Cardinal Health Lawsuit

COMMONWEALTH OF KENTUCKY
CFA08BDE-833B-4382-A4CB-91FDA808BC68 : 000001 of 000047

JEFFERSON CIRCUIT COURT, DIV. _____
CIVIL ACTION NO. 18-CI-_________
COMMONWEALTH OF KENTUCKY, ex. rel. PLAINTIFF

ANDY BESHEAR, ATTORNEY GENERAL,
v.
CARDINAL HEALTH 5, LLC; CARDINAL DEFENDANTS

HEALTH 100, INC.; CARDINAL HEALTH 108,
LLC; CARDINAL HEALTH 110, LLC;
CARDINAL HEALTH 113, LLC; CARDINAL
HEALTH 132, LLC; CARDINAL HEALTH 200,
LLC; CARDINAL HEALTH 414, LLC:
AND THE HARVARD DRUG COMPANY, LLC,
D/B/A MAJOR PHARMACEUTICALS, D/B/A
RUGBY LABORATORIES
Serve: CT Corporation System

306 W. Main Street, Suite 512
Frankfort, KY 40601
REGISTERED AGENT
COMPLAINT
The Plaintiff, the Commonwealth of Kentucky (“the Commonwealth”), by and through its
duly elected Attorney General, Andy Beshear, for its Complaint against Defendants, Cardinal
Health 5, LLC; Cardinal Health 100, Inc.; Cardinal Health 108, LLC; Cardinal Health 110, LLC;
Cardinal Health 113, LLC; Cardinal Health 132, LLC; Cardinal Health 200, LLC; Cardinal Health
414, LLC; and The Harvard Drug Company, LLC, d/b/a Major Pharmaceuticals, d/b/a Rugby
Laboratories (collectively “Defendant Cardinal”) states a follows:
I. INTRODUCTION
1. This is a public interest lawsuit brought by the Kentucky Attorney General under
Kentucky constitutional, statutory, regulatory and common law authority to recover any and all

damages, restitution, reimbursement, disgorgement, statutory civil penalties, injunctive relief,
and other relief deemed appropriate by the Court from Cardinal as a consequence of its role
fueling the opioid epidemic in the Commonwealth through fraudulent, unfair, false, misleading,
and/or deceptive business practices.
2. The actions of Defendant Cardinal include filling massive and/or “suspicious”
orders, including orders of unusual size, orders deviating substantially from a normal pattern, and
orders of unusual frequency, from Kentucky pharmacies for prescription opioids, shipping and/or
distributing those massive quantities and/or suspicious orders of opioid drugs throughout the
Commonwealth, shipping drugs into the Commonwealth without adequate policies and
procedures in place to detect suspicious orders, failing to report to appropriate authorities such
suspicious orders, and failing to halt such excessive and suspicious shipments. These orders
include orders for such large quantities of prescription narcotic pain medication that there could
be no associated legitimate medical purpose.
3. The prescription drugs in question, opiates, are narcotic drugs derived from or
possessing properties similar to opium and heroin, and are generally categorized as “Schedule II”
drugs due to their high potential for abuse and potential to cause severe psychological or
physiological dependence1. The terms “opioids” and “opioid analgesics” describe the entire class
of natural and synthetic opiates.
4. The Food and Drug Administration (“FDA”) originally approved opioid treatment
1
Codeine, also derived from the opium poppy, is a Schedule III narcotic when in a quantity of less than 90
milligrams per dosage unit. See DEA Drug Schedules https://www.dea.gov/druginfo/ds.shtml (last access February
16, 2018).
2
for short-term post-surgical or trauma-related pain, and for palliative (end-of-life) care.2 Later,

the approved use was extended to reach treatment of patients with “chronic pain,” pain lasting
more than three months.
5. Following the extension of the approved use, the companies who manufactured
and sold this class of drugs in the United States experienced a boon in their business. However,
with this boon came a scourge that infected this country in the form of a public health epidemic
caused by widespread addiction to opioids like OxyContin and Percocet, as well as their generic
forms, oxycodone and hydrocodone. The scourge is now commonly known as the “opioid
epidemic.”3 More of a modern plague, the opioid epidemic continues to mushroom, despite
widespread media attention, many states taking action, and national government response.
6. While there are many purported causes related to the opioid epidemic, this action
is focused solely on the actions of a particular company that was one of the dominant
pharmaceutical wholesalers and market leaders. Defendant Cardinal saturated and flooded the
Commonwealth of Kentucky with excessive amounts of dangerous and addictive prescription
opioids, while disregarding their own real-time data, customer thresholds, internal reports and
common sense. Upon information and belief, Cardinal failed to report red flag, facially
suspicious orders in the Commonwealth and opted instead to reap a windfall off the wave of
addiction.
7. During the creation and inflation of this epidemic, Defendant Cardinal knew or
should have known of the dangerous, addictive qualities, and high rates of loss and
2
Opioid was originally a term denoting synthetic narcotics resembling opiates but increasingly used to refer to both
opiates and synthetic narcotics. Stedman’s Medical Dictionary 27 th Edition.
3
L. Manchikanti et al., Opioid Epidemic in the United States (July 2012)
https://www.ncbi.nlm.nih.gov/pubmed/22786464.
3
misappropriation (“diversion rates”) of the drugs it shipped.

8. Upon information and belief, Defendant Cardinal received millions of dollars per
year for distributing excessive volumes of opioids into Kentucky. Defendant Cardinal, in order
to maintain or increase its profits and market dominance, situated itself to play a significant role
in creating a public nuisance of historic proportions.
9. As set forth below, shipments of massive quantities of opioids into the
Commonwealth by Cardinal, particularly to small sparsely populated rural counties in Eastern
Kentucky, were unfair practices that were suspicious and excessive on their face.
10. As detailed further below, pharmaceutical wholesalers like Cardinal are required
to “know their customers” and set thresholds for each customer’s anticipated order. When
considering both the data available to Cardinal regarding the populations of the towns it shipped
to and the customer thresholds they created based on said data, Cardinal violated several duties
charged by law and by the nature of its industry.
11. Due to Defendant Cardinal’s continued proliferation of dangerous and addictive
prescription opioids, citizens of Kentucky suffered from prescription drug addiction and abuse.
A reasonably foreseeable result of this widespread addiction was patients’ transitioning their use
and abuse of prescription opioids to illegal street drugs like heroin and carfentanil. The
foreseeable results of Defendant Cardinal’s actions include loss of jobs and productivity, loss of
health and enjoyment of life, increased financial burdens to the Commonwealth to respond to the
devastation caused by the wave of addiction and, most tragically, the lost lives of thousands of
Kentuckians.4 Sadly, in 2015 Kentucky had the third highest drug overdose death rate, behind
4
See Nora D. Volkow, M.D. and A. Thomas McLellan, Ph.D., Opioid Abuse in Chronic Pain – Misconceptions and
Mitigation Strategies, NEW ENG. J. MED., 374;1253-63 (March 31, 2016).
4
only West Virginia and New Hampshire.5 Even worse, in 2016 the Kentucky Office of Drug

Control Policy reported 1,404 overdose deaths.6
12. The citizens of Kentucky are left in the wake of this wrongful and illegal conduct,
spread out among our many small towns and cities, endeavoring to restore order and put an end
to this public health crisis in the face of wave after wave of excessive opioid distribution.
13. The Commonwealth’s response to the health emergency created by Defendant
Cardinal includes, but is not limited to, providing or reimbursing for medical treatment;
shouldering the increased financial burden of public health insurance; dispatching emergency
services; investigating and prosecuting drug-related crimes; incarcerating perpetrators;
supervising and rehabilitating the addicted; preventing, investigating, and treating overdoses;
providing foster care for children whose parents are in prison or dead from overdosing, or simply
cannot care for them due to addiction; assembling necessary response teams; and tending to the
infirm, dying, and dead.
14. The Kentucky Medicaid program alone has paid millions of dollars for medically
unnecessary prescriber visits and improper prescriptions as well as addiction treatment and
services, including emergency room admissions, inpatient hospitalizations, drug treatment,
rehabilitation services, hepatitis treatments, and a multitude of other adverse consequences of
addiction afflicting Kentucky Medicaid recipients who became addicted to the controlled
substances that Defendant Cardinal excessively distributed in the Commonwealth.
15. This action is therefore brought on behalf of the Commonwealth to: 1) stop
5
Rate per 100,000 population age-adjusted to the 2000 U.S. standard population using the vintage 2015 population.
Source: National Vital Statistics System, Mortality File, CDC WONDER.
6
See Commonwealth of Kentucky Justice & Public Safety Cabinet 2016 Overdose Fatality Report, 2
https://odcp.ky.gov/Documents/2016%20ODCP%20Overdose%20Fatality%20Report%20Final.pdf.
5
Defendant Cardinal from fulfilling suspicious orders for opioids; 2) recover the damages suffered

by Kentucky and its citizens; 3) recoup the expenses, penalties owed, and disgorge the amounts
Defendant Cardinal unjustly enriched itself with; and, perhaps most importantly, 4) to enjoin and
abate the continuing public nuisance caused in whole or in part, by the actions of Defendant
Cardinal and force them to help solve the problem they both created and willingly profited from.
II. PARTIES
16. Plaintiff is the Commonwealth of Kentucky, by and through its agent, Attorney
General Andy Beshear, who is granted the right and duty under law to prosecute actions for abuse
of public funds and torts harming the citizens of this state. The Commonwealth of Kentucky is
and was a sovereign State and is a body politic created by the Kentucky Constitution and laws of
the Commonwealth of Kentucky and, as such, is not a citizen of any State.
17. The Attorney General is the proper party to take action against Defendant for breach
of state law and regulation. Andy Beshear is and was the duly elected Attorney General of
Kentucky, an independent constitutional officer of the Commonwealth and its chief law
enforcement officer, with full authority to initiate and prosecute cases, including this action, in
which the Commonwealth has an interest. The Attorney General is vested with specific
constitutional, statutory and common law authority to commence proceedings to enforce KRS
194A.505, KRS 205.8451 through KRS 205.8483, KRS 218A.240, KRS 315.235, KRS 367.170
et seq., to initiate actions necessary to guard against unauthorized demands against the Treasury
of the Commonwealth, to exercise all common law duties and authority pertaining to the office of
the Attorney General under the common law pursuant to KRS 15.020, and pursuant to the Attorney
General's parens patriae authority, to bring an action on behalf of the Commonwealth, its
6
departments and agencies, and its citizens. The Attorney General has determined that these

