{"id":25504,"date":"2023-05-24T17:45:13","date_gmt":"2023-05-24T17:45:13","guid":{"rendered":"https:\/\/one.sightlinemg.com\/federaltimes\/uncategorized\/2023\/05\/24\/dea-failure-to-punish-opioid-distributor-fuels-revolving-door-question\/"},"modified":"2026-08-08T05:07:04","modified_gmt":"2026-08-08T05:07:04","slug":"dea-failure-to-punish-opioid-distributor-fuels-revolving-door-question","status":"publish","type":"post","link":"https:\/\/one.sightlinemg.com\/federaltimes\/federal-oversight\/2023\/05\/24\/dea-failure-to-punish-opioid-distributor-fuels-revolving-door-question\/","title":{"rendered":"DEA failure to punish opioid distributor fuels revolving door question"},"content":{"rendered":"\n

The U.S. Drug Enforcement Administration allowed one of the nation\u2019s largest wholesale drug distributors to keep shipping highly addictive painkillers for nearly four years after a judge recommended it be stripped of its license for its \u201ccavalier disregard\u201d of thousands of suspicious orders fueling the opioid crisis.<\/p>\n\n\n\n

The DEA did not respond to repeated questions from The Associated Press about its handling of the case against Morris & Dickson Co. or the involvement of a high-profile consultant the company had hired to stave off punishment and who is now DEA Administrator Anne Milgram\u2019s top deputy.<\/p>\n\n\n\n

But the delay raised concerns about how the revolving door between government and industry may be impacting the DEA\u2019s mission to police drug companies blamed for tens of thousands of American overdose deaths.<\/p>\n\n\n\n

\u201cIf the DEA had issued its order in a timely manner, one could then credibly believe that its second-in-command was not involved despite an obvious conflict of interest,\u201d said Craig Holman, an ethics expert at the watchdog group Public Citizen in Washington. \u201cThe mere fact that its action has been delayed four years just raises red flags. It casts the entire process under grave suspicion.\u201d<\/p>\n\n\n\n

Last week, after the AP reached out to the DEA for comment, the agency broke its silence on the issue and abruptly notified Morris & Dickson that it has decided to revoke its registration to distribute controlled substances, according to two people familiar with the development who spoke on the condition of anonymity to discuss the exchange. However, no final order has yet been published. The company has described revocation as a \u201cvirtual death sentence\u201d and is almost certain to challenge the decision in federal court.<\/p>\n\n\n\n

\"\"
An automatic system drops pharmaceutical orders on a conveyor belt to be placed into boxes at Morris and Dickson Co., in Shreveport, Wednesday, July 13, 2016. The U.S. Drug Enforcement Administration has allowed one of the nation\u2019s largest wholesale drug distributors to keep shipping opioid painkillers for nearly four years after a judge recommended in 2018 it lose its license for its \u201ccavalier disregard\u201d of thousands of suspicious orders fueling the opioid crisis. (Henrietta Wildsmith\/The Shreveport Times via AP)<\/figcaption><\/figure>\n\n\n\n

Louis Milione, who was named DEA\u2019s principal deputy administrator in 2021, did not respond to requests for comment. He retired from the DEA in 2017 after a storied 21-year career that included two years leading the division that controls the sale of highly addictive narcotics. Like dozens of colleagues in the DEA\u2019s powerful-but-little-known Office of Diversion Control, he quickly went to work as a consultant for some of the same companies he had been tasked with regulating, including Morris & Dickson.<\/p>\n\n\n\n

High-volume orders<\/h2>\n\n\n\n

Milione was brought in by Morris & Dickson as part of a $3 million contract to save its registration to supply painkillers after the DEA accused the company in 2018 of failing to flag thousands of suspicious, high-volume orders.<\/p>\n\n\n\n

Testifying in 2019 before federal Administrative Law Judge Charles W. Dorman, Milione argued that Morris & Dickson \u201cspared no expense\u201d to overhaul its compliance systems, cancel suspicious orders and send daily emails to the DEA spelling out its actions.<\/p>\n\n\n\n

But those efforts were too little, too late, the judge wrote in a 159-page recommendation which has not been previously reported and was recently obtained by the AP. Anything less than the most severe punishment, he said, \u201cwould communicate to DEA registrants that despite their transgressions, no matter how egregious, they will get a mere slap on the wrist and a second chance so long as they acknowledge their sins and vow to sin no more.\u201d<\/p>\n\n\n\n

\u201cAcceptance of responsibility and evidence of remediation are not get-out-of-jail-free cards that erase the harm caused by years of cavalier disregard,\u201d Dorman wrote. \u201cAllowing the respondent to keep its registration would tell distributors that it is acceptable to take a relaxed approach to DEA regulations until they are caught, at which point they only need to throw millions of dollars at the problem to make the DEA go away.\u201d<\/p>\n\n\n\n

Morris & Dickson<\/h2>\n\n\n\n

Shreveport, Louisiana-based Morris & Dickson, the nation\u2019s fourth-largest wholesale drug distributor with $4 billion a year in revenue and nearly 600 employees, has said losing its license would effectively shut it down and have a \u201ccatastrophic\u201d effect on patients in 29 states.<\/p>\n\n\n\n

In a statement to AP, the company said it has invested millions of dollars in compliance systems, executives and advisors. \u201cIf DEA attempts to revoke our license for previous actions, the company will vigorously appeal and seek a stay in federal court,\u201d it said. \u201cWe are confident we will achieve an outcome that safeguards the supply chain for all of our healthcare partners and the communities they serve.\u201d<\/p>\n\n\n\n

