AP Exclusive: Sackler foreign firm caught up in opioid probe
PARMA, Italy (AP) — The police huddled for hours each day, headphones on, eavesdropping on the doctor. They'd tapped his cellphone, bugged his office, planted a camera in a trattoria.
They heard him boast about his power to help Big Pharma make millions pushing painkillers, and about all the money they say he was paid in exchange.
Now Dr. Guido Fanelli is at the center of a sprawling corruption case alleging he took kickbacks from an alliance of pharmaceutical executives he nicknamed "The Pain League." Its members, police say, included managers with Mundipharma — the international arm of Purdue Pharma, which is facing some 2,000 lawsuits in the United States over its role in the opioid crisis that has claimed 400,000 lives in two decades.
This is the first known case outside the U.S. where employees of the pharmaceutical empire owned by the Sackler family have been criminally implicated, more than a decade after Purdue executives were convicted over misleading the American public about the addictiveness of OxyContin.
Hundreds of pages of investigative files obtained by The Associated Press detail how Fanelli helped executives from Mundipharma's Italian branch and other companies promote painkillers by writing papers, organizing conferences and working to counter government warnings that opioid consumption was spiking and that physicians should be cautious. The message trumpeted, the AP found, was that there is an epidemic of chronic pain, addiction fears are exaggerated and not prescribing opioids can amount to neglecting the suffering of patients.
Those are the same practices, experts say, that the pharmaceutical industry employed in the U.S. beginning in the 1990s that helped pave the road to disaster.
What Italian police overheard on their wiretaps offers a look at how pharmaceutical executives still pushed opioids abroad even after the cause and consequence of the American epidemic had become apparent.
As the U.S. market contracts, opioid consumption is climbing overseas. Canada and Australia are already following America's catastrophic course, with rising rates of addiction and death. Others may be on the cusp of crisis: Researchers in Brazil report that prescription opioid sales have skyrocketed 465 percent in six years. Overdose deaths are going up in Sweden, Norway, Ireland and England, fueled by prescription painkillers and the illicit drug trade.
Opioid consumption has increased in Italy, too, though authorities say widespread addiction has not taken root in this country with historically strict regulations and a cultural skepticism of the drugs — both of which Fanelli apparently worked to reverse.
"It makes me feel sick more than anything else," U.S. Rep. Katherine Clark said when she learned of the investigation from the AP.
Clark sent a letter to the World Health Organization in 2017, warning of "deceptive and dangerous practices" of Mundipharma and Purdue and imploring the agency to act — before the American epidemic becomes a pandemic.
"We don't want to be proven right," she said.
Two Mundipharma managers accepted plea bargains in January in connection to allegations that they paid the doctor to help sell more drugs. A lawyer representing them said the pleas are not an admission of guilt. The company's Italian branch was fined. A spokesman for Mundipharma Europe said the corporation did not admit wrongdoing and denied it endorsed any message minimizing addiction risks.
The Carabinieri, Italy's storied paramilitary police corps, code-named its case "Pasimafi," the name of the yacht they say the doctor bought with his kickbacks.
They were listening in when an alleged conspirator joked that Mundipharma employees had given Fanelli so much money, the company logo should be plastered on the stern.
"THE BUSINESS OF PAIN"
The Carabinieri stumbled onto Fanelli.
In early 2015, the national health system noticed an unusually high expenditure for blood filters. Officer Giandomenico Nupieri tapped a suspect's phone. Earlier in his career, Nupieri had investigated mobsters, so his ears were attuned to cryptic codes of crime. The suspect mentioned Fanelli as well-connected and able to help boost pharmaceutical sales, and said he planned to meet him at a trattoria in Parma, the northern Italian city known for its prosciutto and parmesan.
Investigators installed a camera, researched Fanelli and realized they were onto something bigger than blood filters.
Fanelli was a star in the Italian medical world, respected by the government and often featured on the news, with his unbuttoned shirt collars and mop of pepper-gray hair. He served as a chief of the anesthesiology and pain therapy department at Maggiore Hospital in Parma, and called himself the father of a 2010 law that made opioids easier to prescribe, which he championed as necessary to ease suffering.