proceedings are in the public interest.
Cardinal Health Defendants
18. Defendants Cardinal Health 100, Inc. is a for-profit Ohio Corporation registered to
do business in the Commonwealth Kentucky. Their principal place of business is 7000 Cardinal
Place, Dublin, Ohio 43017.
19. Cardinal Health 113, LLC is a for-profit Wisconsin limited liability company
registered to do business in the Commonwealth Kentucky. Their principal place of business is
7000 Cardinal Place, Dublin, Ohio 43017.
20. Cardinal Health 110, LLC; Cardinal Health 108, LLC; Cardinal Health 200, LLC;
Cardinal Health 5, LLC; and Cardinal Health 414, LLC are for-profit Ohio limited liability
companies registered to do business in the Commonwealth Kentucky. Their principal place of
business is 7000 Cardinal Place, Dublin, Ohio 43017.
21. Cardinal Health 132, LLC, is a for-profit Delaware limited liability company with
its principal place of business at 1330 Enclave Parkway, Houston, Texas 77077. It is registered to
do business with the Kentucky Secretary of State.
22. The Harvard Drug Company, LLC, is a for-profit Michigan limited liability
company with its principal place of business at 31778 Enterprise Drive, Livonia, Michigan 48150.
The Harvard Drug Company, LLC, became a subsidiary of Cardinal Health, Inc., in 2015.
23. Each Defendant’s registered agent is CT Corporation System, 306 W. Main Street
Suite 512, Frankfort, KY 40601.
24. These Defendants are referred to collectively herein as “Defendant Cardinal.”
7
25. Specifically, Defendant Cardinal distributes pharmaceuticals to retail pharmacy

operations, as well as institutional providers like hospitals and county health departments. Cardinal
is the third largest pharmaceutical distributor in North America. Upon information and belief,
Defendant distributed oxycodone and hydrocodone, among other opioids, in the Commonwealth
of Kentucky between January 1, 2007, and December 31, 2016.
26. Upon information and belief, Defendant Cardinal maintained licensure through the
Commonwealth of Kentucky for the wholesale distribution of controlled substances pursuant to
multiple regulations, including the Kentucky Controlled Substances Act.
27. Kentucky law mandates that all drug distributors, including Defendant Cardinal,
apply for and receive a license from the Kentucky Board of Pharmacy. KRS 315.402. Additionally,
wholesale distributors of controlled substances, including Defendant Cardinal, must apply for and
receive a license from the Kentucky Cabinet for Health and Family Services. KRS 218A.150.
Continuing licensure is dependent upon compliance with laws and regulations relating to
controlled substances. KRS 218A.160(1)(a), 201 KAR 2:105 Section 3(2)(a), 902 KAR 55.010,
KRS 218A.240, and 21 U.S.C. § 823.
III. JURISDICTION AND VENUE
28. The Jefferson Circuit Court has personal jurisdiction over Defendant, as
Defendant purposefully availed itself of this forum by conducting business in the Commonwealth
and by causing harm as a direct and proximate result of its actions. Defendant Cardinal has and
does transact business from its Louisville locations, and/or solicited business in the
Commonwealth, and/or derived substantial revenue from goods used or consumed or services
rendered in the Commonwealth, and/or contracted to supply good or services in the
Commonwealth, and/or caused tortious injury by an act or omission in the Commonwealth,
8
and/or caused tortious injury in the Commonwealth by an act or omission outside the

Commonwealth. Defendant has the requisite minimum contacts with Kentucky necessary to
permit this Court to exercise jurisdiction. Defendant has designated a registered agent for service
of process and otherwise consented to the jurisdiction of Kentucky courts.
29. Jefferson Circuit Court has subject matter jurisdiction over the claims submitted
pursuant to KRS 15.060, KRS 23A.010, KRS 194A.505(8), KRS 205.8469, KRS 315.235, and
KRS 367.190 as the claims enumerated herein arise exclusively under Kentucky statutory and
common law and from the parens patriae authority of the Attorney General to act on behalf of
the Commonwealth of Kentucky and its citizens. The Commonwealth’s claims are in excess of
any minimum dollar amount necessary to establish the jurisdiction of the Court.
30. Plaintiff does not plead any cause of action or request any remedy arising under
or founded in federal law. The instant Complaint does not confer diversity jurisdiction upon the
federal courts pursuant to 28 U.S.C. § 1332, as the Commonwealth is not a citizen of any state
and this action is not subject to the jurisdiction of the Class Action Fairness Act of 2005.
31. Likewise, federal question subject matter jurisdiction pursuant to 28 U.S.C. § 1331
is not invoked by the Complaint, as it sets forth herein exclusively viable state law claims against
Defendant. Nowhere herein does Plaintiff plead, expressly or implicitly, any cause of action or
request any remedy that arises under federal law. The issues presented in the allegations of this
Complaint do not implicate any substantial federal issues and do not turn on the necessary
interpretation of federal law. No federal issue is important to the federal system as a whole under
the criteria set by the Supreme Court in Gunn v. Minton, 568 U.S. 251 (2013).
32. Specifically, the causes of action asserted, and the remedies sought herein, are
founded upon the positive statutory, common, and decisional laws of Kentucky. Further, the
9
assertion of federal jurisdiction over the claims made herein would improperly disturb the

congressionally approved balance of federal and state responsibilities. Accordingly, any exercise
of federal jurisdiction is without basis in law or fact.
33. In this Complaint, Plaintiff cites or alludes to federal statutes, regulations or
agency memoranda. Plaintiff does so only to establish Defendant’s knowledge, state the duty
owed under Kentucky law, or to explain the hybrid nature of industry oversight, not to allege an
independent federal cause of action and not to allege any substantial federal question under Gunn
v. Minton, supra.
34. Venue is appropriate in Jefferson Circuit Court under KRS 452.460, which allows
venue in the county where the injury was suffered, and under KRS 452.450, which allows venue
in the county in which the business is situated.
IV. THE MEDICAID PROGRAM
35. The Medicaid Program (“Medicaid”) operates under Title XIX of the Social
Security Act. Medicaid is a cooperative venture between the Federal and State governments to
assist States in the provision of adequate medical care to its most vulnerable citizens, including
the poor, the disabled, the elderly, the blind, pregnant women, infants and dependent children.
36. Within broad federal statutory and regulatory guidelines a State: (a) establishes its
own eligibility standards; (b) determines the type, amount, duration, and scope of services; (c)
sets the rate of payment for services; and (d) administers its own program. The Medicaid program
is administered at the federal level by the United States Department for Health and Human
Services, Centers for Medicare and Medicaid Services (“CMS”).
37. The Department for Medicaid Services (“Kentucky Medicaid”) is the single state
agency charged with the administration of the Kentucky Medicaid program pursuant to Title XIX
10
of the Federal Social Security Act. 42 U.S.C. 1396a(a)(5), 42 C.F.R. § 431.10. 42 C.F.R. § 100,

KRS 12.020 (II)(8)(k), KRS 194A.030(2), Chapter 205 of the Kentucky Revised Statutes, Title
907 of the Kentucky Administrative Regulations and other applicable law.
38. Upon information and belief, Kentucky Medicaid, among other State agencies,
has paid and continues to pay substantial sums for the costs associated with treatment and services
provided to opioid-addicted Medicaid beneficiaries whose addiction was created by availability
and access to diverted drugs which were distributed in whole or in part by Cardinal.
V. FACTUAL BACKGROUND
39. The opioid epidemic in America is unparalleled. On August 10, 2017, the
President declared America’s opioid crisis to be a national emergency. According to the Centers
for Disease Control (“CDC”), the most recent data estimates that 142 Americans die every day
from a drug overdose. Drug overdoses now kill more people than gun homicides and car crashes
combined. Between 1999 and 2015, more than 560,000 people in this country died due to drug
overdoses. Approximately 6 out of 10 drug overdose deaths are caused by opioids.7
40. Opioids are the prime contributor to the addiction and overdose crisis. In 2015,
nearly two-thirds of drug overdoses were linked to opioids like Percocet, OxyContin, heroin, and
fentanyl. Americans consume more opioids than any other country in the world. In 2015, the
amount of opioids prescribed in the United States was enough for every American to be medicated
around the clock for three weeks.8
41. Additionally, the Substance Abuse and Mental Health Services Administration
7
Letter from President’s Commission on Combating Drug Addiction and the Opioid Crisis to the President of the
United States (Nov. 1, 2017),
https://www.whitehouse.gov/sites/whitehouse.gov/files/images/Final_Report_Draft_11-1-2017.pdf.
8
Id.
11
(“SAMHSA”) Center for Behavioral Health and Statistics Quality (“CBHSQ”) reports that four

out of every five new heroin users begin with prescription opioids.9
42. The reality for states like Ohio, West Virginia, and Kentucky is, incredibly, much
worse. Kentucky’s overdose fatalities, already high, increased dramatically in 2015. Overdose
deaths of Kentucky residents, regardless of where the death occurred, and non-residents who died
in Kentucky, numbered 1,248 in 201510, topping the already unacceptable 1,087 overdose deaths
in 2014.11 In 2015, drug overdoses accounted for 51.17% of Kentucky’s statewide accidental
deaths, more than motor vehicle accidents, fire, drowning and gunshot wounds combined. In
2015, opioids accounted for 46.63% of the statewide total of drug related fatal overdose victims.12
A. OPIOIDS ARE SCHEDULE II, HIGHLY ADDICTIVE DRUGS, KNOWN TO

