Skip to content

Podcast

136. The Blueprint

Swindled

Source ↗ ← All highlights
  • OxyContin’s Misleading Safety Narrative
    • Purdue Pharma marketed OxyContin as a 12-hour, low-addiction solution despite weak evidence and internal doubts.
    • That framing expanded opioid use beyond terminal patients and reshaped pain treatment nationwide. Transcript: A Concerned Citizen For adequate treatment. Every story about America’s opioid epidemic starts here. December 1995, when Purdue Pharma, a modest family-owned company based in Stanford, Connecticut, won FDA approval for OxyContin, an extended-release oxycodone pill designed To replace its aging flagship morphine-based product soon after its patent expired. The active ingredient was not new. Oxycodone, derived from the same poppy plant that produces opium for morphine, has been approved for medical use in the United States since 1939. For decades, it was commonly combined with aspirin or acetaminophen and sold under brand names like Percocet and Percodan to treat moderate to severe pain. In its purest form, oxycodone was largely reserved for cancer patients and those in end-of care, prescribed to block pain receptors and make one’s final days more tolerable. At high doses, the semi-synthetic opioid produces an intense sense of euphoria, one for which most earthly pleasures simply cannot compare. That’s why oxycodone is so physically and psychologically addictive, experts say. And that’s why for decades, medical professionals knew better than to prescribe it as a long-term treatment for pain, even though it was incredibly effective. Purdue Pharma intended to challenge that consensus. We had a product that had tremendous potential. For a hundred years and even today, there is no drug that is more effective or safer than opioids for treating pain over the long term. The company’s new OxyContin pill would redefine pain management. Unlike short-acting opioids that required constant dosing, OxyContin was a 12-hour controlled release tablet, just one pill twice a day for smooth sustained pain control. Patients, Purdue said, could finally sleep through the night without the dreaded clock watching. Another supposed advantage of OxyContin’s delayed absorption, according to Purdue, was that it reduced the drug’s potential for abuse by eliminating dependencies as well as the Euphoric buzz associated with strong doses. As a result, the company announced pain could now be treated indefinitely with narcotics and across a far broader range of conditions than ever before. Not just cancer, but back pain, arthritis, migraines, and knee injuries, ideal for sports medicine, dentistry, and even pediatrics. The company was no longer targeting a niche population of terminal patients, but a vastly expanded and highly profitable market that included anyone suffering from lingering discomfort. There was only one problem. Purdue’s claims did not hold up. The company’s own early unpublished studies of OxyContin showed that the drugs’ effects rarely lasted a full 12 hours, sometimes wearing off in as little as 8. When that happened, patients were left not only with the return of their underlying pain, but with the added distress of opioid withdrawal. Purdue was aware of this, so was the U.S. Food and Drug Administration. Yet, in late 1995, OxyContin was approved and labeled as a 12-hour medication without any long-term studies or assessments of its addictive capabilities. (Time 0:01:00)
  • Manufactured Demand Through ‘Pain Movement’
    • Purdue spent heavily to create a “pain movement” that normalized long-term opioid use for many conditions.
    • They promoted pseudo-addiction to justify prescribing ever-greater opioid doses. Transcript: A Concerned Citizen What followed was one of the most aggressive pharmaceutical marketing campaigns in American history. Purdue modeled its strategy on the blueprint pioneered decades earlier by Richard Sackler’s uncle, Arthur Sackler, who had famously transformed Valium into the industry’s first $100 million blockbuster in the 1970s. Using that playbook, Purdue spent more than $207 million promoting OxyContin and doubled the size of its sales force, dispatching representatives to rural communities and mining Towns with high rates of workplace injury. Doctors, pharmacists, and nurses were flown to all expenses paid pain management conferences where they were recruited, trained, and paid to promote the drug to their peers. Promotional videos featuring testimonials from patients whose lives had supposedly been transformed by OxyContin were shipped to tens of thousands of medical offices across the Country. They arrived alongside stacks of starter coupons and boxes of swag, hats, pins, and even coffee mugs that revealed a hidden slogan when heeded. It read, OxyContin, a step in the right direction. Chris George It felt like somebody had a ice pick all the time, gouging right down in my backbone, just wiggling all the time. Since I’ve been on this new pain medication, I have not missed one day of work. The brand name is OxyContin. Another thing, especially about the OxyContin, is that I feel like a real participant again. A Concerned Citizen It was all about selling the narrative. Pain, Purdue insisted, was dangerously undertreated. Opioids were safe. Addiction was rare. Life could be bearable again. To spread this message, the company set out to build what it referred to internally as a pain movement. Purdue partnered with competitors, most notably Johnson& Johnson, and together they financed advocacy organizations such as the American Pain Foundation and the American Pain Society, which fiercely supported the aggressive treatment of pain with opioid like OxyContin, as long as it was taken as prescribed. Opioids are the best, strongest pain medications and should be used much more than they are for patients in pain. The potential for becoming addicted to a prescribed opioid is very, very small. (Time 0:05:43)
  • How The George Twins Built A Pill Mill
    • Chris and Jeff George launched South Beach Rejuvenation as a telemedicine steroid front and then expanded into a cash-only pain clinic.
