Chapter 53
Charleston, West Virginia, June 8, 2021
Joe Rannazzisi couldn’t wait to take the witness stand. Ever since the day he was declared persona non grata by the DEA in 2015, he wanted to testify in a courtroom and tell the story of the opioid epidemic. How he tried to rein in renegade companies. Stop their mind-boggling pill shipments. How the industry ignored his warnings and accepted the flurry of Justice Department fines as a cost of doing business. The companies’ political prowess in Washington and how they were able to neutralize the most potent weapon the DEA had in its arsenal against the industry. Their indifference to the heartbreaking suffering on America’s streets.
After a six-hour drive from his home near Washington, Joe stepped out of his Ford Excursion in the parking lot of the Embassy Suites, checked into his room, and walked down the block to the Charleston Town Center, a down-on-its-luck mall where the plaintiffs’ trial team had set up its war room in an abandoned PacSun clothing store. It was Sunday, June 6, two days before he was scheduled to testify. Joe sat down with Linda Singer, the Motley Rice trial attorney who was assigned to prepare him for his testimony. As the two huddled in a corner, Paul Farrell pulled up a chair beside the veteran DEA agent whose work had inspired him to take on the opioid industry. He and Joe had met briefly during Joe’s deposition by Mark Lanier at the Washington offices of Williams & Connolly two years earlier, but they never had a chance to talk.
Singer, with dark curly hair and a quick temper, was in no mood for Paul’s interventions. “Don’t hijack this,” she snapped. “We’re working on his direct.”
“I’m just sitting down to listen,” Paul said.
Everyone was on edge, keenly aware of Joe’s importance to the case, particularly after the drubbing James Rafalski had taken ten days earlier. Joe needed to turn in a star performance.
“Are you ready?” Paul asked him.
Joe stared back. “I’ve been ready,” he said.
The night before his testimony, Joe spent the evening holed up in his hotel room. He read and reread several sections of the Code of Federal Regulations and the Controlled Substances Act. The arcane passages, he knew, were the keys to the case. He wanted to be able to recite each section and subsection by heart. He knew that the defense lawyers would argue that the regulations do not specifically say their clients had to stop shipping suspicious orders of narcotics. He turned to CFR Section 1301 and then 1306. He reviewed CSA Section 823. Read together, the sections required the companies to maintain “effective controls” over their drugs and set up suspicious order monitoring programs. If the companies shipped suspicious orders, they were in violation of the “effective controls” provision of the statute.
Joe ironed his white shirt and laid out the clothes he planned to wear the next day, a dark gray suit and a gold-colored tie. At nine that night, he turned out the lights. The next morning, June 8, he was up at 4:45. He wasn’t anxious. He wasn’t nervous. He thought his time on the stand might be contentious, but for him, it would be easy. It’s only hard when you’re not telling the truth, he told himself. Everything is documented.
Just before three that afternoon, Joe stepped into Judge Faber’s austere wood-paneled courtroom, its jury box occupied by members of the U.S. Marshals Service. He had testified in criminal cases as an agent and on Capitol Hill as a senior DEA official—so many times he had lost count. But this was different. He was going up against some of the best defense lawyers in the business. By now, their strategy couldn’t be clearer: Everyone was to blame for the epidemic except the drug distributors. Drug company marketeers pushed pain pills on the public and the medical community. Doctors overprescribed. The DEA failed to reduce the quota for the volume of opioids that could be manufactured each year. The drug distributors, their lawyers argued, were simply logistics companies, delivering products ordered by DEA-licensed pharmacies to fill prescriptions written by DEA-registered doctors. Who were they to question the judgment of America’s medical community?
Singer began her examination of Joe by pulling several pages from Lanier’s folksy playbook, using a road map to help explain his journey through the DEA and his experiences with the companies. As she established his credentials as a lawyer, a pharmacist, a DEA diversion investigator, an agent, and then a supervisor, Faber seemed engaged. The plaintiffs’ attorneys were relieved. The judge tended to drift off during these afternoon sessions. But not on this afternoon. He scribbled notes as Joe spoke and paid close attention to the veteran DEA man.
Singer asked Joe to explain the closed system of drug distribution. “What happens if drugs escape from the closed system?”
“You get diversion,” Joe said.
“And what happens when drugs are diverted?”
“People become addicted, people overdose, and people die,” Joe said.
