SEATTLE (Legal Newsline) - The last witness appeared on Monday in a trial that has gone on for more than four months accusing three of the country’s largest distributors of opioid pills of causing an overdose epidemic in Washington State.
John MacDonald, principal executive for the Berkeley Research Group, a California-based consulting firm specializing in health analytics data, was brought in by defense attorneys to counter earlier testimony of plaintiff witness Lacey Keller.
MacDonald accused Keller of skewing her statistics, overstating profits of Cardinal Health in providing opioid drugs and the amounts shipped.
“Are there reasons why they (Keller’s numbers) were overstated?” Steve Kaiser, attorney for Cardinal Health asked.
“Yes,” MacDonald said. “She (Keller) did not include overhead costs including taxes. These are real costs of Cardinal Health and the numbers are overstating the company’s profitability.”
The bench trial is being streamed live courtesy of Courtroom View Network.
Washington State Attorney General Bob Ferguson filed a lawsuit against prescription drug distributors McKesson, Cardinal Health and AmerisourceBergen Corp. in 2019, accusing them of irresponsibly over-promoting and distributing opioid drugs to pharmacies and doctors' offices that led to hundreds of overdose deaths in the state. The Washington State Department of Health estimated 1,200 in 2020.
Distributors take pills from the manufacturers and supply them to hospitals, doctor’s offices and pharmacies. The most commonly shipped opioid drugs include OxyContin, Hydrocodone, methadone and fentanyl.
Ferguson is asking for $32 billion in damages to enact anti-drug programs, but a state victory could result in a much higher award when surrendered profits and penalties are added in.
During Monday’s session, Kaiser sought to diffuse the testimony of Keller, a data analyst with MK Analytics, who appeared in December as a witness for the state. Keller had presented statistics that showed the ordering of opioid drugs took a big leap in about the year 2006. During the course of the trial, plaintiff attorneys maintained the worsening situation resulted because of large numbers of pills from irresponsibly prescribing doctors, a rise in internet (not brick and mortar) pharmacies, and reckless distributing clinics called "pill mills."
“Pharmacies began to exceed their average orders,” Keller said at the time.
Keller gathered information from the government's Automated Reports and Consolidated Ordering System (ARCOS) that showed annual shipments of dosage units (pills) had jumped from 209.7 million in 2006 to 2.1 billion in 2018. Her information said McKesson was tops in revenue for the three companies, at $1.01 billion for the years 2006 to 2018, Cardinal at $89.1 million and AmerisourceBergen Corp. at $360 million.
MacDonald said his interpretation of the ARCOS data and the transactions of Cardinal Health showed that Keller had mistaken her numbers.
“You’re offering no opinions about the appropriateness of Cardinal Health (transactions)?” Kaiser asked.
“No,” MacDonald answered.
McDonald said three Washington counties discussed by Keller, Garfield (county seat Pomeroy), Pacific (South Bend) and Pend Oreille (Newport) had large populations of senior citizens 65 and older. The average age of residents was 10 years older than other areas of the state (averaging 37 years old state-wide).
“The over-65 was significantly higher,” MacDonald said. “The older residents are much more likely to receive an opioid prescription (than younger residents) and the (drug) doses are higher. Counties with a higher older population have a higher number of prescriptions.”
More old people meant more pills for each older person.
McDonald also indicated the three distributors were in a “middle-man role” between the manufacturer and the pharmacy and had a lower profit margin than would be expected. Cardinal Health for example had a profit margin of 1% with .3% used to fund its operations.
“That’s to keep the trucks moving and the lights on,” McDonald added.
Cardinal Health’s revenue estimated at $589 million from the years 2006 to 2018 MacDonald adjusted downward to $441 million, and its profit margin from an earlier estimated $2.2 million to $1.7 million.
MacDonald said Cardinal Health’s amount of opioids shipped into Washington State was never a “significant amount” during the years 1998 to 2019.
Mike Pendell, attorney for the state, on cross examination questioned the accuracy of MacDonald’s findings saying that his revenue calculation for Cardinal was $200 million off. However, MacDonald defended his estimates saying they were conservative figures.
Both attorneys accused each other of playing loose with the figures and the truth. Pendell said there were a “ton of opioids” in the counties.
“It was a giant red flag that Cardinal and the other distributors should have been aware of,” he said.
Kaiser countered that a math exercise Pendell had engaged in with MacDonald had no foundation or relevance.
“The concept is just wrong,” he said.
With the end of MacDonald’s testimony, the defense rested its case and the evidentiary phase of the trial. Closing arguments will be heard on April 12, 13 and 14. A conclusion of law, King County Judge Michael Scott deciding on the merits of the case, will be held on April 20 through 22.