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Tuesday, January 28, 2020

DOJ watchdog isn't impressed with the opioid 'Whistleblower'; What will jurors in historic trial think?

Attorneys & Judges

By John O'Brien | Oct 17, 2019


CLEVELAND (Legal Newsline) – Is he blowing the whistle or passing the buck? A badge-flashing, gun-toting bulldog, or an ineffective bureaucrat? Is he defined by an appearance on "60 Minutes," or the fact that trial lawyers pay him $500 for 60 minutes of his time?

These are questions jurors in a historic trial will face when they view the testimony of a former DEA official who watched the boom of the nation’s addiction crisis. It should be riveting and combative - especially now that a second federal watchdog says Joe Rannazzisi shares in the blame.

Plaintiffs lawyers are likely to portray Rannazzisi as a hard-nosed DEA agent who got his hands dirty in the field before taking on Big Pharma as an administrator. He then had the strength to tell his story to the world on “60 Minutes,” they’d say, just as a tobacco executive did two decades ago.

Defendants will say he was a detached government official who refused to answer their concerns and flooded the market with opioids while people died.

Rannazzisi, who now makes $500 an hour as a consultant for personal injury lawyers seeking their shares of a huge payday, headed the DEA’s Office of Diversion Control from 2005-15. While there, he ordered that more and more opioid products be made even as overdose deaths went up.

Upon leaving office, he blamed distributors and lawmakers for what had happened on his watch, notably on a “60 Minutes” piece titled “The Whistleblower.” But a report from the Department of Justice’s inspector general released earlier this month said his DEA was slow to respond to the increase in the diversion of opioids.

Not to mention all those FDA-approved opioids Rannazzisi told manufacturers to make when he set yearly quotas. The combined quotas for oxycodone and hydrocodone nearly tripled when Rannazzisi was in office, and there were 1.6 million manufacturers, distributors and prescribers in the opioid market when he left – an increase of 45% from when he started.

“Further, we found that DEA policies and regulations did not adequately hold registrants accountable or prevent the diversion of pharmaceutical opioids,” the DOJ inspector general said.

He’s scheduled to take the stand in the bellwether trial in the federal court proceeding that holds roughly 2,000 lawsuits by cities, counties and other entities. The first plaintiffs are the Ohio counties Cuyahoga and Summit, and their trial is scheduled for Oct. 21.

Rannazzisi is listed second on the plaintiffs’ witness list.

Watchdogs say leadership was lacking

The inspector general report said the DEA has not properly vetted new applicants who wish to participate in the opioid market – that it had no system that properly identified applicants who should’ve been scrutinized.

As registration fees helped fund a $300 million budget, Rannazzisi’s ODC denied or revoked 370 registrations or applications in his 10 years.

“(B)eginning in 2013, DEA rarely used its strongest enforcement tool, the Immediate Suspension Order, to stop registrants from diverting prescription drugs and DEA continues to experience challenges in rendering timely final decisions in administrative actions against registrants for diversion and other alleged violations,” the DOJ OIG says.

It was reported to the DOJ OIG that if a pharmacy was sold to a new corporation, the new corporation could circumvent the preregistration process.

“The new corporation could assume the previous corporation’s registration and order as much oxycodone or any other controlled substance as desired without obtaining a new DEA registration,” the report says.

And if an applicant did not disclose past criminal history, suspensions, revocations or other problems, the DEA did not inquire further, the report says. It adds that some DEA staff did not follow up even if the applicant did disclose those issues.

If the DEA did take action and revoke a license, how long did a registrant have to wait before it could reapply? One whole day.

But the most important criticism of Rannazzisi is likely the yearly quota he set for manufacture of opioid products. From 2002 (three years before he started) to 2013 (eight years into his tenure), the DEA’s quota for oxycodone increased more than 400 percent. The graphic here, shaped like the State of Virginia, shows the sharp rise under Rannazzisi.

It’s not the first time the DEA’s response to the opioid crisis has been criticized by a government watchdog. A 2015 audit by the U.S. Government Accountability Office set three recommendations for how to proceed after it found less than 40% of registrants surveyed believed DEA enforcement actions helped decrease drug abuse and diversion.

As distributors claimed they weren’t sure what was required of them, the GAO audit agreed. It recommended, among other things, that the ODC should develop guidance for distributors regarding the monitoring and reporting of suspicious orders.

