MANHATTAN (CN) — The first pharmaceutical executive found guilty of federal drug trafficking charges was sentenced Wednesday to more than two years in prison in a landmark case that examined the role of drug distributors in fueling the opioid epidemic.
Laurence F. Doud III was convicted last year of narcotics and fraud conspiracy, charges that prosecutors billed as the first of their kind against a pharmaceutical wholesaler and its executives.
As CEO of Rochester Drug Cooperative, Doud told employees to ignore red flags that indicated pharmacies were working with dirty doctors, filling sham prescriptions that put oxycodone and fentanyl on the street. Such cases should have been reported to the U.S. Drug Enforcement Administration for further investigation, government attorneys explained at the two-week trial in early 2022.
In the trial, Doud’s attorneys called it a business decision to work with pharmacies that signaled wrongdoing: dispensing opioids at higher than normal amounts, proportions or doses, or reporting more than roughly 10% of customers paying in cash.
Doud is 79. His 27-month sentence falls well below the 180 months requested by the government. U.S. District Judge George Daniels agreed to allow Doud’s release pending appeal. In February, Daniels reduced the sentence enhancement by vacating jurors’ finding that Doud had conspired to distribute at least 400 grams of fentanyl.
Defense attorney Robert Gottlieb was pleased with the sentence, he told reporters after the hearing.
“We are thrilled that the 15-year recommendation by the government was thrown out the window,” Gottlieb said. “That was an offensive recommendation in light of the facts of this case.”
Previewing the anticipated Second Circuit challenge, Gottlieb cited a June 2022 Supreme Court decision — published several months after Doud’s conviction — which determined that, in prosecutions of doctors accused of running pill mills, the government must prove criminal intent.
Opioids are responsible for a significant and increasing percentage of the nearly 1 million deaths from drug overdoses between 1999 and 2020, according to data from the Centers for Disease Control and Prevention.
Doud’s attorneys, who asked in their sentencing memo for no prison time, argued that the government had scapegoated their client, “characterizing Mr. Doud, in essence, as the arbiter of this country’s opioid crisis and seeking to punish him accordingly.”
Gottlieb said on Wednesday that Doud came up in the drug business at a time when the perils of opioids weren’t yet widely understood. As time went on, Doud should have been more vigilant.
“Mr. Doud clearly just didn’t keep up,” Gottlieb said. “He failed to adjust to the new, dangerous world.”
Doud also addressed the court after his attorney took a seat, telling Daniels he never wanted to see anyone hurt by the drugs he sold. “I recognize what a lousy job I did with watching the compliance department, and making sure the rules stuck, and paying attention to the red flags,” he said.
One government witness, Barbara Castro, served to illustrate the personal toll of opioids. While struggling with addiction Castro filled illicit prescriptions at a pharmacy that bought its drugs from Doud’s company, she explained during her tearful testimony, despite showing signs of drug abuse.
“You could clearly see the track marks on my arms,” Castro testified. “I was clearly impaired. I would nod out in the waiting room with my head between my legs, waiting to see the doctor.”
Prosecutors also called Rochester Drug’s former compliance officer, William Pietruszewski, who pleaded guilty to a narcotics conspiracy and defrauding the government.
U.S. Attorney for the Southern District of New York Damian Williams said the case is part of his office’s endeavor to get justice for opioid crisis victims.
“Laurence Doud cared more about his own paycheck than his responsibility as CEO of RDC to prevent dangerous opioids from making their way to pharmacies, drug dealers, and people struggling with addiction,” Williams said in a statement. “The sentence imposed today holds Doud responsible for shipping massive amounts of dangerous and highly addictive oxycodone and fentanyl to pharmacies that he knew were illegally dispensing those controlled substances.”
In November 2022 the New York attorney general announced a $523 million settlement with drugmaker Teva Pharmaceuticals for its part in perpetuating the opioid epidemic. The agreement is tacked onto more than $200 million Teva had already agreed to pay New York as part of a $4 billion global settlement.
Follow @NinaPullano
Subscribe to Closing Arguments
Sign up for new weekly newsletter Closing Arguments to get the latest about ongoing trials, major litigation and hot cases and rulings in courthouses around the U.S. and the world.
Additional Reads
-
Fifth Circuit reverses $1.6 billion judgment in IBM case April 30, 2024 -