CAUSE USERS TO DEVELOP DRUG SEEKING BEHAVIORS.
43. Opioids—once a niche drug—are now the most prescribed class of drugs, above
even blood pressure medicine. While Americans represent only 4.6% of the world’s population,
they consume 80% of the opioids supplied around the world and 99% of the global hydrocodone
supply. In 2012, opioids generated a combined $8 billion in revenue for drug companies; this
revenue exceeded $15 billion in 2016. The cost of the country’s opioid crisis is estimated to have
exceeded $1 trillion from 2001 to 2017, and is projected to cost an additional $500 billion by
2020.13
44. Prescription opioids bind to receptors on the spinal cord and in the brain,
9
See Id. See also Ctrs. for Disease Control and Prevention, U.S. Dep’t of Health and Human Servs., Today’s
Heroin Epidemic, https://www.cdc.gov/vitalsigns/heroin/index.html (last accessed Feb. 15, 2018).
10
2015 Overdose Fatality Report, Kentucky Office of Drug Control Policy
https://odcp.ky.gov/Documents/2016%20ODCP%20Overdose%20Fatality%20Report%20Final.pdf.
11
Id.
12
2015 Annual Report, Office of the Kentucky State Medical Examiner
https://odcp.ky.gov/Reports/2016%20annual%20report.pdf.
13
See Wilson Hyan, The Potential Societal Benefit of Eliminating Opioid Overdoses, Deaths, and
Substance Use Disorders Exceeds $95 Billion Per Year, Altarum Center for Value in Health Care (2017).
12
dampening the perception of pain. Like heroin, opioids can create a euphoric high, and thereby

possess addictive qualities. At certain doses, opioids can slow the user’s breathing, causing
respiratory depression and, ultimately, death. With prolonged use, a patient’s tolerance increases,
causing a correlating increased need in dose amounts and frequency of administration or use. The
increased tolerance also increases the risk of significant side effects and addiction rate as well as
decreases the effectiveness of patient weaning.
45. According to the CDC, the percentage of heroin users who also use opioid pain
relievers rose from 20.7% between 2002 and 2004 to 45.2% between 2011 and 2013. More
current studies cement the connection between heroin and prescription opioids.14
46. Dr. Robert DuPont, former director of the National Institute on Drug Abuse and
the former White House drug czar, opines that opioids are more destructive than crack cocaine:
“[Opioid abuse] is building more slowly, but it’s much larger. And
the potential[] for death, in particular, [is] way beyond anything we
saw then. . . . [F]or pain medicine, a one-day dose can be sold on the
black market for $100. And a single dose can [be] lethal to a non-
patient. There is no other medicine that has those characteristics.
And if you think about that combination and the millions of people
who are using these medicines, you get some idea of the exposure
of the society to the prescription drug problem.”15
B. THE ROLE OF PHARMACEUTICAL DISTRIBUTORS
47. Rather than drug manufacturers selling opioids directly to physicians or
pharmacies for ultimate dispensing, a sophisticated, closed distribution system exists to push the
14
See Wilson M. Compton, Relationship Between Nonmedical Prescription-Opioid Use and
Heroin, 374 N. Eng. J. Med. 154 (2016), Ctrs. for Disease Control and Prevention, MMWR Report
(March 17, 2017) https://www.cdc.gov/mmwr/volumes/66/wr/mm6610a1.htm?s_cid=mm6610a1_w.
15
Transcript, Use and Abuse of Prescription Painkillers, The Diane Rehm Show (Apr. 21, 2011), at
http://thedianerehmshow.org/shows/2011-04-21/use-and-abuse-prescription-painkillers/transcript.
13
drugs across the nation.16 This sophisticated system, born out of an acknowledgement by

Congress that greater control was needed over abused and addictive prescription drugs, is
intended to track and account for controlled substances from manufacturing to the ultimate
consumer. 17
48. For many important reasons, this system relies upon the honesty, integrity, and
accountability of prescription drug distributors to be effective. This “closed” chain of
distribution was specifically designed by Congress to prevent the diversion and abuse that is
complained of herein.
49. States, including Kentucky, enacted similar state laws, rules and regulations in
order to regulate the distribution of drugs and provide oversight over this unique industry. The
Kentucky General Assembly determined and declared that “[t]he regulation of controlled
substances in this Commonwealth is important and necessary for the preservation of public safety
and public health…” KRS 218A.005(1).
50. This closed-system of state and federal authority imposes specific duties upon
wholesale distributors to monitor, identify, halt and, perhaps most importantly, report suspicious
orders of controlled substances. 21 C.F.R. § 1301.74; Masters Pharm., Inc. v. Drug Enf't Admin.,
861 F.3d 206 (D.C. Cir. 2017). All registrants of the closed distribution system “must adhere to
specific security, recordkeeping, monitoring, and reporting requirements that are designed to
identify or prevent diversion.18 The end purpose of these laws is to protect the consuming public.
16
Statement of Joseph T. Rannazzasi, Deputy Assistant Administrator, Drug Enforcement Agency to the
Department of Justice Before the Caucus on International Narcotics Control, United States Senate (July
18, 2012) http://docs.house.gov/meetings/IF/IF14/20140407/102093/HHRG-113-IF14-Wstate-
RannazzisiJ-20140407.pdf.
17
Id.
18
Id.
14
51. Pharmaceutical distributors such as Defendant Cardinal are one of the key

components of this closed distribution chain. The role of the pharmaceutical distributor is not
simply one of shelf stocker, freight forwarder, or simple shipper. If the closed system is to
function properly, distributors must be vigilant in deciding whether a prospective customer can
be trusted to deliver controlled substances only for lawful purposes.
52. To piggyback on the state and federal regulatory schemes, distributors created a
system of “self-regulation and best practice sharing” through an industry trade group called the
Healthcare Distribution Alliance (HDA), formerly known as the Healthcare Distribution
Management Association. According to the HDA, “[h]ealthcare distribution has never been just
about delivery. It’s about getting the right medicines to the right patients at the right time, safely
and efficiently.”19
53. The HDA created “Industry Compliance Guidelines” that stressed the critical role
of each member of the supply chain in distributing controlled substances. These industry
guidelines provided: “At the center of a sophisticated supply chain, Distributors are uniquely
situated to perform due diligence in order to help support the security of controlled substances
they deliver to their customers.” Indeed, the HDA advises all distributors to “Know Your
Customer.”
54. As a dominant player within the healthcare distribution industry, senior executives
from Cardinal historically served on the board of the HDA. The CEO of Cardinal’s Medical
Segment, Jon Giacomin, is currently the chairman of the HDA board of directors and a member
of the executive committee of the HAD. Craig Cowman, Cardinal’s Executive Vice President of
19
See Healthcare Distribution Alliance, Role of Distributors http://www.hdma.net/about/role-of-
distributors (last access February 15, 2018).
15
Global Sourcing, also serves on the HDA’s board of directors. Mike Kaufman, Cardinal’s current

CEO, is a former member of the executive committee of this powerful trade group.
55. Distributors, specifically including Defendant Cardinal, are required to establish
expected order thresholds for each customer. These thresholds are vital data points used to
determine whether prospective orders are unusual in size, deviate from a prior pattern or are
unusual in their frequency.
56. In order to fulfill their obligations under federal and state laws as well as self-
regulation, distributors, specifically including Defendant Cardinal, use highly advanced data
collection and analytical systems. These sophisticated software systems monitor the inventory
and ordering needs of customers in real-time.
57. Upon information and belief, Defendant Cardinal, by virtue of its data analytics
and “know your customer” initiatives, was actually aware of the extent of numerous suspicious
orders, but failed to report or halt shipment of them. Further, Defendant Cardinal was aware that
several of their pharmacy customers had indicia of suspicion for diversion or misuse such as (1)
individuals traveling long distances to fill prescriptions; (2) prescriptions for drug “cocktails,”
known for their abuse potential, such as oxycodone and Xanax; (3) individuals who arrived
together with identical or nearly identical prescriptions; (4) purported pain patients with
prescriptions for immediate-release rather than long-acting narcotics; (5) high percentage of cash
purchases; and (6) doctors prescribing outside the scope of their usual practice.
C. CARDINAL CAUSED OR CONTRIBUTED TO THE OPIOID EPIDEMIC IN

KENTUCKY BY OVERSATURATING THE PHARMACEUTICAL MARKET IN
FILLING SUSPICIOUS AND FRAUDULENT ORDERS AND FAILING TO
REPORT OR HALT THE SAME.
58. The data collected by distributors and reported to government regulators is often
16
reported in terms of drug dosage or doses. A dose is the amount of active ingredient in a particular

pill or capsule.
59. Per “The Flow of Money Through the Pharmaceutical Distribution System”
published by the Leonard D. Schaeffer Center for Health Policy & Economics at the University
of California, (June, 2017), Cardinal boasted a 20.7% share of the prescription opioid market.
60. In only 12 months, from February 1, 2016, to January 31, 2017, pharmacies in the
Commonwealth filled prescriptions for 307,234,816 doses of Schedule II prescription drugs,
which breaks down to 69 doses of Schedule II narcotics for every man, woman, and child in the
Commonwealth. Market share analysis indicates that of those, Cardinal distributed 63,597,606
doses.
61. From January 1, 2010, through December 31, 2016, Jefferson County, Kentucky,
had an average population of approximately 755,305. Pharmacies located in Jefferson County
filled prescriptions for a total of 388,652,108 doses of opioid narcotic drugs in Jefferson County
alone. With a 20.7% market share, Defendant Cardinal would have contributed 1,186,418 of
those doses. From 2012 through 2016, Jefferson County experienced 1,066 prescription drug
overdose deaths.
62. From January 1, 2010, through December 31, 2016, Floyd County, Kentucky, had
an average population of 38,638. Pharmacies located in Floyd County filled prescriptions for a
total of 56,375,642 doses of opioid narcotic drugs. With a 20.7% market share, Defendant
Cardinal would have contributed 11,669,757 of those doses, 302 per resident. From 2012 through
2016, Floyd County experienced 89 prescription drug overdose deaths.
63. From January 1, 2010, through December 31, 2016, Bell County, Kentucky, had
an average population of 27,961. Pharmacies located in Bell County filled prescriptions for a total
17
of 30,091,681 doses of opioid narcotic drugs. With a 20.7% market share, Defendant Cardinal