But in 2009, as he was helping to draft the law, prosecutors allege he began meeting with "The Pain League," including managers from Mundipharma, several Italian pharmaceutical companies and the Italian arm of German-based Grunenthal.
"The drug companies saw him as the vehicle to commercially promote their own drugs," said Maj. Gianfranco Di Sario, who oversaw the police investigation. Prosecutors allege that Fanelli drew in a web of conspirators, from organizers of medical conferences to fellow physicians. Fanelli, through his lawyer, declined comment.
Italy, unlike the U.S., has strict laws limiting drug companies' influence on medical training and practice. A specialized unit of the Carabinieri is tasked with safeguarding citizens' health. The Italian language even has a specific word for the crime committed by doctors who work to drive up drug sales: "comparaggio."
So police got to work, listening in to Fanelli's conversations and reading his text messages.
In partial transcripts obtained by the AP, Fanelli often exaggerates his dominance in medicine. He claimed he once confronted Dr. Nora Volkow, director of the United States' National Institute on Drug Abuse, after she'd asserted that opioids are often not the best solution for chronic pain. Fanelli crowed of telling her to focus on America and let him take care of the rest of the world. Volkow, through a spokesperson, said she does not know Fanelli and has no recollection of the confrontation.
Luca Finocchiaro, an attorney for a Grunenthal manager implicated in the case, described Fanelli as a motormouth and a braggart, and said the executives would put down their phones, not bothering to listen, as the doctor prattled on "without much sense." The Grunenthal employees maintain their innocence.
And yet the doctor was paid well: According to the investigative file, 464,000 euros from Mundipharma (about $500,000) and 640,855 euros from Grunenthal (about $700,000) flowed into businesses Fanelli allegedly set up to hide the payments, beginning in 2009. Spokesmen for Mundipharma and Grunenthal said the corporate offices thought the money was for legitimate services, like consultancy and events.
Police allege a "bustarella" — an envelope filled with illicit cash — would occasionally arrive from officials with other companies at Fanelli's hospital office.
"I created a system," police say the doctor bragged. "That is the business of pain."
A STILL-BOOMING BUSINESS
OxyContin came onto the American market in 1996. Doctors had been apprehensive about opioids, notorious for their miraculous painkilling power but also extraordinary addictiveness, and tended to prescribe them only to the extremely sick and dying.
But Purdue Pharma claimed that OxyContin, twice as potent as morphine, was minimally addictive when prescribed for pain. Its marketing coincided with other forces, including a movement in medical circles to better manage patients' pain. Opioid prescriptions increased for ailments like arthritis, backaches, migraines. The prescription rate quadrupled between 1999 and 2010, and overdoses climbed.
The spectacular success of OxyContin added Purdue's owner, the Sackler family, to the Forbes list of richest American families . In New York, there's a Sackler Wing at The Metropolitan Museum of Art and a Sackler Center for Arts Education at The Guggenheim. There's a Sackler Room at the National Gallery in London, a Sackler Wing of Oriental Antiquities at the Louvre.
Protesters have started storming the museums, raining prescription slips from balconies and unfurling signs that read "Shame on Sackler. 200 Dead Each Day."
In the U.S., Purdue and three executives were fined more than $600 million after pleading guilty in 2007 to misbranding OxyContin by downplaying its addictiveness. Purdue and the Sacklers this year agreed to pay another $270 million to Oklahoma to settle a lawsuit alleging misleading marketing helped unleash the U.S. addiction epidemic.
The company has vehemently defended itself. Purdue spokesman Bob Josephson notes the U.S. Food and Drug Administration approved OxyContin for chronic pain and that a judge recently dismissed one lawsuit after finding the company's marketing was consistent with its FDA approval. Hundreds more lawsuits are still pending against Purdue and other companies. The Sacklers, through a spokeswoman, declined to comment.
Through all this, the family's international operation has stayed mostly out of the limelight.
Mundipharma, like Purdue, is owned by a network of trusts that benefit the Sacklers. Its websites date the company's beginnings to 1952, when two Sackler brothers bought Purdue. Patrice Grand, a spokesman for Mundipharma Europe, said the companies have different managers and portfolios and do not share strategies.