Neither Milgram nor two DEA administrators who preceded her have taken any enforcement action since Dorman\u2019s 2019 recommendation, allowing Morris & Dickson to continue operating even as it pursued a potential settlement. Former DEA officials told AP a nearly four-year wait in such a case is highly unusual, noting it rarely takes the agency more than two years to issue a final order.<\/p>\n\n\n\n

Milgram\u2019s management of DEA has been called into question on another front. AP reported last month that a federal watchdog is investigating whether the agency improperly awarded<\/a> millions of dollars in no-bid contracts to hire Milgram\u2019s past associates.<\/p>\n\n\n\n

Federal ethics rules<\/h2>\n\n\n\n

As for Milione, federal ethics rules bar government employees from taking part in decisions that could benefit companies where they previously worked. But DEA did not comment about whether Milione has recused himself from matters involving Morris & Dickson. He would have also faced restrictions on his interactions with the DEA when he left government as a senior official \u2014 an issue the agency\u2019s own lawyers raised in an attempt to disqualify his testimony in support of Morris & Dickson.<\/p>\n\n\n\n

Milione, a lawyer and former bit Hollywood actor, impressed fellow DEA agents for his risk taking and toughness. Among his achievements was running the overseas sting that in 2008 nabbed Russia\u2019s notorious arms trafficker Viktor Bout, aka \u201cThe Merchant of Death.\u201d<\/p>\n\n\n\n

\"\"
In this image from video provided by C-SPAN, Louis Milione, the U.S. Drug Enforcement Administration\u2019s deputy administrator, speaks during a hearing held by the House Energy and Commerce Subcommittee on Health in Washington on Dec. 2, 2021. After temporarily leaving the DEA in 2017, like dozens of colleagues in the agency’s powerful-but-little-known Office of Diversion Control, he immediately went to work as a consultant for some of the same companies he had been tasked with regulating, including Morris & Dickson. He was named deputy administrator in 2021. (C-SPAN via AP)<\/figcaption><\/figure>\n\n\n\n

But after taking over as the head of Diversion Control in 2015, he ended his predecessor\u2019s refusal to meet with drug manufacturers and distributors and opened the DEA\u2019s doors to the industry it was charged with regulating.<\/p>\n\n\n\n

Among those Milione met with on at least two occasions was Paul Dickson Sr. \u2014 then-president of Morris & Dickson. That included a 2016 visit to the Louisiana headquarters with DEA investigators to discuss the company\u2019s compliance program.<\/p>\n\n\n\n

John Gray, the head of the Healthcare Distributors Alliance, a lobbying group that includes Morris & Dickson, recounted in a 2015 email how Milione, under orders from then-incoming DEA Administrator Chuck Rosenberg, wanted to \u201creset\u201d relations with the drug industry. And Milione even delivered the keynote speech at the group\u2019s annual meeting.<\/p>\n\n\n\n

\u201cOverall, he was engaging, exceedingly pleasant and seemed genuinely concerned that we had lost touch with each other,\u201d Gray wrote. \u201cIt is a very different tone and approach than we have all seen in the past 8-10 years.\u201d<\/p>\n\n\n\n

Controlled Substances Act<\/h1>\n\n\n\n

Morris & Dickson had been punished for its mishandling of addictive drugs before. In 2019, before Dorman issued his recommendation, the company agreed to pay $22 million in civil penalties<\/a> to resolve federal prosecutors\u2019 claims that it violated the Controlled Substances Act by failing to report suspicious orders of hydrocodone and oxycodone. The company also agreed to multimillion-dollar upgrades of its compliance program to ensure it reports suspicious orders moving forward.<\/p>\n\n\n\n

The case drew far less attention than the enforcement actions DEA took in recent years against Morris & Dickson\u2019s larger competitors, a trio of pharmaceutical distributors who have agreed to pay the federal government more than $1 billion in fines and penalties for similar violations. Cardinal Health, AmerisourceBergen and McKesson also agreed to pay $21 billion over 18 years to resolve claims as part of a nationwide settlement.<\/a><\/p>\n\n\n\n

Among the more than 12,000 suspicious orders that Dorman said Morris & Dickson should have reported to the DEA were 51 unusually large orders of opioids made by Wilkinson Family Pharmacy in suburban New Orleans.<\/p>\n\n\n\n

Wilkinson purchased more than 4.5 million pills of oxycodone and hydrocodone from Morris & Dickson between 2014 and 2017, and federal prosecutors say during that time owner Keith Wilkinson laundered more than $345,000 from illegal sales made with forged prescriptions or written by \u201cpill mill\u201d doctors.<\/p>\n\n\n\n

In one month, as many as 42% of all prescriptions filled by Wilkinson were for painkillers and 38% of those were paid for in cash. The DEA considers a pharmacy\u2019s sales of controlled substances suspicious whenever they surpass 15% or cash transactions exceed 9%.<\/p>\n\n\n\n

Yet Morris & Dickson never suspended any shipments to the pharmacy. Over three years, it filed just three suspicious order reports to the DEA \u2013 none of which resulted in shipments being suspended.<\/p>\n\n\n\n

\u201cAnybody with half a brain could\u2019ve seen something wasn\u2019t right,\u201d said Dan Schneider, a retired pharmacist near New Orleans whose fight to hold drug companies accountable for the opioid epidemic was featured in a Netflix documentary series. \u201cThey were way out of line.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"

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