would have contributed 6,228,977 of those doses, 222 per resident. From 2012 through 2016,
Bell County experienced 81 prescription drug overdose deaths.
64. From January 1, 2010, through December 31, 2016, Clay County, Kentucky, had
an average population of 21,047. Pharmacies located in Clay County filled prescriptions for a
total of 25,429,897 doses of opioid narcotic drugs. With a 20.7% market share, Defendant
Cardinal would have contributed 5,263,988.68 of those doses, 245 per resident. From 2012
through 2016, Clay County experienced 28 prescription drug overdose deaths.
65. These figures are only a snapshot of the gross amount of opioid narcotic doses per
county and per person distributed in part by Defendant Cardinal, solely in the Commonwealth of
Kentucky. Upon information and belief, the statistics for county-by-county prescription volume
for controlled substances for the preceding years, especially for those years preceding the
enactment of House Bill 1 in 2012, are substantially higher and more egregious.
66. The amounts of pills shipped or delivered by Defendant Cardinal to Kentucky was
and is unreasonable, dangerous, and facially suspicious.
67. With the systems and technology used by Defendant Cardinal to collect and
analyze robust data, Defendant had access to information reflecting the full extent of their lethal
over-shipments in Kentucky. Rather than taking steps to protect the end customer from the
massive volume of dangerous and addictive drugs, Cardinal instead chose to pump addictive pill
after addictive pill into the Commonwealth.
68. In its position as an opioid distributor, Defendant Cardinal knew or should have
known of Kentucky’s exceedingly high rate of suspicious shipments, and a correlating risk of
abuse, misuse, and diversion of prescription opioids. Indeed, the shipments mentioned above, and
18
others, constitute facially suspicious orders to disproportionately small markets. Numerous

publications, news sources and studies highlighted the epidemic rate of opioid abuse and overdose
rates in Kentucky.
69. Defendant Cardinal knew, or should have known, that many of the controlled
substances that it was providing to customers in the Commonwealth were being obtained through
fraudulent prescriptions from physicians who were prescribing controlled substances for
illegitimate medical purposes.
70. Defendant Cardinal knew, or should have known, it was supplying “pill-mill”
pharmacies in the Commonwealth.
71. Defendant Cardinal was on notice of the “suspicious orders” it was receiving when
it shipped massive quantities of controlled substances to pharmacies in areas that lacked the
population dynamics to support the claimed need. Defendant Cardinal shipped these highly
addictive prescription opioids to pharmacies in the Commonwealth located in sparsely populated
areas in such quantities that it knew, or should have known, the drugs were being diverted for
illegal use.
72. Further, Defendant Cardinal had a duty, known to Defendant Cardinal by way of
the licensure practices in Kentucky, to report diversion of controlled substances. Specifically,
wholesalers of controlled substances must apply for a license or renewal of license to operate in
Kentucky through the Cabinet for Health and Family Services Office of Inspector General, Drug
Enforcement and Professional Practices Branch (“DEPPB”) The DEPPB administers and
enforces the Kentucky Controlled Substances Act and grants renewals of licenses of wholesalers
of controlled substances in part by relying on the information provided by the applicant.
73. To maintain a Kentucky wholesaler’s license, entities are required to comply with
19
rules regarding controlled substance diversion controls. Additionally, at the time of initial

application or renewal, “the Cabinet for Health Services shall be notified in the event of any theft
of other loss of controlled substances. Any problem, such as pilferage, which develops in a
facility, must also be reported.”20 Directly below this instructive paragraph is a paragraph stating
“I hereby certify that all answers given in this application are true, complete and correct and I
understand that any license issued to me by the Cabinet for Health Services may be suspended or
revoked for cause,” with a signature line directly below.
74. Similarly, to maintain a distributor’s license in Kentucky, the Kentucky Board of
Pharmacy requires licensed entities to comply with both state and federal law, including rules
preventing the diversion of controlled substances. Pursuant to KRS 315.402, failure to report to
the board or willful submission of inaccurate information shall be grounds for disciplinary action,
including fines, suspension, or revocation of the wholesaler’s license at issue. In addition, the
Kentucky Board of Pharmacy requires initial and renewal applications for License to Operate as
a Wholesale Distributor. These applications require acknowledgment of whether an applicant,
owner, partner, officer, agent, or employee has (1) been convicted of any felony, (2) had a
wholesale distributor license or permit revoked or suspended, and (3) been convicted under laws
relating to drug samples and wholesale or retail drug distribution of controlled substances.21
75. Defendant Cardinal acknowledged this language with each application for license
20
Application for License Renewal as a Manufacturer or Wholesaler of Controlled Substances (May
2017), http://www.chfs.ky.gov/NR/rdonlyres/7F58922D-B496-45A3-B12B-
B33BE9727ADB/0/DEPPBCSLicenseRenewalForm05172017.pdf, Application for a New License as a
Manufacturer or Wholesaler of Controlled Substances (May 2017)
http://www.chfs.ky.gov/NR/rdonlyres/3063B7E3-9B49-4569-94EF-
777AFA4F2624/0/DEPPBCSNewLicenseApplicationForm05172017.pdf .
21
Application for License to Operate as a Wholesale Distributor,
https://pharmacy.ky.gov/Businesses/Wholesale%20Distributor%20License%20Documents/Wholesale%2
0Distributor%20License%20Application.pdf (last accessed Feb. 16, 2018).
20
renewal and made sworn representations regarding the same.

76. Despite an existing duty to the consuming public and both federal and Kentucky
law requiring procedural safeguards against diversion of controlled substances, Defendant
Cardinal failed to take any action to effectively prevent, minimize, or reduce the distribution or
availability of these dangerous drugs.
77. Defendant Cardinal had a legal duty to ensure they were not filling suspicious
orders that should have simply been refused. However, despite the existence of suspicious orders,
and the information available regarding the same through Defendant Cardinal’s own
sophisticated tracking system, Defendant did not refuse to ship or supply the often abused and
highly addictive prescription opioids to Kentucky pharmacies, between 2010 and the present.
78. Additionally, Defendant Cardinal knowingly failed to report suspicious orders in
Kentucky from 2010 to the present. This business practice was and is unfair and unconscionable,
deceptive, and/or misleading.
79. In fact, Defendant Cardinal admitted to similar wrongdoing in both 200822 and
2012.23 Specifically, Defendant Cardinal failed to heed warnings by DEA officials in 2005
regarding excessive sales of their product to pharmacies filling illegal online prescriptions. In
2008, the company was penalized for satisfying orders placed to fill prescriptions that were not
issued for any legitimate medical purpose.24
22
Dpt. of Justice Release, Cardinal Health Inc., Agrees To Pay $34 Million To Settle Claims That It
Failed To Report Suspicious Sales Of Widely-Abused Controlled Substances (October 2, 2008)
https://www.justice.gov/archive/usao/co/news/2008/October08/10_2_08.html
23
Drug Enforcement Agency Release, DEA Suspends for Two Years Pharmaceutical Wholesale
Distributor’s Ability to Sell Controlled Substances from Lakeland, Florida Facility (May 15, 2012)
https://www.dea.gov/pubs/pressrel/pr051512.html
24
Cardinal Health Inc., Agrees To Pay $34 Million To Settle Claims That It Failed To Report Suspicious
Sales Of Widely-Abused Controlled Substances.
21
80. Defendant Cardinal’s wrongdoings were neither halted nor deterred from these

penalties, however, as in 2012, Defendant Cardinal admitted to “Failure to maintain effective
controls against the diversion of controlled substances” and “Failure to detect and report
suspicious orders of controlled substances.”25 The violations resulted in a two-year suspension of
distribution of pharmaceutical drugs from Defendant Cardinal’s Lakeland, Florida facility.
81. In 2016 it reached another “Nationwide Civil Penalty Settlement” of $44 million.
This penalty stemmed from the 2012 behavior addressed by the DEA.26
82. Defendant Cardinal’s intentional distribution of enormous quantities of
prescription opioids throughout Kentucky’s small rural communities and towns showed a
reckless disregard for the health and safety of Kentucky’s citizens.
83. Defendant Cardinal played a key part in the creation, proliferation, and
continuation of the opioid epidemic and the resulting and continuing catastrophic damage in the
Commonwealth of Kentucky.
84. Specifically, Defendant Cardinal shipped millions of doses of highly addictive
controlled painkillers into Kentucky, many of which should have been stopped and/or
investigated as suspicious orders. This business practice was and is unfair and unconscionable,
deceptive, and/or misleading.
85. The CDC identified Kentucky as having a statistically significant drug overdose
25
DEA Suspends for Two Years Pharmaceutical Wholesale Distributor’s Ability to Sell Controlled
Substances from Lakeland, Florida Facility.
26
Dpt. of Justice Release, United States Reaches $34 Million Settlement With Cardinal Health For Civil
Penalties Under The Controlled Substances Act (Dec. 23, 2016) https://www.justice.gov/usao-
mdfl/pr/united-states-reaches-34-million-settlement-cardinal-health-civil-penalties-under.
22
death rate increase from 2014 to 2015.27 According to the CDC, Kentucky has the third highest

opioid-related overdose rate in the country. Data from 2013 onward shows that Kentucky has the
third highest drug overdose mortality rate in the country.28
86. Kentucky has been devastated by the opioid epidemic and the epidemic has not
abated. Jefferson County, Kentucky reported 364 overdose deaths in 2016, almost one per day,
up from 268 in 2015.29
87. Kentucky has one of the highest rates of prescriptions for opioids in the nation.30
These statistics reflect the fact that Kentucky is one of the top states for over-shipment of opioids
by Defendant Cardinal. The overall national opioid prescribing rate declined from 2012 to 2016,
and in 2016, the prescribing rate had fallen to the lowest it had been in more than a decade at 66.5
prescriptions per 100 persons (over 214 million total opioid prescriptions). However, in 2016 52
of Kentucky’s 120 counties had an opioid prescription rate higher than 100 prescriptions per 100
persons, eight (8) of which had a rate in excess of 200 prescriptions per 100 persons. 31 Experts
agree that this problem must be tackled head on and at the source, that being the distributors who
flooded the market.32
88. Upon information and belief, Defendant Cardinal failed to maintain effective
27
Drug Overdose Death Data, Centers for Disease Control,
https://www.cdc.gov/drugoverdose/data/statedeaths.html (last visited October 22, 2017).
28
See http://www.healthyamericans.org/reports/drugabuse2013/release.php?stateid=KY (last accessed on
October 21, 2017).
29
See Commonwealth of Kentucky, Justice & Public Safety Cabinet, Kentucky Office of Drug Policy
2016 Overdose Fatality Report, available at: https://odcp.ky.gov/Reports/2016%20ODCP%20
Overdose%20Fatality%20Report%20Final.pdf; (last visited October 22, 2017).
30
http://www.bgdailynews.com/news/kentucky-in-top-states-in-painkiller-
prescriptions/article_0d8d0555-47e1-5717-b042-e3d53e7f3ee2.html (7/12/14) (last accessed on October
22, 2017)
31
https://www.cdc.gov/drugoverdose/maps/rxcounty2016.html
32
See http://kentuckytoday.com/stories/prescription-drug-epidemic-must-be-tackled-head-on,6966
(3/32/17) (last visited October 21, 2017).
23
controls against diversion in its eight distribution centers within Kentucky, including those in

