About the largest legal supplier of opioids

Brain

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In the highlands of Tasmania, some 250 miles south of the Australian mainland, narrow paved paths wind in a thin ribbon through a broad river valley bounded by remote mountain cliffs. The two-track paths split apart in grassy pastures, running past bare, skeleton-like trees bleached by sun and drought. All along the way small signs hang on the fences, "Beware! Forbidden Area".

Few would have guessed that these lost areas represent the beginning links of the global opioid supply chain, the starting point for one of the world's largest pharmacological markets.

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I met a farmer named Will Bignell in Botwell, the village where trucks loaded with sheep idle outside the gas station. Bignell, a man in his thirties, with mussed hair and bright green eyes, was something of a willy-nilly farmer. He left his family's farm in the midst of a prolonged drought, moved to Hobart, the capital of Tasmania, and started a family there.

In 2009, Bignell began making hour-long trips to his farm. Instead of raising cattle like a decent farmer, Beignell plowed his pastures and planted his first crop of opium poppies, a special variety specifically designed for pharmaceuticals.

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Bignell had a contract to grow these specialty poppy varieties with Tasmanian Alkaloids (a pharmaceutical company based in Australia) which, until it was sold in 2016, was the only agricultural research project in Johnson & Johnson's vast pharmaceutical empire.

For a while, Tasmanian Alkaloids offered tens of thousands of dollars to farmers. The growers also reported receiving support from such giants as Mercedes-Benzes and BMW to produce medicinal poppy varieties with the highest yields. Bignell began to see how the potential long-term profits from this kind of investment were luring young professionals from mainland Australia back to the island.

If it were just those damn merinoes (a special Australian breed of sheep) and fine fleece, I doubt very much that they would go back to the island. According to Bignell, by working with poppies, farmers could easily provide for their entire family. "You finally get a darn cash payment; that's every farmer's dream" he says.

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After harvesting, the dried poppy plants are processed into a crude extract, and this so-called "narcotic raw material" is transported to production factories. The active compounds found in the poppy, known as "opium alkaloids" are turned into pharmaceutical ingredients, which then become painkillers prescribed to relieve pain.

Manufacturers use the same starting material to synthesize compounds that can be used to reverse opioid overdose and treat addiction, such as naloxone and buprenorphine.

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Tasmania quietly became the world's leading supplier of perfectly legal opioids, at least initially, thanks to a breakthrough in plant breeding. In 1994, chemists modified the opium poppy to produce higher yields of thebaine (paramorphine), the chemical precursor for oxycodone. More importantly, this modification allowed producers in the United States to avoid a long-standing regulatory restriction.

Historian William B. McAllister, author of "The Drug Trade in the Twentieth Century" suggests that thebaine may be an example of "regulatory entrepreneurship" with pharmaceutical companies trying to find ways to circumvent international drug controls to gain market share. "Tasmanian Alkaloids" followed by other firms, was able to ship thebaine quietly despite formal agreements because Drug Enforcement Administration rules regulated morphine imports, but by 2000 thebaine was not yet clearly covered. This drug control regime proved essential to the explosive growth of opioid production and its oversupply in the market over the past 25 years.

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Janssen Pharmaceuticals, Inc. said in a statement that Johnson & Johnson previously owned two subsidiaries, Noramco, Inc. and Tasmanian Alkaloids, which were involved in the production of the active ingredients contained in opioid painkillers. Representatives of Janssen Pharmaceuticals say that this manufacturing process is strictly regulated, and monitored by the DEA (Drug Enforcement Administration - the U.S. Drug Enforcement Administration) and world authorities.

They enforce the regulations and set distribution quotas based on their assessment of the need for drugs containing these substances, and the companies have always complied with these regulations. In a statement, Janssen Pharmaceuticals adds: "We no longer own these subsidiaries, and we do not promote any opioid pain medications in the United States».

Since global drug policy has largely focused on methods of influencing the illicit market, such as campaigns to eradicate poppies and punish people who produce illicit drugs, the legislative side of this production receives disproportionately scant attention.

Kathleen J. Friedl, in "The Drug Wars in America, 1940-1973" writes: "One of the best ways to discipline the illegal market is to regulate the legal market" that is, to implement a policy of deterrence that consists of increased supervision of doctors and pharmacists and includes criminal sanctions for opiate trafficking violations.

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International regulators and the DEA noticed that Tasmanian suppliers were circumventing the original rules, but instead of closing the loophole in the supply law, the DEA did what pharmaceutical lobbyists asked and left the "exit" for oxycodone open.

By 2011, Johnson & Johnson stated in a report to Therapeutic Goods Control Australia that poppies high in thebaine from Tasmanian alkaloids provide 80% of the global market for oxycodone raw material and contribute to the first wave of the overdose crisis. Oxycodone made from Tasmanian-grown thebaine is sold by Purdue Pharma as the brand name product OxyContin.

Today, some drug control experts argue that increased enforcement and safety, combined with efforts to reduce prescriptions for opioid analgesics and prevent diversion of legal pharmaceuticals, are causing many people who use opioids to seek market changes. Experts at the University of California, San Francisco, such as Dan Ciccarone, warn that without a proportional increase in the number of drugs and medications to match actual data on the number of patients using such drugs, this approach will cause people who use opioids to turn to homemade products such as fentanyl and other synthetic substances.