Singer then asked why it was important that the companies police themselves. “Now, help us understand,” she said. “At DEA, you have warrants, better than subpoenas. You have guns. Why do you need participants in the closed system to do that job?”
“Our resources are limited,” Joe said. “The Controlled Substances Act was set up so a supply chain could police itself all the way down to the doctor and pharmacy level.”
Joe was barely ten minutes into his testimony when Paul Schmidt, the lawyer representing McKesson, raised the first of scores of objections that he and the other defense lawyers would lodge that afternoon and over the next two days.
“Your Honor, I don’t think he’s an expert on why the Controlled Substances Act was set up,” Schmidt said. “I’ll move to strike that testimony and ask that he be limited to his understanding and his role.”
Faber overruled Schmidt. He appeared eager to hear Joe’s story.
When the trial resumed the next morning, Singer asked Joe to tell Faber about his meeting at DEA headquarters with the McKesson executives fifteen years earlier. She wanted to establish that the companies had been repeatedly warned about their shipments but took few steps to stop the flood of pills. She also wanted to establish that the companies had settled DEA enforcement cases by paying fines and promising to monitor suspicious orders of opioids from their customers. Joe recounted how he had asked McKesson executives during the January 3, 2006, meeting to explain why the company had shipped another two million pills to six online pharmacies in Tampa after being warned that pills were being siphoned off to the black market. In one eleven-day period, the company had shipped 520,000 doses to one of those pharmacies.
Instead of offering an explanation, Joe recalled that one of the executives said, “Well, I guess you got us.”
“What happened after that?” Singer asked.
“I was floored by that statement. You know, they said, ‘We can’t tell you why. We don’t know.’ And it upset me. It really upset me.”
“And why did it upset you?”
“In eleven days, a pharmacy got 520,000 hydrocodone tablets? Doing the math, you know, that’s just a crazy number,” Joe said. “It would be over 500 hydrocodone prescriptions a day. That’s insane. There’s no legitimate reason to have that much.”
Singer then tried to advance one of the plaintiffs’ key arguments—that drug users eventually migrated to heroin because pain pills were becoming harder to find on the street. The DEA’s crackdown and the wall-to-wall press coverage of opioids had eventually spooked doctors around the country, and they started to limit the number of prescriptions they penned. Heroin abuse had ravaged Huntington and Cabell. If Singer could use Joe to document the “Gateway Theory,” it might help the plaintiffs secure more money from the defendants to abate the costs of the follow-on epidemic of heroin if they won the case.
“Mr. Rannazzisi, during your tenure at DEA, both before and during your service as deputy assistant administrator, did you have a chance to form any observations with respect to use of opioids and its relationship to heroin?” she asked.
The defense immediately objected. “Your Honor, this is pure expert testimony,” Schmidt said. “They have experts to cover this. Mr. Rannazzisi is not an expert on this. I don’t believe this was ever covered at his trial deposition. So it’s outside the scope as well as improper expert testimony.”
Robert Nicholas, the lawyer for AmerisourceBergen, jumped in. “Outside the scope,” he barked.
“I’ll sustain the objection,” Faber ruled.
Singer pivoted and tried to blunt one of the major defenses raised by the companies, that the production quota of opioids, which is set by the DEA, skyrocketed during Joe’s tenure. He could have done something to reduce the volume of opioids reaching the black market. Instead, the defense lawyers said, he did nothing.
“Now, did [the] quota for oxycodone and hydrocodone increase significantly during your tenure?” Singer asked.
“Absolutely,” Joe said.
“And why was that?”
Quota levels, he said, are based on the number of prescriptions written and filled, the volume of opioids dispensed at hospitals and hospice centers, and the amounts requested by the scientific and research communities. “As that number kept going up, we would have to adjust the quota every year to ensure that there was enough quota for patients,” Joe said. “So, the way it worked was, if more prescriptions were going out of pharmacies, if more patients in hospitals were getting more drug, that quota was going to increase because we have to meet the needs of the patient population.”
“So, Mr. Rannazzisi, as the opioid epidemic and opioid diversion grew, why didn’t DEA lower quota?”