Jefferson County, as well as centers that distributed opioids into Kentucky, including but not
limited to its hub in Dublin, Ohio.
89. Upon and information and belief, Defendant Cardinal derived millions of dollars
of income from the controlled substances it shipped into the Commonwealth.
D. DEFENDANT CARDINAL HAS CONTINUED OVER-SHIPMENT OF OPIOIDS

TO KENTUCKY CAUSED OR CONTRIBUTED TO AN INCREASE IN HEROIN
AND ILLICIT FENTANYL USE IN KENTUCKY.
90. The rise in prescription opioid use and abuse triggered resurgence in heroin abuse,
imposing additional burdens on states and local governments that address heroin use and
addiction, including in the Commonwealth of Kentucky.
91. Heroin produces a very similar high to prescription opioids for a much lower cost.
As a result, addicted opioid users soon find themselves turning to street drugs to satisfy the high
they crave as a result of addiction created, in part, by irresponsible wholesaler practices.
92. Beyond the dangers associated with heroin, a new drug has emerged with far more
serious risks; synthetic fentanyl and its analogs like carfentanil. Addicts, who seek ever-
increasing doses, are compelled by their addiction to advance toward both heroin and these
synthetic drugs. In 2016, the Kentucky Office of Drug Control Policy reported that 47% of all
overdose deaths involved a combination of heroin and fentanyl.33
93. The increase in opioid related overdose deaths coincides with increases in heroin
and fentanyl use across the country and has been shown to be closely tied to opioid pain reliever
33
Commonwealth of Kentucky Justice & Public Safety Cabinet 20116 Overdose Fatality Report, 2
https://odcp.ky.gov/Documents/2016%20ODCP%20Overdose%20Fatality%20Report%20Final.pdf
24
misuse and dependence. Past misuse of prescription opioids is the strongest risk factor for heroin

initiation and use, specifically among persons who report past-year dependence or abuse.34
E. DEFENDANT CARDINAL POSSESSES SOPHISTICATED DRUG TRACKING

SYSTEMS THAT PROVIDE THE COMPANY WITH REAL-TIME DATA THAT
LIKELY REVEALS THE GROSS OVERSHIPPING OF OPIOIDS TO
KENTUCKY.
94. Distributors licensed to participate in the closed-system, including Defendant
Cardinal, devote substantial resources to ordering and inventory management systems.
95. Defendant Cardinal’s inventory system allowed for real-time inventory control
and item lookup. These products additionally permit for streamlined ordering, purchasing,
reconciliations, and account management.
96. Further, Defendant Cardinal utilized Six Sigma methodology, “an analytical
approach that emphasizes setting high-quality objectives, collecting data and analyzing the results
to a fine degree in order to improve processes, reduce costs and minimize errors.”35
97. Accordingly, Defendant Cardinal possesses real-time data that fully and
accurately depicts the exact amounts of pills, pill type, and anticipated customer order threshold
they have set.
98. It is conceivable that such data monitoring systems could, and likely did, track
and/or record facially suspicious orders from within the Commonwealth of Kentucky.
99. Additionally, said data likely reflects the exact, grossly inflated orders that caused
34
See https://odcp.ky.gov/Pages/The-Heroin-Epidemic.aspx (last accessed October 22, 2017).
35
Cardinal’s 2005 Annual Report states: “Across more than 50 manufacturing locations, we’re gaining efficiency
through the implementation of lean six-sigma processes, common quality systems and shared sourcing initiatives.”
See https://www.isixsigma.com/community/blogs/six-sigma-cardinal-health/ and
http://www.cardinalhealth.com/en/essential-insights/op-ex-transform-healthcare.html (last accessed Feb. 14, 2018).
25
or contributed to the opioid crisis in Kentucky, including where Defendant Cardinal overrode its

own internal controls or thresholds in order to consistently increase shipment volumes.
100. The Commonwealth has been damaged by Defendant Cardinal’s unfair, false,
misleading, or deceptive acts or practices in the conduct of the pharmaceutical wholesale trade or
commerce by failing to investigate, report, and cease fulfilling suspicious orders of controlled
substances to pharmacies in the Commonwealth.
101. The Commonwealth has been damaged by Defendant Cardinal’s negligent and/or
intentional and reckless actions by failing to investigate, report, and cease fulfilling suspicious
orders of controlled substances to pharmacies in the Commonwealth.
102. The Commonwealth has been damaged by the continuing public nuisance created
by Defendant Cardinal’s actions by failing to investigate, report, and cease fulfilling suspicious
orders of controlled substances to pharmacies in the Commonwealth.
103. Defendant Cardinal’s actions have caused and will continue to cause the
Commonwealth to expend substantial sums of funds from the State Treasury to deal with the
effects of epidemic of prescription drug addiction that was substantially fueled by Defendant
Cardinal’s illegal action in flooding the Commonwealth with highly addictive prescription
medications without regard for the consequences to the Commonwealth and its citizens.
104. The Commonwealth of Kentucky hereby seeks recuperation of the cost to its
society caused by Defendant Cardinal’s failure to act in accordance with the various laws cited
herein, general disregard for the law, misrepresentations, actions, and inactions with regard to the
distribution of opioids in the Commonwealth’s communities.
105. The scope of conduct alleged herein has proximately caused damages to
Kentuckians and their government in the form of a multigenerational health care epidemic of
26
addiction, and resulting disease and deaths. Despite being acutely aware of the risks of

oversupplying opioids, and despite being acutely aware of the increases in orders that were
suspicious, Cardinal continued to oversupply opioids to Kentucky.
106. The Attorney General, in fulfilling his duties and exercising his authority under
Kentucky law, brings this action to stop the harmful conduct, reverse the effects of the epidemic
and hold Defendant accountable for their misdeeds.
VI. CAUSES OF ACTION
COUNT I
CONSUMER PROTECTION ACT VIOLATION
107. Plaintiff incorporates by reference all other paragraphs of this Complaint as if
fully set forth herein, and further alleges as follows:
108. Kentucky has enacted a Consumer Protection Act to ensure that citizens are
protected against predatory or inappropriate actions by sellers of goods. KRS 367.120 “The
General Assembly finds that the public health, welfare and interest require a strong consumer
protection program to protect the public interest and the well-being of both the consumer public
and the ethical sellers of goods and services…”
109. KRS 367.170(1) states that "[u]nfair, false, misleading, or deceptive acts or
practices in the conduct of any trade or commerce are hereby declared unlawful." Where such
practices occur in the course of "trade" and "commerce", as those terms are defined in KRS
367.170(1) and KRS 367.110(2), that being: “the advertising, offering for sale, or distribution of
any services and any property, tangible or intangible, real, personal or mixed, and any other
article, commodity, or thing of value, and shall include any trade or commerce directly or
indirectly affecting the people of this Commonwealth”, the Consumer Protect Act applies to
27
penalize the seller and to protect the consumer.

110. With regard to Defendant’s particular practices, the Commonwealth regulates the
distribution of controlled substances within its borders. The Kentucky Legislature promulgated
the Kentucky Controlled Substances Act to promote the “preservation of public safety and public
health.” KRS 218A.005(1).
111. The Kentucky Controlled Substances Act requires of Defendant, as a wholesaler
of any Scheduled drug, to record all diverted controlled substances, and forward the record to the
Cabinet for Health and Family Services. See e.g. KRS §§ 218A.160(1)(a); 218A.170; 902 KY.
Admin Reg. 55:010 §4(1)(h),(2)(b); 201 KY. Admin. Reg. 2:105 §2(4)(d)).
112. Both the federal version and the Kentucky Controlled Substances Act create a
broad duty on the part of wholesalers to monitor, detect, investigate, refuse to fill, and report
suspicious orders of prescription opioids. These laws are intended to protect consumers from
harm. See 21 U.S.C. § 823, 21 CFR 1301.74 and KRS §§ 218A.160(1)(a); 218A.170; 902 KY.
Admin Reg. 55:010 §4(1)(h),(2)(b); 201 KY. Admin. Reg. 2:105 §2(4)(d)).
113. The harm stemming from any breach of this law and applicable regulations is
foreseeable and should have been known to Defendant Cardinal.
114. Defendant Cardinal failed and/or refused to comply with the Controlled
Substances Acts and the reporting requirements imposed therein by wholly failing to report
facially suspicious orders and failing to halt distribution when appropriate.
115. Defendant Cardinal shipped drugs into the Commonwealth without adequate
policies or procedures in place to detect suspicious orders.
116. Defendant Cardinal concealed vital knowledge and information from the
28
Commonwealth of Kentucky, its agents and employees, resulting in significant harm to the

citizens and to the public coffers.
117. As a result of Defendant Cardinal’s violations of the Controlled Substances Acts,
vis-à-vis failing to report and halt suspicious orders, the Defendant per se violated the Kentucky
Consumer Protection Act.
118. Kentucky has been forced to respond to the increase in addicted persons with a
substantial increase in expenditure of resources, for example, for monitoring and prosecuting
drug related crimes, emergency response to drug related crimes and medical emergencies, cost of
administration of opioid reversal agents such as Naloxone, and those associated with the care of
opioid addicted infants.
119. Defendant Cardinal systematically engaged in distribution that was excessive on
its face and knowingly failed to alert patients, providers, and government regulators regarding
the extent of suspected diversion of opioids. These false and deceptive practices were the
proximate cause of the harm incurred by the Commonwealth. The Commonwealth is entitled to
sue to recover any monies paid out as a result of these unfair trade practices under KRS 367.200.
120. Defendant Cardinal’s refusal to comply with applicable laws resulted in the
proliferation of disproportionate amounts of opioids within Kentucky when compared to
population. While Defendant Cardinal reaped substantial profits, it also created an environment
ripe for abuse and diversion of opioids. The subsequent and related public health and wellness
and financial impact more fully lay bare above, is the reasonably foreseeable result of Defendant
Cardinal’s actions.
121. The costs and harm suffered by the Commonwealth of Kentucky resulted directly
and proximately from Defendant’s unfair, false, misleading and deceptive trade practices.
29
Defendant Cardinal should be held liable for all resulting harm.