Stefano Berterame, of the secretariat of the International Narcotics Control Board, which tracks supply and demand in the drug market, says that U.S. policy on opioids has permitted the prescribing of such drugs, which has not always been rational.

But the INCB requires the governments concerned to set their own national estimates and traditionally trust U.S. authorities to stamp out the production quotas set by the DEA.
"In the U.S., they have a good understanding of national needs" Stefano says, and we are not in a position to challenge the estimates made by the U.S.

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How Tasmania thwarted legal regulation and turned the opioid economy upside down
Tasmania's surge in the global opioid market is often attributed to the island's location: its remoteness, small population and limited arable land, according to a 1989 U.S. House Foreign Affairs Committee report, bolsters security and imposes natural limits on the expansion of opium cultivation. But Brian Hartnett, former head of Tasmanian Alkaloids, says the real reason the poppies grown for pharmaceutical production began growing on the Antipodes was because of American actions.

"It's really a reflection of U.S. government policy" Hartnett says. U.S. farmers could grow opium poppy, but under the 1961 UN Single Convention on Narcotic Drugs and subsequent international drug control treaties, the U.S. agreed to continue its policy of outsourcing poppy cultivation primarily to so-called "traditional suppliers" originally identified as India, Turkey, Yugoslavia, Afghanistan, Burma, Bulgaria, Iran, Pakistan, Vietnam and the USSR.

In the late 1970s, when government officials in Tasmania were encouraging farmers to move from small experimental plots of their own to so-called "wide-acre" production, Australia, not being on the list of traditional suppliers, created a surplus of drug raw materials that was, as the UN Commission on Narcotic Drugs later determined in a 1989 report, "beyond the legitimate needs of the world."

If U.S. drug makers gave preference to Tasmanian suppliers, it would undermine U.S. treaty obligations, and so in 1981 policymakers implemented what one Tasmanian alkaloid executive called the "infamous 80/20 rule».

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The 80/20 rule requires U.S. producers to import 80 percent of all drugs from India and Turkey, giving these state monopolies free market access. This rule has, in fact, more significant foreign policy goals. It excludes other traditional poppy-growing regions, such as Afghanistan, from the legitimate market for failing to reduce production of illicit drug crops. Moreover, the rule acts as a restriction, leaving only 20% of the U.S. market open to seven transnational corporations exporting raw materials for industry, in Australia, Hungary, Poland, France and until 2008 in the former Yugoslavia (which has since been replaced by Spain), until Tasmania with its thebaine crops appeared.

Since morphine is rather difficult and relatively inexpensive to convert into a class of drugs that includes oxycodone, the 80/20 rule effectively limited the production of thebaine, which in turn limited the production of these so-called semi-synthetic pharmaceutical painkillers.
Then, in 1994, a Tasmanian alkaloid researcher named Tony Fist studied thousands of poppy seeds by placing them in a chemical solution and discovered a mutant poppy plant he called "Norman" (a play on words with "Norman" - no morphine - "no morphine").
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"It was actually kind of lucky" says Fist. The mutant poppy produced thebaine instead of morphine, and, according to Fist, it more than halved the cost of producing oxycodone. Farmers planted the first commercial crop of Norman poppies in 1997, while Purdue Pharma was aggressively ramping up production of OxyContin, its proprietary oxycodone drug.

"If they didn't get thebaine" Fist says, "they wouldn't be able to meet the demand for oxycodone. Opiate exports have not been cut, according to Tasmanian officials. Tebaine has bypassed the 80/20 rule, and as one government official told ABC Radio Australia, "There's no doubt that demand for thebaine will increase, and Americans in particular will take whatever we can produce.»

This is exactly what happened: Between 1993 and 2015, annual total production (according to the DEA, the total amount of opioids produced) tripled. Willem Scholten, a drug control policy consultant in Lopika, the Netherlands, estimates that consumption of the seven commonly prescribed strong Schedule II opioid analgesics, expressed in milligram units of morphine, has increased sevenfold. The oxycodone quota alone has risen from 3.5 tons a year to more than 150 tons. According to the Centers for Disease Control and Prevention, the average dose per person nearly tripled between 1999 and 2015.

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The root causes of addiction are complex, and there are also many social factors. Some addiction specialists suggest that drug use may be a way of escaping physical and psychological trauma, despair and inequality. Patients who are prescribed opioids for long periods of time and in high doses are at risk for physical dependence.

Dramatic changes in supply have led to the illegal use of pharmaceutical drugs such as oxycodone, oxymorphone, and other painkillers. They have become the drugs of choice in many social strata.

By 2001, OxyContin had earned a reputation as "heroin for rednecks." In 2017, the pharmaceutical company Mallinckrodt agreed to pay $35 million to settle a Justice Department lawsuit, whose representatives claimed Mallinckrodt had failed to meet its obligations to detect and notify the DEA of suspiciously large orders of generic OxyContin. Mallinckrodt denies the allegations.