Mundipharma's branch in Italy began in 2005; the Italian Business Register lists the owners as three Luxembourg companies and American-based Rosebay Medical Co., which is named in two of the U.S. opioid lawsuits . A 2017 U.S. Securities and Exchange Commission filing lists Richard and Jonathan Sackler as members of Rosebay's board.
Mundipharma's network now operates in more than 120 countries, and an emerging markets group has expanded into Asia, Africa and Latin America, selling an assortment of drugs that includes opioids.
A 2016 Los Angeles Times story reported that Mundipharma was repeating some of Purdue's controversial marketing tactics overseas, prompting U.S. Rep. Clark and 11 other members of Congress to urge the World Health Organization to intervene before other nations import addiction. All they heard back was that their letter had been received.
"We cannot just sit by and hope this is a uniquely American experience," Clark told the AP.
Mundipharma sent a representative to the WHO to defend the company's practices as ethical, Grand said. Mundipharma has stopped promoting opioids in Europe, he said, and the drugs now make up less than 40 percent of European sales.
The U.S. has backed away from recommending opioids for chronic pain. The National Institute on Drug Abuse estimates that up to 29 percent of patients prescribed opioids for chronic pain eventually misuse them. And in 2016, the Centers for Disease Control issued guidelines finding no good evidence that opioids are effective long term and the risks far outweigh the benefits.
That same year, Mundipharma's operation in Italy released the results of a study proclaiming nearly half of Italians suffer chronic pain. The news release offered a solution: opioid painkillers.
"The still limited use of opioid drugs derives from cultural heritage," it said, "and unfounded fears about the alleged risks of addiction."
"THE WEAPONS OF SCIENCE"
Luca Pani, then head of the Agenzia Italiana del Farmaco, which monitors medication, told the media that until the 2010 law that Fanelli helped write, doctors were reluctant to prescribe opioids. But the numbers — a more than 30 percent jump in certain formulations — represented a reversal "that takes on the semblance of abuse," Pani said. He urged doctors to be cautious.
Prosecutors say Fanelli sprang into action and told a Grunenthal executive not to appear at an upcoming press event. Journalists would ask about the government's warning, Fanelli allegedly said: "And you are exposed."
The doctor invited executives from Mundipharma and Grunenthal, along with Italian drug companies Molteni and Angelini, to Milan to strategize how to counter the warning, prosecutors say, and then he got to work implementing the plan. Representatives for Molteni did not respond to requests for comment. A lawyer for Angelini and one of its managers said his clients did nothing wrong.
Fanelli prepared a scientific paper — "Opioids for chronic non-cancer pain: a critical view from the other side of the pond" — that said the alarm bells ringing in the United States should not be applied to other countries and that doctors should continue prescribing opioids for chronic pain. He texted the Italy Mundipharma executives: "Good news, position paper against addiction, supporting opioids signed by me," prosecutors allege. The paper, one of several Fanelli authored downplaying the risk of addiction, was published in the journal Minerva Anestesiologica.
Police officers allege that they once overhead Fanelli brag to a Mundipharma manager that the papers he wrote were "the weapons of science."
Another paper, prosecutors allege, was published on behalf of Molteni. Fanelli allegedly drove his Porsche to a cafe to meet a Molteni executive and later boasted to his wife about receiving "a score of brioches." Prosecutors contend that was code for a 20,000 euro payoff. A lawyer for the Molteni executive said his client declined to comment.
In the U.S., lawsuits against Purdue and other companies claim they paid "key opinion leaders," often prominent pain doctors, who wrote papers that added a veneer of science to commercial claims about the safety of opioids.
One Fanelli paper cites the same specious science once used in the U.S., and others claim that reining in prescriptions would lead to undertreating pain and that pain treatment is a human right. That message liberalized the culture of opioid prescribing for a generation of American doctors, experts say.
"They're using the same playbook that worked in the United States," said Andrew Kolodny, executive director of Physicians for Responsible Opioid Prescribing, "despite knowing that it led to a public health catastrophe."
Grand, the Mundipharma spokesman, rejected that, saying: "There is no such playbook." He said the corporate office was unaware of any alleged wrongdoing and the relationship with Fanelli was managed entirely by the executives in Italy.
Fanelli often said that Italy should liberalize its prescribing culture, too. The newspaper "La Repubblica" interviewed him for a story about the spike in opioid consumption, and he said the real risk was that doctors would limit prescriptions even more.