COUNT II
PUBLIC NUISANCE
fully set forth here, and further alleges as follows:
123. Public Nuisances are a “class of wrongs which arises from the unreasonable,
unwarrantable, or unlawful use by a person of his own property and produces such material
annoyance, inconvenience, discomfort, or hurt that the law will presume a consequent
damage." City of Somerset v. Sears, 313 Ky. 784, 233 S.W.2d 530 (1950) (quoting 39 Am.Jur.,
Nuisances, Section 2). The method in which a defendant acts or conducts its operation can in
and of itself, create an actionable nuisance. See: West Ky. Coal Co. v. Rudd, 328 S.W.2d 156,
160 (Ky. 1959). Such actions are prosecuted under common law principles. See: KRS 411.500.
124. Defendant Cardinal’s conduct constitutes a public nuisance that, if unabated, will
continue to threaten the health, safety and welfare of Kentucky’s citizens.
125. Defendant Cardinal sold, distributed, and allowed dispersal of opioid analgesics
that lacked any legitimate medical or scientific purpose. Defendant Cardinal unlawfully
distributed prescription opioids where Defendant knew, or reasonably should have known, such
opioids will be diverted and possessed and/or used illegally.
126. Defendant Cardinal intentionally and/or unlawfully failed to maintain effective
controls against diversion through proper monitoring, distributing opioids without reporting, and
refusing to fail to fill suspicious orders. Such actions were inherently dangerous to the welfare of
Kentucky’s communities.
127. Due to the actions of Defendant Cardinal, opioid use and abuse in the
30
Commonwealth of Kentucky increased substantially, with correlating increases in illicit drug use,

crime, and overdoses. The effects of Defendant Cardinal’s actions are continuing in nature.
128. Defendant Cardinal knew of the dangers to public health and safety that diversion
of opioids would create.
129. As a result of Defendant Cardinal’s actions, the Commonwealth was forced to deal
with drug addiction, related criminal and civil malfeasance and misfeasance, treatment and
incarceration costs, and a plethora of providers operating pill mills or otherwise encouraging
overutilization of opioids across the state.
130. Defendant Cardinal caused a substantial and unreasonable interference with the
public health, safety, welfare, peace, comfort and convenience, and ability to be free from
disturbance and reasonable apprehension of danger to person or property. Defendant Cardinal’s
conduct is proscribed by law. See Restatement Second, Torts Section 821B.
131. Defendant Cardinal is liable for all costs borne by the Commonwealth and its
agencies that were proximately caused by the wrongful action of Defendant.
132. In addition to damages for past nuisance by Defendant Cardinal, Plaintiff requests
relief barring any further such misconduct by Defendant in this Commonwealth and more
significantly, Plaintiff seeks to hold Defendant liable for abating, or cleaning up the issues it has
created.
133. Abatement of the now deep-rooted addiction among Kentucky communities is a
complex, expensive, and lengthy process. Defendant Cardinal must be held accountable for their
role in creating this nuisance, and correspondingly, are necessary parties to the abatement.
COUNT III
BREACH OF STATUTORY DUTIES/NEGLIGENCE PER SE
31
135. Violation of a statute gives rise to a private right of action where the injured is
within the class of persons the statute intended to be protected. This is true even where the statute
is penal in nature and provides no civil remedy, and extends to Kentucky administrative
regulations concerning public safety adopted pursuant to an enabling statute.
136. Generally, Kentucky law expressly prohibits distributors from operating in a
manner that endangers the public. 201 KAR 2:105 § 7.
137. Kentucky Board of Pharmacy requires coordination and use of reported opioid
distribution and sale data, and continued demonstration of “acceptable operational procedures,
including . . . compl[iance] with all DEA regulations.” 201 KAR 2:105 Section(4)(d), KRS
205.5634.
138. To promote public health with regard to the use of opioids, the Kentucky Agency
for Substance Abuse Policy provides a statewide framework for anti-abuse and anti-diversion
practices across the Commonwealth. KY-ASAP is currently being used in many of Kentucky
communities as the primary component of a comprehensive drug education/prevention,
treatment, and law enforcement programs.36
139. Information and data sharing between all agencies related to prescription drug use
or abuse, pursuant to KRS 205.177, serves the purpose of protection of Kentucky’s citizens.
These agencies include the Cabinet for Health and Family Services, the Justice and Public Safety
36
See https://odcp.ky.gov/Pages/Agency-for-Substance-Abuse-Policy.aspx (last visited October 21,
2017).
32
Cabinet, and “any other state or local government agency.”

140. Finally, additional Kentucky “pill mill” laws, restrict improper access to opiates
across the state and put in place reporting and data review protections to be enforced by various
state agencies, including but not limited to the state Department of Medicaid, the Cabinet for
Human Resources, the state Pharmacy Board, the state Office of Drug Control Policy, and the
Kentucky Board of Medical Licensure.
141. These laws promote transparency regarding the wholesale, dispersal, and use of
opioid analgesics. Each agency may access and share information that protects citizens from drug
diversion, medication abuse and misuse, lawful use of state healthcare funds, and all harms
incident to violations of those laws and regulations. Distributors who comply with the regulations
allow the state agencies to track and analyze risk data and to implement safeguards to protect the
public coffers and the citizens of this Commonwealth.
142. The implementation of these programs and the sharing of information among these
agencies is meaningless without the honest participation of wholesalers like Defendant.
143. Defendant Cardinal, as the wholesaler and private company, has access to
information that is otherwise unavailable to governmental entities striving to protect and care for
their citizens. This information or data includes the real time transaction level records, the
customer order thresholds, and the actual order and inventory records. However, Defendant
Cardinal hoarded the data and misled the federal and state government regarding the distribution
and use of opioid analgesics. Defendant Cardinal failed to comply with the mandatory reporting
and data sharing requirements imposed by Kentucky law.
144. Defendant Cardinal’s violations of public safety laws are prima facie evidence of
negligence. Defendant at the least had a duty to refrain from operating in a manner that endangers
33
the public. Defendant Cardinal had a duty to maintain effective controls against diversion of

prescription opioids and to guard against, prevent, and report suspicious orders of opioids.
Defendant breached mandatory, non-delegable legal duties and did not act reasonably.
145. Additionally and through the aforementioned failures, Defendant Cardinal failed
to maintain “acceptable operational procedures” pursuant to Kentucky law. Defendant Cardinal’s
failure to enact, or simply find guidance in, the framework proposed by Kentucky Agency for
Substance Abuse Policy evidences Defendant Cardinal’s disregard for black letter law,
guidelines, recommendations, and other methods to prevent the spread and abuse of prescription
opioids.
146. Defendant Cardinal’s actions constitute negligence per se as they are facial
violations of existing law and regulations. The violations promoted the misuse and diversion of
opioids across the Commonwealth.
147. Indeed, the citizens of Kentucky have been harmed, as stated above, including
through increases in addictions, the need for enforcement and treatment (including treatment of
infants) and even deaths due to the actions of Defendant Cardinal. Costs of harm to the public are
logically traceable to Plaintiff, who is charged with the general protection of the Commonwealth.
148. Accordingly, Defendant Cardinal’s actions constitute negligence per se.
Defendant Cardinal should be held liable for all damages proximately caused by the breach of
their statutory duties.
COUNT IV
NEGLIGENCE
34
150. Recovery for negligence requires establishment of the elements of duty, breach of

duty, causation, and damages. See, e.g., Lewis v. B & R Corp., 56 S.W.3d 432, 436-37 (Ky. App.
2001). Duty is a fluid and elusive concept, and the court’s decision regarding the existence of a
duty is described as a “policy determination.”
151. Kentucky law has adopted a “universal duty of care” which requires every person
to exercise ordinary care in his activities to prevent foreseeable injury. See T & M Jewelry, Inc.
v. Hicks ex rel. Hicks, 189 S.W.3d 526 (Ky. 2006).
152. The applicable statutes and administrative regulations, as previously referenced
herein, impose a duty on every opioid distributor to maintain and report data and to take
affirmative action with regard to unusual volume or suspicious orders. However, beyond the
statutory obligations, Defendant Cardinal had a general duty to protect Kentucky’s citizens by
the nature of the business in which it engaged.
153. A general duty must exist when viewing all of the elements of negligence in this
case. Defendant Cardinal’s actions constitute gross disregard for the people and government of
Kentucky, those who purchased from Defendant Cardinal and trusted Defendant Cardinal to
comply with laws regarding prescription drug distribution.
154. It was industry knowledge that an abundance of potent opioids and a lax tracking
and reporting system would provide opportunity for diversion, misuse and overprescribing. The
foreseeable risk of misuse and diversion is immediately apparent when discussing
disproportionate influx of opioids to low-populated areas. The resulting harms were foreseeable
and known to Defendant Cardinal.
155. Defendant Cardinal’s breach of these duties were the proximate cause of the harms
inflicted upon Kentucky and its citizens. The harm includes, but is not limited to, the financial
35
damages of the Commonwealth in responding to the opioid epidemic and caring for its citizens.