That recommendation remains open more than four years later. The GAO website says the DEA has revised current regulations regarding suspicious orders, and that the draft was undergoing internal review.

What will the jury think of him?

Rannazzisi is listed second on a list of 65 possible witnesses to be called by plaintiffs attorneys, who include Simmons Hanly of Illinois, Motley Rice of South Carolina, Greene Ketchum of West Virginia and The Lanier Law Firm of Texas.

Mark Lanier, whose showmanship in a talcum powder trial was previously described by Legal Newsline (he used a block of cheese), began a deposition of Rannazzisi by attempting to give him the nickname “The 60-Minute Man.”

“I have done a little roadmap for you and for the jury so that we can follow along. The roadmap, I am calling you The 60-Minute Man. You have been on '60 Minutes'; is that right?” Lanier asked.

Then came the imagery. Lanier made sure to mention that the mascot of Rannazzisi’s alma mater, Butler University, is a bulldog. He also touched on Rannazzisi’s history as a DEA special agent.

“So you had, like, one of these DEA badges we see people flash on TV?” Lanier asked.

“Yes, sir. Special agent badge.”

“Did you, like, carry a gun and stuff?” Lanier asked.

“Yes, sir.”

“When we see the TV shows and they make the drug busts of, like, the person selling the street drugs or something like that, are those DEA agents sometimes?” Lanier asked, to an objection.

“I mean, did you ever, like, arrest anybody or do any of that stuff?” Lanier asked.

“Yes, sir.”

It’s possible Rannazzisi’s deposition could be played, if he is unable to make it to the courtroom, according to an Oct. 10 document by the plaintiffs that features 23 other witnesses.

Walgreens recently asked Judge Dan Polster to prevent the jury from getting part of Lanier’s picture of Rannazzisi, asking him to prevent any references to “The 60-Minute Man.” The company says plaintiffs lawyers will paint him as an “honest whistleblower” because he appeared on the show and was the subject of a Washington Post profile.

The plaintiffs said they plan to mention the broadcast – “(A) reputable news outlet’s use and reliance on Mr. Rannazzisi’s comments in a national broadcast or publication constitutes valid and admissible evidence of his credibility.”

But Walgreens disagrees: “Mr. Rannazzisi’s credibility is for the jury to determine on its own, based on their evaluation of his testimony and demeanor, not based on hearsay evidence that cannot be tested in court.”

Legal Newsline has already reported on the major issues brought up by defendants during their deposition of Rannazzisi this year. In it, he admitted that the DEA required distributors to set up a system for identifying suspicious orders but would never let a company know whether its system complied with that regulation.

He also said his office would not have helped companies determine whether a shipment was suspicious.

“It’s DEA’s policy that they do not advise when to ship or when to file a suspicious orders. That’s a business decision that, under the regulations, is maintained by the distributor,” Rannazzisi said.

Distributors seem to be the biggest critics of Rannazzisi’s reign, complaining the DEA would not help them when they asked and would not give them access to the order database known as ARCOS.

A Wall Street Journal report from this week casts doubt on whether attorneys for those companies will be there to attack Rannazzisi on the stand. McKesson, AmerisourceBergen and Cardinal Health were talking with the attorneys general of several states about a possible $18 billion settlement.

Putting together a settlement that appeases all plaintiffs is nearly impossible, said OxyContin-maker Purdue Pharma when it opted to file for bankruptcy rather than continue in the litigation. State AGs have tried to wrest control of litigation from counties and cities, saying only the State can represent its citizens.

The defendants, meanwhile, have asked that Rannazzisi – and all attorneys and witnesses – not be allowed to make comments outside the courtroom. In 2018, Judge Polster expressed disappointment upon viewing another “60 Minutes” segment on opioids.

The Oct. 14 motion referred to Rannazzisi’s comments on “The Whistleblower” that the opioid industry was out of control.

“Such statements, if made while the trial is going on, would violate the Court’s admonition that the case should not be tried outside the courtroom,” the motion says.

From Legal Newsline: Reach editor John O’Brien at

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Organizations in this Story

AmerisourceBergenU.S. Drug Enforcement AdministrationCardinal HealthMcKesson Corporation

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