Pharmaceutical Distributors Feeling the Pain of U.S. Opioid Epidemic

A crowd hovered over the man lying on the grass as his skin turned purple. Chera Kowalski crouched next to his limp body, a small syringe in her gloved hand. 

Squeeze.
The antidote filled the man’s nostril.

The purple faded.
Then it came back.

Kowalski’s heart raced. “We only gave him one, and he needs another!” she called to a security guard in McPherson Square Park, a tranquil patch of green in one of this city’s roughest neighborhoods.

“He’s dying,” said a bystander, piling on as tension mounted around lunchtime one recent weekday.

“Where is the ambulance?” a woman begged.

Squeeze.

Kowalski dropped the second syringe and put her palm on the man’s sternum.

Knead. Knead. Knead.
Nothing.

She switched to knuckles.

Knead. Knead. Knead.
Then a sound, like a breath.

The heroin and methamphetamine overdose that had gripped the man’s body started to succumb to Kowalski’s double hit of Narcan. With help, the man, named Jay, sat up.

Paramedics arrived with oxygen and more meds. Death, held at bay, again. Kowalski headed back across the park, toward the century-old, cream-colored building where she works.

“She’s not a paramedic,” the guard, Sterling Davis, said later. “She’s just a teen-adult librarian — and saved six people since April. That’s a lot for a librarian.”

The excerpt above is from an article on CNN.COM by Darran Simon

Jay was lucky that Chera Kowalski knew about opioid overdoses and was trained to administer Naloxone (aka Narcan), the “antidote” for opioid overdose. Given that Opioid prescriptions have quadrupled since 1999, it’s hardly surprising that Jay’s situation is repeated over 1000 times each and every day in the United States alone. To be sure, there is a ton of blame going around. At first, the doctors bore the brunt as they irresponsibly and recklessly over prescribed opioids for their patients in severe pain. After awhile, the net widened and drug makers like Purdue Pharmaceutical, the maker of Oxycontin, took the heat.

But recently, municipal governments, the DEA, and others have a new target – the nation’s big three drug distributors: McKesson, AmersourceBergen and Cardinal Health. All three have been in hot water before and had to pay fines. And, as the nation’s opioid crises shows no signs of slowing, all three are involved in litigation. We will focus on McKesson for a couple of reasons: First, it’s the largest pharmaceutical distributor in the U.S. Second, it’s a member of the In Sickness and Wealth personal portfolio, and thus we have a vested interest in the affairs of this company.

The DEA and other government departments hold that the drug distributors shipped obscene amounts of opioids to certain regions (and pharmacies).  According to the June 15th issue of Fortune Magazine, between 2007 and 2012, distributors shipped enough opioids like Oxycodone and Hydrocodone to provide every man, woman and child with 433 doses. The big three accounted for half of the dosages.

The result, in addition to the large fines that all three have paid, is stepped-up compliance and surveillance. New systems in place should allow the big three to monitor when a pharmacy or a region is getting opioid dosages above a certain threshold. If they exceed the threshold, the deliveries will stop. If the dosages are justified medically, then the thresholds can be lifted temporarily, or permanently with appropriate DEA and government approvals.

It took years for America to get into this mess, and will take the cooperation of many to wage war against the epidemic that is claiming nearly 100 lives a day. Doctors and patients share in the blame as well, given the reckless prescribing activity over the past 15-20 years.

As shareholders, we are concerned over these events. Hopefully eight-figure fines will get all drug distributors, including McKesson, to wake up and be in compliance. Should this fail to occur, we would seriously consider selling our shares. Generally, McKesson has been a blue chip company and is a major part of the pharmaceutical ecosystem. Missteps always occur in healthcare, but if they fail to be corrected after repeated warnings (and fines), then we will not look the other way, and will take appropriate action. Moreover, as prosecutors and plantiffs set their sights on drug distributors like McKesson, Cardinal and AmerisourceBergen, the lack of compliance could prove costly, should lawsuits go against them.

Dave Lerman / Jodie Warner

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