“You can’t just lower quota. It doesn’t work that way,” Joe said. “And I know people have said this over and over again. Quota, it’s a scientific and mathematical exercise to ensure that there’s enough drug in the system. I always think of it this way: If you have a hundred people and all of those people are trying to get oxycodone and some of them are drug seekers who shouldn’t have it and some of them are legitimate patients that need it, maybe they’re [in] palliative care, maybe they’re [in] chronic pain, but they need that drug. The quota is established so they will get their drug. But if I come in and say, ‘You know what, I’m just going to cut it by 20 percent,’ then that’s 20 percent less. But the patient population and those drug seekers are competing for 20 percent less. And that’s how shortages occur.”
What would have kept opioids off the black market? Singer asked.
“Compliance with the Controlled Substances Act at every level of the distribution chain,” Joe said. “That’s what stops drug-seeking behavior, because if they can’t get the drug, if they can’t go into the pharmacy to get the drug, they’re shut off.”
Singer wanted to make one more point before Faber—that Joe tried to persuade the opioid industry to change its behavior. Rather than comply with the law, the industry fought back with every weapon it had.
“Did you ever say publicly that you were at war with industry?” she asked.
“Yes, I did.”
“And what did you mean?”
Joe began to recount his battle with Cardinal over the massive amounts of pills it was shipping from its warehouse in Lakeland, Florida. “I was called over to the [Justice] Department and they were just trying to circumvent me and what we were trying to do,” Joe said.
“I’ll object to the witness purporting to say what the company was intending to do,” said Jennifer G. Wicht, a lawyer representing Cardinal.
“Yeah, same objection,” Schmidt said. “I think the witness obviously has strong views, but they don’t form facts.”
Singer tried a different tack. “Mr. Rannazzisi, I know the judge directed us to stick to the facts. So, what did you observe?”
“I observed that they were not complying and they continued to not comply,” Joe said. “And, so, we just continued to do what we were doing, which was enforcing the law.”
“Objection to the legal conclusion, Your Honor,” Wicht said.
“I’ll overrule the objection,” Faber said.
“And, so, Mr. Rannazzisi, when you said you were at war with industry, who started the war from your perspective?” Singer asked.
“Objection, Your Honor,” Wicht said.
“Objection. Your Honor, the witness—” Schmidt began to say.
“Yeah, this line has gone far enough, Ms. Singer,” Faber said. “You made your point and I’ll sustain that objection.”
As Singer ended her direct examination and made her way back to the plaintiffs’ table, Schmidt strode to the lectern. There seemed to be no doubt that he had been waiting for this day, just like Joe.
Schmidt started off by attacking Joe and arguing that the DEA didn’t follow up on the suspicious order reports the drug distributors did file. That Joe could have cut the production quota for opioids. That he testified before Congress that 99 percent of the drug companies were obeying the law, and nearly all prescriptions had been written for legitimate medical needs.
The exchanges between the two soon turned rancorous. This confrontation had been in the making for years. The two Type-A warriors were ready to fight it out.
Schmidt asked Joe to recall the meeting he had with the McKesson executives in his office fifteen years earlier. He said there was no evidence that anyone ever said “you got us” during the meeting. If he was so concerned that a pharmacy had ordered 520,000 doses of hydrocodone within eleven days, why didn’t he shut it down?
“Sir, did you cut them off immediately after that?” Schmidt asked.
“I couldn’t because of due process,” Joe said. “Obviously, you know about due process. Due process means that I have to do my investigation in line to ensure that it’s done appropriately, and I have enough evidence to shut them down.”
Schmidt turned to Faber. “Your Honor, I think the witness is pretty clearly arguing with me,” he said. “I’d ask him just to answer the questions.”
“He can explain his answer,” Faber said. “Go ahead and ask him the next question.”
“My reaction was just to, you know, the due process,” Schmidt said. “I recognize I’m dealing with a lawyer as a witness, but I’m trying to keep it polite.”
He really wasn’t. The following day, Joe’s third on the stand, the warring continued. Schmidt began strafing Joe with a barrage of questions, barely allowing him time to respond but making sure he was scoring points with the judge. Even the plaintiffs’ lawyers had to admire his command of the complicated material, the precision of his questions, the strategy he had devised for his cross-examination.