    • A five- to ten-minute visit routinely ended with prescriptions for hundreds of oxycodone tablets dispensed on site. Transcript: A Concerned Citizen In 2006, while still working in construction, the George Brothers launched South Beach Rejuvenation, a telemedicine clinic that functioned largely as a front for selling legal Steroids. Customers completed online questionnaires on a doctor working remotely from his home, and approved prescriptions sight unseen for $5,000 per week. When he wasn’t available, clinic employees, mostly Jeff and Chris’s tribal tattooed affliction shirt wearing buddies, simply forged his signature. Word spread quickly. Ads and bodybuilding magazines and gym locker rooms brought in a steady stream of customers. By the end of its first year, South Beach Rejuvenation was generating nearly $1 million in annual revenue. In 2007, the brothers opened a second location. That’s where they met a physician known to local police as the Candyman. His real name was William Overstreet. One day, Overstreet made a suggestion. You know, if you guys want to make some real money, you should sell pain pills too. Pain pills? The twins asked, dumbfounded. Yeah, you know, oxys, roxys, blues, greenies, perks. The brothers were many things, but drug users, they were not. Listen, there’s huge demand for this stuff, Overstreet told them. And with my DEA registration number, I can order it straight from the source. You lease the office space. You manage the business. It was a simple proposal. The George brothers agreed to open multiple pain clinics along Florida’s east coast. Chris made the first move. Chris George Well, I’ll get an office. It didn’t cost much. I ran an office for like $10,000, you know, with first and last security. I built it out myself, a simple little build out. And we started that business. It was with that one doctor, me and my girlfriend at the time. A Concerned Citizen Chris George found a small, single-story bungalow outside of Fort Lauderdale on Oakland Park Boulevard, wedged between pawn shops and laundromats, just steps from a Christian radio Station. In the parking lot, he planted a large red and white sign that read simply, Pain Clinic. Decals on the windows promised, Pain Management, Testosterone, Weight Loss, HGH. Walk-ins welcome. South Florida Pain Clinic, officially opened for business in February 2008. Patients paid $200 per visit, cash or credit. Insurance was not accepted. After checking in, they filled out intake forms that Chris had stolen from another clinic. He just swapped out the letterhead. The patients were then ushered into an exam room with Dr. William Overstreet for a 5-10 minute consultation. The visit usually ended the same way. A prescription for 240 30-milligram oxycodone tablets. The maximum overstreet believed he could write without drawing attention from the DEA. The patient would return to the front desk and pay an additional $400 to $700 for the medication. The prescription was filled immediately on site. Chris’s girlfriend, Diana Pavnik, an exotic dancer turned receptionist and untrained pharmacist, retrieved the pills from a gun safe hidden in a closet, handed them across the counter, And scheduled a follow-up appointment for 28 days later. (Time 0:21:11)
  • Profit Incentives Drove Excess Prescribing
    • The clinic monetized prescribing by paying doctors per patient and buying pills via multiple wholesalers using DEA numbers.
    • That system maximized pill supply and profit while evading single-source caps. Transcript: A Concerned Citizen The incentive structure shifted. The more patients a doctor saw on a day, the more money everyone made. And more doctors meant more DEA numbers. And more DEA numbers meant access to more pills. The only issue was that most pharmaceutical wholesalers had caps on the amount of controlled substances they would send to each doctor per week. Chris circumvented these restrictions by simply sourcing from multiple wholesalers, which was much easier than it should have been. All he had to do was fax in the doctor’s registration number and medical license and tell them what he wanted. And what South Florida Pain Clinic usually wanted was roxycodone, the cheaper, immediate release, easier to crush, dissolve, and inject alternative to OxyContin. The profit margin was obscene. South Florida Payne bought RoxyCodone for 33 cents per pill and sold them for $2. Every cent of profit from the pharmaceutical sales flowed straight into Chris George’s pocket, and it was piling up faster than he had ever imagined. Within two months, the clinic was generating tens of thousands of dollars a day and growing exponentially. The billboards and back page ads Chris bought were paying off. Each morning before the doors even opened, a line of patients wrapped around the building. Most of them were from out of state, from places like Kentucky, Tennessee, and West Virginia, states that had implemented prescription monitoring programs to crack down on pill abuse. (Time 0:32:13)
  • Florida Became A National Pill Supermarket
    • Florida lacked a prescription monitoring program, so addicts and traffickers traveled in caravans to buy pills legally.