When an executive from Italian pharma company Angelini picked up the newspaper, investigators say, he called Fanelli to complain.
Fanelli defended himself as having the guts "to go out on a limb."
"BRINGING IN THE MONEY FOR PAIN"
A traveling road show pulled into Parma on April 16, 2015, and set up an inflatable tent. Investigators heard Fanelli quip that it resembled a giant condom.
The GP Open Road was making its eighth stop on a 16-city tour professing about the plight of chronic pain. General practitioners were the target audience; a press release said many doctors were still "far from adequately managing the disease of pain." One story about the show quoted Fanelli saying common anti-inflammatory drugs were overused and that opioids should be prescribed instead.
The event was hosted by the nonprofit Vivere Senza Dolore, or "Living Without Pain." The president of the board was Marta Gentili, Mundipharma's marketing manager in Italy. The secretary, according to prosecutors, was the founder of a public relations firm that counted Mundipharma's Italian branch among its clients.
As doctors filed into the tent, five Carabinieri officers arrived at a yacht club an hour away near the seaport of La Spezia.
Police had been listening days before when Fanelli allegedly described a plan to launder 31,000 euros from his Mundipharma partners by claiming the yacht was catering lunch for the GP Open Road. Officers found the boat covered with a tarp and the parking lot empty.
The yacht, the Pasimafi V, was owned by a company Fanelli allegedly created to cover his kickbacks; the same firm officially owned Fanelli's Porsche Macan and 4,300-square-foot penthouse in Parma with a rooftop swimming pool.
Investigators also were listening when Fanelli complained about Mundipharma to an alleged co-conspirator; the other man joked that Fanelli should be careful and his yacht might as well have "the logo Mundipharma on its stern" because of all the money he'd supposedly gotten. Fanelli retorted that "GF," his initials, should be on a Mundipharma executive's bank account because he'd helped the company make millions off drugs.
The doctor's grandest plan to help the companies, prosecutors allege, was a continuing medical education conference called the World Medicine Park, which Fanelli billed as a vital global discussion on pain management. In private, police allege, Fanelli said the goal was: "Bringing in the money for pain."
Fanelli was scientific director of the conference, held in May 2015 on the island of Mallorca.
Nick Ross arrived and immediately felt unnerved. Ross, a British broadcaster, often moderates conferences and had expected a familiar scene: earnest doctors packed into classrooms taking notes. Instead he found temporary tents set up at the beach and empty lecture halls.
"There seemed to be a hell of a lot of pharmaceutical people there," recalls Ross. "And I remember being concerned, even suspicious."
Prosecutors would later describe the event as "upside down." The director is supposed to pick the speakers and subjects, but Fanelli, prosecutors say, turned that task over to pharmaceutical companies, including officials with Mundipharma and Grunenthal.
It was "exclusively a marketing event, formally authorized for scientific aims," prosecutors contend, "but which had nothing to do with being scientifically independent."
"A BLOW TO THE HEART"
After two years of listening, the Carabinieri moved in.
At 4 a.m. on May 8, 2017, police fanned out across Italy, pounding on doors, rounding up physicians and executives, and carting off documents from offices.
They jolted Fanelli out of bed. It was a spectacular fall from grace for a man who'd appeared on TV days before to promote painkillers.
Calls from panicked patients poured into the hospital where Fanelli worked. "Patients were rightly asking: 'Was I treated properly or not?'" said Massimo Fabi, the hospital's director general. "The news arrived like a blow to the heart."
Among those implicated were Marco Filippini, Mundipharma's general manager for southern Europe, including Spain, Portugal, France, Belgium and Turkey; Riccardo Cerbai, the business and marketing director in Italy; and Gentili, the marketing manager. The Mundipharma spokesman said Filippini and Cerbai were immediately suspended and then fired last September. Gentili had already left the company.
In January, Filippini and Cerbai agreed to plea bargains. Filippini got a suspended sentence of one year, 10 months and one day, while Cerbai received a suspended sentence of one year, six months and seven days. The executives declined interviews through their lawyer.
Gentili denied wrongdoing and wrote in a statement that she has dedicated her life to helping people with chronic pain; she awaits a judge's decision on how the case should proceed. A series of preliminary hearings began this month.
