Knoxville, Tenn., traces its opioid crisis to a Malvern drug company

Knoxville, a city of about 190,000 people on the Tennessee River with a state university and downtown entertainment district, was a huge market for Endo International’s addictive opioid pain pills.

Almost 1 million more of Endo’s Opana ER tablets were sold in the Knoxville area between 2007 and 2014 than in New York, Los Angeles and Chicago combined.

“Endo likely inflicted more harm on Tennessee than any other state,” Attorney General Herbert H. Slatery III said in a 2019 lawsuit, adding that the Malvern drug company “is substantially responsible for the opioid epidemic in Tennessee.”

Last month, Endo filed for bankruptcy protection, overwhelmed by 3,100 opioid lawsuits, other legal problems, and billions in debt. It’s the third opioid manufacturer to enter bankruptcy court. Purdue Pharma, the OxyContin marketer owned by the Sackler family, and opioid-pill giant Mallinckrodt Inc. already sought protection.

Endo paid CEO Blaise Coleman and three other executives $55.5 million in pre-bankruptcy bonuses in two installments as part of a plan to keep the firm running — bonuses that now don’t sit well in the one-time Opanaland of Appalachian eastern Tennessee.

“They should get nothing. Filing for bankruptcy should be like they are bankrupt. I think all that money should go to rehab and prevention and the victims who they harmed,” said Jessica Akhrass, 42, whose younger brother, Addison Sharp, a University of Tennessee student and former captain of his high school bowling team, overdosed from oxymorphone, the opioid in Opana, in early 2012.

“We were like Opana,” Akhrass recalled. “What is that?”

Grieving and desperate to do something, Akhrass and her mother, Vicki, staked out Knoxville-area pain clinics to gather information on in-state and out-of-state cars and people seeking pills until a police chief told them to stop. David Rausch, the former Knoxville police chief who now heads the state’s investigation bureau, confirmed that he called off Akhrass and her mother for their personal safety.

Endo pulled the highly potent Opana from the market in 2017 after the Food and Drug Administration asked it to because of potential for abuse. Endo says in court documents that Opana accounted for less than 1% of the opioid market. The Washington Post reported in 2019 that Endo manufactured 297 million opioid pills between 2006 and 2012. Nationwide, drug firms manufactured 76 billion opioid pills over that time, Post reported. In addition to Opana, Endo also made and sold less-expensive unbranded generic opioid pills through a subsidiary.

Endo is headquartered in Ireland for tax purposes but runs the U.S. business out of Malvern. The company’s employment is concentrated in the United States and India, where it has manufacturing plants and research.

» READ MORE: Percocet maker Endo details how it manages risks from selling opioids

Endo had no comment for this story. For an Aug. 24 Inquirer story about the executive bonuses, an Endo spokesperson said that “the recent incentive and retention payments are critical to the continuity of Endo’s business during the Chapter 11 proceedings and were approved by Endo’s independent board members.”

“Importantly, up to the whole amount of the performance-based component must be repaid if certain preestablished financial and operational targets are not met in 2022 and 2023,” the statement said. “In addition, the payments are subject to the recipient’s continued employment with Endo over multiple years.”

Knoxville is a crossroads city in Appalachia where two major highways — I-40 and I-75 — converge, a day’s ride from tens of millions of people and convenient for drug users and pain clinics.

Initially, opioid-dispensing pain clinics and pill mill doctors clustered in Florida because of lax drug-prescription laws. An administrative law judge, in a case involving a national drug distributor, quoted a Drug Enforcement Agency official describing Florida as “the pill capital of the world” because of unscrupulous doctors and pharmacists there. But Florida cracked down in 2010 and 2011, leading fly-by-night clinics to relocate to Tennessee, which still had weak regulations over those businesses.

Also by this time, Purdue Pharma had reformulated OxyContin, so that it was harder to abuse, leading drug users to other opioid medications. One was Opana.

“Opana became what we called the holy trinity” in Knoxville — a cocktail of it, Soma and alprazolam, said Rausch, the former Knoxville police chief. This trinity combined the powerful opioid, the muscle relaxer, and benzodiazepine for an elevated high.

Oxymorphone, the addictive ingredient in Opana, ranked fifth for drug-related deaths in the area in 2010, according to data from the Knox County Regional Forensic Center. Higher on the list that year were oxycodone (the active ingredient in OxyContin), followed by alprazolam, morphine and methadone.

In 2011, oxymorphone soared to second on the list for drug-related deaths there and held the second-place ranking in 2014, 2015 and 2016.