156. The Commonwealth and its residents suffered significant financial and personal
damages as a direct and proximate result of Defendant Cardinal’s negligence and misfeasance.
157. Defendant Cardinal breached the applicable duty of care with regard to prevention
of foreseeable injury. Defendant Cardinal must be held liable for all injuries resulting from their
negligence
COUNT V
UNJUST ENRICHMENT
159. Defendant Cardinal created and maintained an artificial market for opioids within
the Commonwealth that served only the purpose of spreading the addiction to create a reliable
and growing stream of revenue.
160. Defendant Cardinal received financial benefit from the excessive distribution of
opioids across Kentucky. The clear overuse and diversion was not reported to the appropriate
authorities because Defendant Cardinal did not want to disrupt or diminish its highly profitable
business practices.
161. Each year, Defendant Cardinal renewed its license to operate as a pharmaceutical
distributor in Kentucky, all the while misusing and abusing its privilege to do so by failing to
report and halt suspicious orders and by failing to inform the Commonwealth of Kentucky of its
continuing violations.
162. The Commonwealth of Kentucky, through its insurers, including but not limited
to the Department for Medicaid Services, paid direct reimbursement to the pharmacies or
36
insurance programs which were pass through entities in order to allow financial benefits to be

received by Defendant Cardinal.
163. Defendant Cardinal was unjustly enriched and received an inequitable financial
benefit as a result of their own unlawful action. See Rose v. Ackerson, 374 S.W.3d 339, 343 (Ky.
App. 2012).
164. Defendant Cardinal should be required to disgorge all such unjust enrichment and
to reimburse the Commonwealth for all sums to which Defendant Cardinal were not entitled.
COUNT VI
FRAUD BY OMISSION
166. Under Kentucky law, fraud by omission includes the following four elements: (1)
that the Defendant had a duty to disclose a fact or facts, (2) that the Defendant failed to disclose
such fact, (3) that the failure to disclose induced the plaintiff to act, and (4) that the plaintiff
suffered actual damages therefrom. Rivermont Inn, Inc. v. Bass Hotels & Resorts, Inc., 113
S.W.3d 636, 641 (Ky.Ct.App.2003).
167. Defendant Cardinal was under a duty required by law, to disclose or report orders
of unusual size, orders deviating substantially from a normal pattern, or orders of unusual
frequency.
168. Defendant Cardinal failed to provide the aforementioned reporting required by
law. Defendant provided minimal, inaccurate or partial reporting, if any reporting was provided
at all. As a direct and proximate result, this Commonwealth acted in reliance on such failure to
disclose and suffered grievous injury as a result.
37
169. The failure to disclose these facts constitutes fraud by omission.

170. Further, Defendant Cardinal admitted to prior violations of the federal Controlled
Substances Act.37 Thus, Plaintiff reasonably inferred that Defendant Cardinal conducted
business within the Commonwealth of Kentucky in such a way as to violate the Kentucky
Controlled Substances Act.
171. Defendant Cardinal caused harm to Plaintiff due to its clear fraud by omission.
Plaintiff is entitled to recover all damages proximately caused by these fraudulent actions.
COUNT VII
MEDICAID FRAUD KRS CHAPTER 205
172. Plaintiff incorporates by reference all other paragraphs of this Complaint as if fully
set forth here, and further alleges as follows:
173. KRS 205.8463 is violated when a person “knowingly or wantonly devise[s] a
scheme or plan[s] a scheme or artifice, or enter[s] into an agreement, combination, or conspiracy
to obtain or aid another in obtaining payments from any medical assistance program under this
chapter by means of any fictitious, false, or fraudulent application, claim, report, or document
submitted to the Cabinet for Health and Family Services, or intentionally engage in conduct
which advances the scheme or artifice.” KRS 205.8463(1).
174. It is likewise a violation of KRS 205.8463 when any person “intentionally,
knowingly, or wantonly make[s], present[s], or cause[s] to be presented to an employee or officer
of the Cabinet for Health and Family Services any false, fictitious, or fraudulent statement,
representation or entry in any application, claim, report, or document used in determining rights
37
Dep’t of Justice, U.S. Attorney’s Office, Middle District of Florida, Cardinal Agrees To Pay Record $150 Million
Settlement For Failure To Report Suspicious Orders Of Pharmaceutical Drugs (Jan. 17, 2017), available at
https://www.justice.gov/usao-mdfl/pr/Cardinal-agrees-pay-record-150-million-settlement-failure-report-suspicious-
orders.
38
to any benefit or payment.” KRS 205.8463(2).

175. Similarly, KRS 205.8463 is violated when any person to “in any matter within the
jurisdiction of the Cabinet for Health and Family Services under this chapter, knowingly, falsify,
conceal, or cover up by any trick, scheme, or device a material fact, or make any false, factious,
or fraudulent statement or representation, or make or use any false writing or document knowing
the same to contain any false, fictitious, or fraudulent statement or entry.” KRS 205.8463(4).
176. Under KRS 205.8469(1), “[t]he Attorney General, on behalf of the
Commonwealth, may commence proceedings to enforce KRS 205.8451 to 205.8483.”
177. Additionally, KRS 446.070 provides that “[a] person injured by the violation of
any statute may recover from the offender such damages as he sustained by reason of the
violation, although a penalty or forfeiture is imposed for such violation.”
178. Defendant Cardinal’s conduct, as described in the Complaint, violated KRS
205.8463(1), (2), & (4). Defendant Cardinal, through its annual deceptive license renewals
through the Commonwealth’s Cabinet for Health and Family Services (“CHFS”) and Board of
Pharmacy as well as its failure to identify, track, and reject suspicious orders of addictive
prescription opioids: (a) schemed to obtain payment from a medical assistance program through
false application or document presented to the CHFS; (b) caused to be presented false or
fraudulent claims to the CHFS; and (c) knowingly used or caused to be used a false statement, or
statement which concealed or covered up a material fact, to get a false or fraudulent claim paid
or approved by a program within the jurisdiction of the CHFS.
179. Defendant Cardinal through its duty to identify and track suspicious orders of
prescription drugs, knew or should have known that, as a natural consequence of its actions, the
Commonwealth would necessarily be paying for prescription opioids that were improperly
39
diverted for non-medically necessary and improper abuse. Defendant Cardinal financially

benefits from the excessive and non-medically necessary distribution of these prescription
narcotics.
180. Defendant Cardinal’s misrepresentations were material because if the
Commonwealth had knowledge of Defendant Cardinal’s failure to comply with state and federal
law, Defendant Cardinal’s license to distribute opioids would have been suspended or not
renewed, and, pursuant to both state and federal law, said shipments would not have been made
by Defendant.
181. By virtue of the above-described acts, Defendant Cardinal knowingly made, used,
or caused to be made or used, false records and statements, and omitted material facts, to induce
the Commonwealth to continue and renew its distribution license and obfuscate the presence of
suspicious prescription drug orders and distribute same throughout the Commonwealth.
182. By reason of Defendant Cardinal’s unlawful acts, the Commonwealth has been
damaged, and continues to be damaged, in a substantial amount to be determined at trial. Costs
of prescriptions filled due to Defendant Cardinal’s deceptive operations, and costs of addressing
the public health crisis caused or substantially contributed to by that scheme, are direct and
proximate results of Defendant’s violations as alleged herein and a significant financial burden
in the Commonwealth.
183. Defendant’s actions constitute Medicaid fraud such that Plaintiff is entitled to
recover moneys expended, in addition to penalties, fines, and interest.
184. Defendant should be held liable for all such costs, fines, remedies, and penalties
as permitted by law.
COUNT VIII
40
MEDICAID FRAUD KRS CHAPTER 194A

186. KRS 194A.505(6) provides: “No person shall, with intent to defraud or deceive,
devise a scheme or plan a scheme or artifice to obtain benefits from any assistance program by
means of false or fraudulent representations or intentionally engage in conduct that advances the
scheme or artifice.”
187. Defendant Cardinal, by reason of the acts and/or omissions set forth herein, with
the intent to defraud or deceive, devised a scheme or artifice to obtain benefits from the Kentucky
Medicaid program and intentionally engaged in conduct that advanced said scheme, in violation
of KRS 194A.505(6).
188. Defendant Cardinal, through its annual deceptive license renewals through the
Commonwealth’s CHFS and Board of Pharmacy as well as its failure to identify, track, and not
distribute suspicious orders of addictive prescription opioids, schemed to obtain benefits from an
assistance program through false representations and intentionally engage in conduct that
advanced the scheme.
189. KRS 194A.505(8) provides: “The Attorney General on behalf of the
Commonwealth of Kentucky may commence proceedings to enforce this section, and the
Attorney General shall in undertaking these proceedings exercise all powers and perform all
duties that a prosecuting attorney would otherwise perform or exercise.”
190. KRS 194A.990(5) provides: “Any person who violates KRS 194A.505(1) to (6)
shall, in addition to any other penalties provided by law, forfeit and pay a civil penalty of payment
41
to the cabinet in the amount of all benefits and payments to which the person was not entitled.”

191. By engaging in the conduct set forth above, Defendant Cardinal violated KRS
194A.505(6), and the Kentucky Medicaid program, as a direct and proximate result, paid for
opioid prescriptions that were not medically necessary. Additionally, Kentucky Medicaid has and
will be required to make payments for ongoing medical treatment and care associated with opioid
use, misuse, and abuse, on behalf of Kentucky Medicaid beneficiaries in the future as a result of
Defendant’s actions.
192. Because of the above violations of KRS 194A.505(6), the Commonwealth is
entitled to recover damages from Defendant Cardinal in an amount to be proved at trial.
entitled to recover from Defendant Cardinal civil penalties in the amount of all benefits and
payments to which Cardinal was not entitled in accordance with the provisions of KRS
194A.990(5).
entitled to recover from Defendant Cardinal all reasonable expenses that the court determines
have been necessarily incurred by the Commonwealth in prosecution of this action in accordance
with the provisions of KRS 194A.990(6).
COUNT IX
PUNITIVE DAMAGES
196. Punitive damages are given to a Plaintiff over and above the full compensation for
their injuries, for the purpose of punishing the Defendant, teaching him not to do it again, and
42
deterring others from following his example. See Hensley v. Paul Miller Ford, Inc., 508 S.W.2d