Also implicated and awaiting next steps are Grunenthal's Alberto Grua, chief commercial officer for Europe, Australia and North America, and Thilo Stadler, general manager for southern Europe. They are no longer with the company, spokesman Stepan Kracala said. Marketing director Sara Carlini was named in the probe but remains employed. Through lawyers, they all proclaimed innocence.
Dario Romano, the Angelini lawyer, said his clients chose not to seek a plea bargain because they are confident they will be exonerated should the case go to trial.
Deputy Prosecutor Paola Dal Monte has requested indictments against 55 people and 10 companies. Mundipharma and Grunenthal Italia are not among them, because they accepted plea bargains for failing to prevent the alleged activities. Mundipharma's Italian branch was fined 40,000 euros and Grunenthal Italia, 50,000 euros.
Both companies, spokesmen said, immediately launched internal investigations.
Grunenthal retrained employees and created a whistleblower hotline, Kracala said. Mundipharma's probe found violations of company policies, Grand said, but concluded "a significant part" of the payments into Fanelli's businesses appeared to be legitimate. Mundipharma revamped policies to the satisfaction of Italian prosecutors, who withdrew a motion seeking to suspend the company from government contracts.
Fanelli spent four months on house arrest at his penthouse in Parma. He was suspended without pay and barred from practicing medicine pending resolution of the case. He is now free to come and go as he waits to learn if he will stand trial.
"WHY CAN'T IT HAPPEN HERE?"
The scandal has not caused this country to rethink the law Fanelli helped write. At an annual review after the arrests, Emilia De Biasi, then a member of Italy's Senate, said the allegations shouldn't sully a law "that many envy." Other countries, including Mexico and Poland, have since passed measures to make it easier to prescribe opioids.
Italian consumption of prescription opioids went from 1.1 daily doses per thousand people in 2005 to 4.5 in 2017, according to government reports, but the country so far shows no sign of an addiction crisis.
Dr. Antonio Boschini works at San Patrignano center, among the largest residential rehabs in Europe near the farm town of Coriano. He said he believes Italy has been spared in part because Italians don't share the American expectation that all things can be cured by a pill. But he worries that the experience of the U.S. opioid epidemic "hasn't been received and absorbed" in Italy.
Several of his patients have recently returned from the emergency room for sprained ankles or backaches with prescriptions, feeding his fear that some doctors don't recognize the risk.
"There is this feeling that this danger doesn't exist. It's a problem that happened there, but here it won't happen," Boschini said. "Why can't it happen here?"
Grunenthal's spokesman said the company is analyzing whether patterns from the American epidemic are emerging elsewhere and will soon release the results of the research. The company, which sells drugs in more than 100 countries, is committed to reaching patients in places that have little access to pain medications while limiting addiction risk, he said.
No other country is experiencing an addiction problem on a U.S. scale, Mundipharma's Grand noted. Globally, the network continues to expand. In January, Mundipharma told an Asian business journal that China is set to become its second-largest drug market and could surpass U.S. sales by 2025.
Keith Humphreys, a Stanford University professor, published a paper in 2017 pleading with the world to pay attention, especially as prescription rates rise in developing countries with minimal regulation. "As Oxy marches around the world, the things we see in Europe will be disturbing," he said, "but less so than they will be in Botswana or India."
In Italy, the Fanelli case has barely registered in this country accustomed to corruption scandals and an ocean away from the American plague.
The Pasimafi V yacht sits sequestered on wooden planks at a dock. A sign reading "subject to seizure," on the Carabinieri's letterhead, is taped to the cabin door. Fanelli's Porsche and penthouse are also gone, seized by police.
But his papers — "the weapons of science," he allegedly called them — still live on the internet, as opioid painkillers proliferate around the globe.
Galofaro, based in Louisville, Kentucky, is an AP national writer who covers the opioid epidemic. She reported in the U.S. and Italy. D'Emilio, based in Rome, reported from Italy. The AP's reporting is funded in part by a grant from the Pulitzer Center on Crisis Reporting.
If you are a doctor, researcher, pharmaceutical employee or resident living outside of the U.S. and have concerns about opioid availability or addiction issues in your country, contact Galofaro at [email protected] or on Twitter at @clairegalofaro