“They don’t deserve to exist as a going concern,” said Gerard Stranch IV, the managing partner at the law firm Branstetter, Stranch & Jennings in Nashville. “They’re a dirty company.”

A person who illegally distributes drugs or helps in the illegal dealing can be held liable in court. In June 2017, Stranch sued Endo and other opioid companies under the Tennessee Drug Dealer Liability Act, representing nine counties, 18 municipalities, and Baby Doe, who was exposed to opioids in utero.

Chancellor E.G. Moody of the Circuit Court for Sullivan County ordered Endo to provide information to Stranch in the case — such as e-mails and Tennessee sales rep notes — during the fact-discovery part of the trial. Endo did not comply. According to court documents, Endo produced 400,000 documents only after it was ordered by the judge to do so.

The lawsuit was settled for $35 million in July 2021. Endo did not admit wrongdoing, fault or liability.

» READ MORE: Endo files for bankruptcy with billions in debt

Stranch said he feared at the time of the settlement that Endo would have to file for bankruptcy given its liability.

“It’s offensive that the people that oversaw Endo’s repeated violations of court orders and discovery obligations are rewarded with $55 million in bonuses to encourage them to continue to stay and run Endo,” he said. “I doubt legitimate competitors are breaking down their door to hire these people.”

The lawsuit filed by Tennessee AG Slatery says that 916,513 more Opana ER pills were sold in Knoxville between 2007 and 2014 than were sold in the nation’s three-largest cities, with 82 times the population of Knoxville.

“Endo ramped up its marketing to pill mills in Tennessee to make providers switch from Purdue’s OxyContin to Opana ER following a 2010 change to OxyContin’s formulation that purportedly made OxyContin more resistant to certain forms of abuse,” the Tennessee suit claimed.

Last month, Slatery agreed to settle a multi-state investigation into Endo for $450 million before Endo’s filing for bankruptcy on Aug. 16.

As a legal matter, the bankruptcy halts litigation against the company. Towns, counties, states, health-care groups and individuals that sued Endo are now considered creditors in bankruptcy court. A hearing on Endo’s bankruptcy is scheduled for Sept. 28 in New York.

Samantha H. Fisher, spokeswoman for the Tennessee Office of Attorney General, said the law enforcement agency was “not aware of the [Endo] pre-bankruptcy bonuses and are currently exploring options.” She added that “we would prefer to continue litigating aggressively against Endo but are bound by the constraints that come with a bankruptcy filing.”

Pennsylvania and New Jersey also agreed to the $450 million nationwide deal with Endo that has to be approved through the bankruptcy. “Our office did not approve any bonuses,” a spokeswoman for Pennsylvania Attorney General Josh Shapiro said.

Addison Sharp’s phone contained 40 contacts for drugs, his sister said. He called seven the night he returned from a family vacation to the Bahamas.

When his mother went to his room to wake him the next morning, Jan. 2, 2012, Addison, 22, was dead of an overdose. The Medical Examiner’s report identified the culprit: oxymorphone.

When Sharp died, Akhrass realized that he was the fourth of his friends to succumb to opioids in just a few years.

“Something is very wrong,” she thought at the time.

“When I was at [the University of Tennessee], my friends were not dying,” said Akhrass, who was 10 years older than her brother. “I had no idea what was going on around us. We lived in a bubble. We did not know about these pain clinics.”

Akhrass contacted State Sen. Becky Massey to lobby for tighter regulations on pain clinics and opioid prescriptions. The Addison Sharp Prescription Regulatory Act of 2013 limits opioid prescriptions to 30 days and ends cash payments for opioids and other pills, Akhrass said.

Since the law passed, the number of Tennessee pain clinics has fallen to 115 from 330, said Karen Pershing, the executive director of the nonprofit Metro Drug Coalition in Knoxville.

Sharp’s mother, Vicki, died in 2015. The medical cause was cardiac arrest after an asthma attack, but Akhrass, 42, believes that their mother “pretty much grieved herself to death. She could not get going again” after her son’s death. “She could not find a reason to get up anymore,” Akhrass said.

In 2020, Akhrass published a book, Sincerely, Addison’s Sister, which is partly a story of her brother’s addiction and overdose, and partly about lobbying to pass the law.

She believes Endo executives and those at other opioid companies had to know what was going on.

“Maybe they didn’t know until it got ugly. But there was a point in time they had to know what was happening,” she said. “Greed got in there, and it was unforgivable. You can’t believe that the companies were so blind or stupid. They knew.”