Schmidt must have known that Joe had a temper when he was at the DEA; he kept prodding him, trying to get Joe to blow up, like he did on the call with the congressional staffers. But Joe was wise to the tactic. He provided short, narrowly tailored answers to Schmidt’s questions while occasionally smiling at his inquisitor. Schmidt asked if any of the warehouses the DEA had shut down served Huntington or Cabell. They did not, Joe said. He asked Joe if he was aware of any drug distributors that had violated the law in Huntington or Cabell. Joe said he was not.
“Are you aware of any distributor in this case that distributed opioids in Huntington or Cabell that were not approved by the FDA?” Schmidt asked.
“I’m not aware of any.”
“Are you aware of an instance where the DEA ever told a distributor in this case not to do business with the DEA-registered manufacturer?”
“I don’t have any information on that.”
“Distributors aren’t authorized to write prescriptions, correct?”
“That’s correct,” Joe said.
“They don’t evaluate a patient’s legitimate medical need for opioids in terms of deciding whether the opioids are appropriate for that patient, correct?”
“That’s correct.”
“They can’t second-guess legitimate medical decisions by prescribers, correct?”
“I don’t understand when they would be questioning a legitimate medical prescription.”
“And they don’t have access to individual patient medical records because of privacy laws, correct?”
“They wouldn’t have access to that.”
Schmidt then tried the strategy he had used so effectively with Rafalski. He wanted Joe to admit fault, that the DEA was to blame for the opioid epidemic, not the drug companies.
“You’ve taken issue with manufacturers in your work, correct?” Schmidt asked.
“Yes.”
“You’ve taken issue with chain pharmacies in your work, correct?”
“Yes.”
“You blamed independent pharmacies, correct?”
“Yes.”
“In terms of you, you had ultimate authority of the Office of Diversion Control for ten years during the opioid crisis, correct?”
“Yes.”
“There was an opioid crisis the entire time that you were the head of DEA’s Office of Diversion Control, correct?”
“That’s correct, yes.”
“It worsened during your tenure, correct?”
“It did increase, yes.”
“Including here in West Virginia, correct?”
“Yes,” Joe said.
“Across the country?”
“Yes.”
“You were the senior most law enforcement official at DEA responsible for pharmaceutical diversion, correct?”
“That’s correct, yes.”
“And despite the issue you’ve taken with others, am I right that you take no responsibility for the opioid crisis?”
“I don’t take any responsibility for the opioid crisis, no,” Joe said.
“Zero percent?”
“Yes, zero percent.”
“In fact, I’ve had the chance to ask you questions about your fulfillment of these responsibilities, and you’ve told me when it comes to registration, with the powers available to you, you believe you were perfect?”
“We did registration in line with what the law allowed us to do, yes.”
“Registration of doctors and pharmacies, given the powers you had, did you execute those powers perfectly?”
“We executed them according to the law,” Joe said. “So, if we’re dealing with the law, yes, we did it as far as the law would allow us to do.”
“Given the powers you had to investigate doctors and pharmacies, you exercised those perfectly. True?”
“Yes, within the resources we had and within the law, we did, yes.”
“Given the powers you had regarding quotas, you believe you executed those powers perfectly, correct?”
“Again, we were required to follow the statutes and the laws related to quota and we did so appropriately, yes.”
“You believe you did so perfectly, given the powers you had regarding quotas?”
“We did the best we could do within the confines of the law, yes.”
“You wouldn’t do anything differently in terms of how you approached the opioid crisis while you were at the DEA, correct?” Schmidt asked.
Joe sensed that Schmidt had just committed a cardinal sin in the legal profession. He had asked a question without knowing the answer. Joe had been considering that question—and his answer—for a long time.
“Would you do things differently?” Schmidt asked. “Just ‘yes’ or ‘no.’”
“It’s not a ‘yes’ or ‘no’ question,” Joe said.
At that moment, Joe saw Schmidt’s eyes widen. Perhaps the seasoned litigator realized that he may have asked one question too many. Joe was about to answer when Schmidt suddenly withdrew his question. “I’ll move on,” Schmidt said.
After Joe returned to his room at the Embassy Suites that night, he thought about what he would have said had Schmidt let him answer: Executives in handcuffs. Billions in fines. Tens of thousands of lives saved.
He wondered what Faber would have thought. Maybe his words would have resonated with the judge. Maybe the judge would have come to see the drug companies the same way Joe saw them.
They were working together, Joe would have told Faber. They had the knowledge. They had the intent. And once you have knowledge and intent, you’re no longer a corporation. You’re a cartel.