759, 762 (Ky. 1974).
197. Defendant Cardinal’s repeated and excessive shipments of suspicious orders, over
an extended period of time, in violation of public safety statutes, and without reporting the
suspicious orders to the relevant authorities, demonstrates wanton, willful, or reckless conduct or
criminal indifference to civil obligations affecting the rights of others and justifies an award of
punitive damages.
198. Kentucky and its citizens have suffered severe loss in terms of addiction,
overutilization, diversion, law enforcement costs, increased cost of treating addiction, social ills
related to addiction, and untimely patient death as a result of overdose and related illnesses.
199. Defendant Cardinal’s intentional and willful actions were the direct and proximate
cause of the losses suffered by the Commonwealth.
200. For these reasons, KRS 411.184 authorizes an award of damages upon a showing
by clear and convincing evidence that the defendant acted with fraud, oppression or malice. In
addition, a Plaintiff may show entitlement to punitive damages where the Defendant has acted
with gross negligence See Williams v. Wilson, 972 S.W.2d 260, 264 (Ky. 1998). Plaintiff is
entitled to imposition of punitive damages against the Defendants pursuant to KRS 411.184.
201. Gross negligence is a "wanton or reckless disregard for the lives, safety or property
of others." See Phelps v. Louisville Water Co., 103 S.W.3d 46, 51-52 (Ky. 2003). The threshold
for the award of punitive damages is whether the misconduct was "outrageous" in character, not
whether the injury was intentionally or negligently inflicted. Horton v. Union Light, Heat &
Power Co., 690 S.W.2d 382, 389 (Ky. 1985).
202. In a case where gross negligence is used as the basis for punitive damages, gross
43
negligence has the same character of outrage justifying punitive damages as willful and malicious

misconduct in torts where the injury is intentionally inflicted. Just as malice need not be expressed
and may be implied from outrageous conduct, so too may wanton or reckless disregard for the
rights of others be implied from the nature of the misconduct. Id. at 389-90. A finding of gross
negligence clearly requires more than a failure to exercise ordinary care. It requires a finding of
a failure to exercise even slight care such as to demonstrate a wanton or reckless disregard for the
rights of others. See Phelps, 103 S.W.3d at 51-52. See also People's Bank of Northern Kentucky,
Inc. v. Crowe Chizek & Co., LLC, 277 S.W.3d 255, 268 (Ky. App. 2008).
203. Defendant Cardinal engaged in fraudulent conduct and gross negligence that
resulted in harm to the Plaintiff. As such, Plaintiff is entitled to punitive damages against
Defendant Cardinal.
VII. PRAYER FOR RELIEF
WHEREFORE, Plaintiff prays that the Court grant the following relief:
A. Declaring that Defendant Cardinal committed willful violations of KRS 367.170;
B. An Order permanently enjoining Defendant Cardinal, and its employees, officers,

directors, agents, successors, assigns, affiliates, merged or acquired predecessors,
parent or controlling entities, subsidiaries, and any and all persons acting in
concert or participation with Cardinal, from future false, misleading, deceptive,
and/or unfair acts or practices in relation to their shipment of controlled
substances to the Commonwealth pursuant to KRS 367.190;
C. Declaring pursuant to KRS 446.070 that Defendant Cardinal committed repeated

violations of KRS 205.8463;
D. Declaring that Defendant Cardinal has engaged in conduct, acts, or practices that
resulted in fraudulent, erroneous, or illegal payments out of the Kentucky State
Treasury.
E. Temporarily enjoining Defendant Cardinal and its employees, officers, directors,

agents, successors, assigns, affiliates, merged or acquired predecessors, parent or
44
controlling entities, subsidiaries, and any and all persons acting in concert or

participation with Cardinal, from continuing their unlawful conduct, acts and
practices, including:
1. Prevents Defendant Cardinal from continuing to violate Kentucky laws;
2. Mandates that Defendant Cardinal promptly notify the appropriate authorities

of any and all suspicious orders for controlled substances as received from
parties who are located in Kentucky;
3. Mandates Defendant Cardinal submit its system for determining suspicious

order to those Kentucky authorities for prior approval, and to enjoin Defendant
from distributing any controlled substance in Kentucky for any non-legitimate
medical purpose;
4. Otherwise abates the public nuisance caused in whole or in part by Defendant

Cardinal’s actions; and
5. Mandates Defendant Cardinal provide Plaintiff with the assistance necessary to

address the addiction and the resulting destruction left by Defendant’s actions
to abate the damage they have caused and are continuing to cause.
F. Permanently enjoining Defendant Cardinal and its employees, officers, directors,

agents, successors, assigns, affiliates, merged or acquired predecessors, parent or
controlling entities, subsidiaries, and any and all persons acting in concert or
participation with Cardinal, from continuing their unlawful conduct, acts and
practices, including:
1. Prevents Defendant Cardinal from continuing to violate Kentucky laws;

2. Mandates that Defendant Cardinal promptly notify the appropriate authorities
of any and all suspicious orders for controlled substances as received from
parties who are located in Kentucky;
3. Mandates Defendant Cardinal submit their system for determining suspicious
order to those Kentucky authorities for prior approval, and to enjoin Defendant
from distributing any controlled substance in Kentucky for any non-legitimate
medical purpose;
4. Mandates Defendant Cardinal provide Plaintiff with the assistance necessary to
address the addiction and the resulting destruction left by Defendant’s actions
to abate the damage they have caused and are continuing to cause; and
5. Otherwise abates the public nuisance caused in whole or in part by Defendant

Cardinal.
45
G. Awarding treble damages pursuant to KRS 205.8467 and KRS 446.070 as well as
restitution to the Kentucky Medicaid program pursuant to KRS 194.990 on
account of the damages caused to it as a result of Defendant Cardinal’s unlawful
conduct;
H. Awarding civil penalties of $2,000 for each willful violation of the Kentucky
Consumer Protection Act pursuant to KRS 367.990(2);
I. Awarding civil penalties of $10,000 for each violation of the Kentucky Consumer
Protection Act pursuant to KRS 367.990(2), where Cardinal’s conduct is directed
at a person aged sixty (60) or older and Defendant Cardinal knew or should have
known that the person aged sixty (60) or older is substantially more vulnerable
than other members of the public;
J. Awarding punitive damages against Defendant Cardinal pursuant to KRS

411.184;
K. Awarding the Commonwealth of Kentucky its costs and attorneys’ fees;
L. Awarding the Commonwealth of Kentucky prejudgment interest as permitted by

law;
M. Awarding any other relief to which the Commonwealth is entitled or the Court
deems appropriate and just; and
N. For a trial by jury on all issues so triable.

O. Award such other relief as this Court deems just and fair.
Respectfully submitted,
ANDY BESHEAR
ATTORNEY GENERAL
By: _s/ LeeAnne Applegate_____________

LeeAnne Applegate
Elizabeth Natter
Charles W. Rowland
Assistant Attorneys General
Commonwealth of Kentucky
Office of the Attorney General
Office of Consumer Protection
1024 Capital Center Drive, Suite 200
46
Frankfort, Kentucky 40601

[email protected]
[email protected]
[email protected]
(502) 696-5300
C. David Johnstone
Brian C. Thomas
Assistant Attorneys General
Office of Medicaid Fraud and Abuse
OFFICE OF THE ATTORNEY GENERAL
1024 Capital Center Drive, Suite 200
Frankfort, Kentucky 40601
[email protected]
[email protected]
(502) 696-5300
(502) 573-8316 FAX
Counsel for Plaintiff,

Commonwealth of Kentucky
47

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COMMONWEALTH OF KENTUCKY

CFA08BDE-833B-4382-A4CB-91FDA808BC68 : 000001 of 000047

COMMONWEALTH OF KENTUCKY, ex. rel. PLAINTIFF

CARDINAL HEALTH 5, LLC; CARDINAL DEFENDANTS

Serve: CT Corporation System

Laboratories (collectively “Defendant Cardinal”) states a follows:

CFA08BDE-833B-4382-A4CB-91FDA808BC68 : 000002 of 000047

and/or deceptive business practices.

2. The actions of Defendant Cardinal include filling massive and/or “suspicious”

be no associated legitimate medical purpose.

of natural and synthetic opiates.

CFA08BDE-833B-4382-A4CB-91FDA808BC68 : 000003 of 000047

more than three months.

Commonwealth of Kentucky with excessive amounts of dangerous and addictive prescription

CFA08BDE-833B-4382-A4CB-91FDA808BC68 : 000004 of 000047

in creating a public nuisance of historic proportions.

9. As set forth below, shipments of massive quantities of opioids into the

Commonwealth by Cardinal, particularly to small sparsely populated rural counties in Eastern

charged by law and by the nature of its industry.

11. Due to Defendant Cardinal’s continued proliferation of dangerous and addictive

CFA08BDE-833B-4382-A4CB-91FDA808BC68 : 000005 of 000047

13. The Commonwealth’s response to the health emergency created by Defendant

services; investigating and prosecuting drug-related crimes; incarcerating perpetrators;

infirm, dying, and dead.

services, including emergency room admissions, inpatient hospitalizations, drug treatment,

rehabilitation services, hepatitis treatments, and a multitude of other adverse consequences of

substances that Defendant Cardinal excessively distributed in the Commonwealth.

CFA08BDE-833B-4382-A4CB-91FDA808BC68 : 000006 of 000047

the Commonwealth of Kentucky and, as such, is not a citizen of any State.

CFA08BDE-833B-4382-A4CB-91FDA808BC68 : 000007 of 000047

Cardinal Health Defendants

Place, Dublin, Ohio 43017.

registered to do business in the Commonwealth Kentucky. Their principal place of business is

7000 Cardinal Place, Dublin, Ohio 43017.

companies registered to do business in the Commonwealth Kentucky. Their principal place of

business is 7000 Cardinal Place, Dublin, Ohio 43017.

do business with the Kentucky Secretary of State.

Suite 512, Frankfort, KY 40601.

24. These Defendants are referred to collectively herein as “Defendant Cardinal.”

CFA08BDE-833B-4382-A4CB-91FDA808BC68 : 000008 of 000047

of Kentucky between January 1, 2007, and December 31, 2016.

Commonwealth of Kentucky for the wholesale distribution of controlled substances pursuant to

multiple regulations, including the Kentucky Controlled Substances Act.

KRS 218A.240, and 21 U.S.C. § 823.

III. JURISDICTION AND VENUE

rendered in the Commonwealth, and/or contracted to supply good or services in the

Commonwealth, and/or caused tortious injury by an act or omission in the Commonwealth,

CFA08BDE-833B-4382-A4CB-91FDA808BC68 : 000009 of 000047

of process and otherwise consented to the jurisdiction of Kentucky courts.

CFA08BDE-833B-4382-A4CB-91FDA808BC68 : 000010 of 000047

of federal jurisdiction is without basis in law or fact.

33. In this Complaint, Plaintiff cites or alludes to federal statutes, regulations or

in the county in which the business is situated.

IV. THE MEDICAID PROGRAM

Services, Centers for Medicare and Medicaid Services (“CMS”).

CFA08BDE-833B-4382-A4CB-91FDA808BC68 : 000011 of 000047

907 of the Kentucky Administrative Regulations and other applicable law.

provided to opioid-addicted Medicaid beneficiaries whose addiction was created by availability

overdoses. Approximately 6 out of 10 drug overdose deaths are caused by opioids.7