examine the role of the three distributors.
Schmidt then showed Rafalski a document from a DEA program launched in 2017 that identified factors contributing to the opioid crisis in West Virginia. It included the “over-prescribing of opioids.” The DEA document did not mention distributors.
Schmidt zeroed in and asked Rafalski if he knew of any distributors that sent pain pills to Huntington and Cabell that had not been requested by a licensed health care provider and dispensed by a DEA-licensed pharmacy.
Rafalski said he didn’t.
“You’re aware that there are all kinds of circumstances when an order can be of unusual size, pattern, or frequency, but not be diverted?” Schmidt asked.
“That’s a correct statement,” Rafalski said.
“Do you know if you take the body of suspicious orders that have occurred over time how many of them are actually diverted?” Schmidt asked.
“I don’t know that, no, sir,” Rafalski replied.
“Do you know if it’s above or below 5 percent, 10 percent?” Schmidt asked.
“I don’t know,” Rafalski said.
“Can you point to any action DEA took on any suspicious order that McKesson, Cardinal, or ABDC made for Cabell County or Huntington?” Schmidt asked.
“I cannot,” Rafalski said.
Schmidt then began attacking the methodology in Rafalski’s expert report that had flagged tens of millions of suspicious orders that should have been stopped. “You have claimed that every one of those tens of millions of orders were likely to be diverted?” Schmidt asked.
“More likely than not, yes, sir,” Rafalski said.
“You didn’t actually review any of the orders flagged by your methodologies, correct?”
“I did not,” Rafalski said.
“In terms of these orders that you claim were likely diverted, you don’t know how many of those orders went to fill legitimate medical need, correct?” Schmidt asked.
“I do not.”
“You don’t know whether it’s 99 percent of the flagged orders that went to legitimate medical need, 1 percent, or some other number?”
“I do not know,” Rafalski said.
“And I believe you said in your direct examination at one point that 90 percent of the pills should not have been shipped. Do you remember saying something to that effect?”
“Yes,” Rafalski said.
“Now, if that view were followed, how many cancer patients would have been deprived of medication?”
“Well…”
“How many, sir, do you know?” Schmidt asked.
“I do not,” Rafalski said.
“Do you know how many patients recovering from surgery would be deprived of medication if your opinions were followed?”
“I do not,” Rafalski said.
“Do you know how many patients receiving end-of-life care would be deprived of medications if your opinions were followed?”
“I do not,” he said.
“Do you know how many doctor prescriptions for legitimate medical need would not be filled if your opinions were followed?”
“I do not,” he said.
“Do you know how many of these tens of millions of orders should have been reported to the DEA as suspicious?”
“No, I do not,” Rafalski said.
“DEA never used these methodologies that you present in your report, correct?” Schmidt asked.
“Not that I’m aware of, no,” Rafalski replied.
“And you never used them while you were at DEA, correct?”
“I did not,” Rafalski said.
“Instead, you created these methodologies for the first time for litigation, correct?” Schmidt asked.
“Yes, sir,” Rafalski said.
Finally, Schmidt pointed out to Rafalski that since 2007 and 2008, the three distributors had blocked pill orders that went above a certain number.
“How many have they blocked?” Schmidt asked.
“I don’t recall,” Rafalski said.
“Do you recognize it’s hundreds of thousands nationwide?” Schmidt asked.
“I didn’t look at nationwide,” Rafalski said.
“Do you know how many it is in West Virginia?”
“I do not,” Rafalski said.
“Do you know how many it is in Huntington-Cabell?”
“In the totality, I do not.”
At the end of his testimony, Rafalski left the courtroom. Schmidt and the other defense attorneys urged Faber to strike him as an expert witness.
“The claim he made is staggering on its face, that by running these magic numbers that are simple and that no one has ever done before and that ignore everything happening in the real world, you can automatically identify 90 percent of pills that should not be shipped,” Schmidt told the judge. “That’s a stunning claim on its face. And when we dig into it, we see why it’s stunning. No one has done it and it’s divorced from any indicia of methodology or reliability.”
“Yeah,” Faber replied. “To be frank with you, Mr. Farrell, I was shocked when he came up with the 90 percent number.”
Faber said he would admit Rafalski’s testimony for now. He would consider whether Rafalski met the standards of an expert and decide later if his opinions should be admitted as evidence.
The plaintiffs’ team had just watched a master class in how to destroy a witness. Several team members regretted that they hadn’t better prepared Rafalski for Schmidt’s searing cross-examination.
Rafalski left the courthouse and headed to the Embassy Suites. He was exhausted, so stressed that he had lost ten pounds during the three weeks he spent in Charleston preparing for his day in court. As he packed up his white 2013 Ford Explorer, he flashed back on all the cases he had made against the drug companies and how his long career may have come to a brutal end.
Mike Fuller and a few other attorneys from the trial team tried to make him feel better as he stood in the hotel lobby. “You were great,” Fuller told him.
Rafalski didn’t believe him. He knew his time on the stand had not gone well. He remembered glancing over at Faber several times during his testimony and seeing a pained look on his face. As he began the long drive home to Michigan, he knew that he had lost the judge.