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Back in 1999, a Tasmanian state official said in an interview that U.S. federal regulators had considered closing the loophole and extending the 20 percent limit to reduce tebaine imports from Australia.

"DEA researched the 80/20 rule change" says Christina A. Sunnerud, DEA's scientific consultant, and sent a notice to companies, but then we decided to leave it at that. Along with changes that took decades or more to adopt, such as removing trade barriers and liberalizing pain management, the DEA, under pressure from pharmaceutical companies, abandoned a traditional opioid regulatory tool.

"This decision goes against the very principle, the very idea of drug regulation" says Friedl, an anti-drug historian in the United States. "For the DEA to make this decision makes absolutely no sense in my eyes" he adds. In response to a request, the DEA provided no documentation of the decision to exempt thebaine, though in a 2016 letter from a Canadian firm, the agency reiterated U.S. contractual commitments to support traditional suppliers.

In fact, DEA officials argue that the import quotas for thebaine were justified, based on legitimate need, and that they were enacted in response to a change in prescribing policy.

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After all, the deregulation of the legitimate market and the rapid growth of the illicit opioid black market overflowing with fentanyl have one thing in common: Both have endangered public health in the pursuit of profit.

In 2011, Dan Ciccarone, a University of California, San Francisco researcher who studies opioid market dynamics and is leading a long-term National Institutes of Health-funded study called Heroin in Transition, saw the results firsthand. He flew to Philadelphia on a work trip and almost immediately ran into a man who was on the lookout for opioid drugs. The guy was furious because, as Ciccarone recalls, his doctor had recently stopped prescribing him opioid analgesics.


He immediately called his colleagues and said: "I've just made a discovery that will astound you».

Ciccarone's team talked to dozens of people who had switched to heroin after they couldn't find opioid pills, especially after OxyContin was changed in 2010 to make it harder to crumble and use intranasally. Their study continued in 2012 and coincided with the first wave of the overdose crisis, which was related to prescription painkillers. Then came the second wave - an increase in heroin-related deaths.

Since then, the U.S. has entered a third wave, with fentanyl and illicitly manufactured opioids surpassing heroin in frequency of use, resulting in more than 70,000 fatal overdoses in the U.S. in 2017. Although people who use heroin have preferences, Ciccarone and his colleagues believe that many choose fentanyl unintentionally. Until recently, he says, until supply increased, there was little demand for fentanyl.

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Epilogue
In 2016, SK Capital Partners, a private equity firm, acquired Noramco and Tasmanian Alkaloids, former Johnson & Johnson subsidiaries involved in the opioid supply chain. That same year, Aaron Davenport, SK's managing director, said he viewed Tasmanian Designer Poppies as a critical deterrent to abuse. The terms of sale are confidential, but the firm has not been mentioned in recent state lawsuits filed against companies involved in the opioid supply chain.

In early 2019, Oklahoma's attorney general called Johnson & Johnson "thieves in the law" in lawsuits accusing the company of creating "public nuisance" through deceptive marketing. The lawsuit is expected to last two months. Johnson & Johnson denies any wrongdoing. Lawyers representing the company argue that the public harm statute is being misused, and say the company cannot be held liable for either selling government-regulated products or manufacturing, selling or promoting substances approved by the Food and Drug Administration and manufactured by other companies using their drug raw materials.

"Our actions in promoting these important prescription pain medications were appropriate and responsible" Janssen Pharmaceuticals said in a prepared statement, "The allegations made against our company are untenable and completely without merit. The argument is that drug manufacturers cannot be held liable because regulators have abdicated their responsibilities.

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Meanwhile, the FDA continues to encourage manufacturers to develop drugs that deter opioid abuse. Researchers suggest that the strategy of making prescription opioids more difficult to design changes and tamper with, while sometimes effective, can lead to paradoxical and undesirable results. Continued reliance on regulatory market forces leads the public to believe that existing regulations and restrictions will solve the current crisis.

Back to Botwell, Tasmania. To a village about 3,000 feet above sea level, where no one stayed in touch with his clients on the other side of the world as Will Bignell did: he emitted a signal from a nearby hill and logged on to forums to communicate with his other colleagues. Bignell operated drones over his farm and studied aerial photographs at such high resolution that he could see an individual tire tread, all in an effort to obtain higher doses of drug compounds from his poppy crop.

Poppies were central to Bignell's decision to return to the family farm where he now lives and works. "Live the dream" he tells me when I call him in late 2017. That day, Bignell was just plowing his fields. Over time, it dawned on him that having the means for his livelihood was being questioned. One day he struck up a conversation with a friend in Florida he had met online and asked him:

- Do you grow opium?
- Yes, and I grow a lot of it. I'm one of the biggest suppliers in the world. We supply America, and we supply a lot of it.
- Wow, I don't know what to think about that. You know my sister died of an overdose three years ago?


Then Bignell said to me, "It's very upsetting when you hear things like that." In the background, I could hear the noise of cars. Bignell was driving at a steady pace, turning the soil over for next year's crop. He had no hands on the wheel and was driving on autopilot.

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