    • The pills bought here were resold in Appalachia for huge markups, fueling interstate trafficking. Transcript: A Concerned Citizen Florida had no such controls. Years earlier, Purdue Pharma had offered to help fund a statewide prescription monitoring database as part of a legal settlement, but the legislation to create it was blocked by then-Florida House Speaker Marco Rubio in retaliation against a state senator who had hurt his feelings. Fast forward a few years, and caravans of pillbillies were traveling a thousand miles down I-75 from Appalachia to South Florida, where one could visit as many doctors in a day as time Allowed, not just to feed their addictions, but also to feed their families. Illegal $2 Roxy in Florida could be resold on the street in Morgantown for as much as $80. The trips were so profitable, the so-called sponsors would round up a fanload of people to make the trip, pay their appointment fees and prescription costs in exchange for half the Goods. The locals would sometimes recruit patients from the free HIV clinic down the street. Everybody was welcome at South Florida Pain. (Time 0:33:38)
  • Legitimacy Theater And Cash Hoarding
    • South Florida Pain formalized procedures—drug tests and MRIs—to appear legitimate while profiting from on-site diagnostics and kickbacks.
    • The clinics funneled cash so fast banks refused it, forcing storage in safes and homes. Transcript: A Concerned Citizen That what the clinics are doing is perfectly legal. In August 2008, South Florida Pain Clinic temporarily relocated to a strip mall on Cypress Creek Road in Fort Lauderdale near I-95. The new location offered significantly more space and parking than the former bungalow on Oakland Park Boulevard, where Chris’s girlfriend Diana Pavnik remained stationed to redirect Patients to the new location. Chris himself was actively advertising job winnings for new doctors to quickly fill the empty exam rooms. Again, there was no shortage of applicants. It seemed as if medical professionals from every specialty were looking to supplement their income, each for their own reasons. Family practitioners struggling to pay off student loans, proctologists drowning in gambling debt, Caribbean doctors who couldn’t find a job anywhere else, and plastic surgeons Whose business had dried up thanks to the recession. But in practice, there was only one qualification that mattered, the willingness to prescribe large quantities of controlled substances with minimal scrutiny. To find out, Chris had them shadow the existing physicians to observe how the clinic operated. The doctors at South Florida Payne never discussed their expected duty amongst themselves, perhaps for the sake of plausible deniability, but the reality was impossible to miss. The custom rubber stamps Chris had ordered to speed up prescription writing were a dead giveaway. If that wasn’t enough, a quick stroll through the waiting room or the parking lot would tell them everything they needed to know. The same issues with controlling the patients persisted at South Florida Payne’s new location. Within weeks, neighboring businesses complaining about used needles turning up in their toilet bowls. The outrage was impossible to ignore. Chris decided something had to change. It was time to make the operation more legitimate, or at least appear more legitimate. In other words, the clinic needed to institute some additional hurdles to cover their own asses. He hired a law firm for $10,000 to draft a formal set of standard operating procedures, the kind any respectable medical practice would have. New requirements were introduced. Patients had to pass a drug test, and they had to submit MRI scans to justify their need for pain management. The new rules reduced some of the chaos. They also created new problems. The waiting room bathroom became unusable, clogged daily by patients flushing condoms in which they had smuggled clean urine. And the added bureaucracy gave rise to a new underground economy. Derek Nolan, already collecting bribes from patients desperate to skip the line, began earning thousands more through kickbacks from imaging centers in exchange for referrals. Ultimately, South Florida Payne entered into an exclusive partnership with a diagnostic company operating out of an unmarked trailer parked behind Goldfinger Gentlemen’s Club. It stayed open late, the results were always worthy of narcotics, and the turnaround time was unmatched as well. Probably because the company didn’t even waste time cleaning the MRI machine’s headrest, which was caked with a thick brown ring of Appalachian dirt. South Florida Payne, too, had become a well-oiled machine, one that printed money, more than a quarter million dollars a week. The cash came in so fast the registers couldn’t contain it. (Time 0:40:50)
  • Using RICO To Dismantle Pill Mills
    • Prosecutors used RICO to treat the clinics as an organized criminal enterprise because individual clinic activity was often technically legal.
    • That shift allowed seizures of cash, indictments, and mass convictions. Transcript: A Concerned Citizen For 14 months, a joint task force, made up of the FBI, IRS, DEA, and local law enforcement, had been quietly building a case against the George Brothers. Undercover officers posed as patients inside American Pain, secretly recording what they saw. Investigators had also placed a wiretap on Chris George’s phone and had been listening to his calls and reading his texts for months. By the morning of Wednesday, March 3rd, 2010, there was enough probable cause to make a move. Search and seizure warrants were issued for seven locations. More than 400 officers coordinated a simultaneous raid on American Pain, Executive Pain, South Beach Rejuvenation, East Coast and the homes of Chris George, his mother Denise Haggerty, And American Pain’s office manager, Ethan Baumhoff. Hello? Christopher? Yes. Hey, it’s the sheriff’s office. What’s wrong? You need to come home right now. There’s some people at your house that need to speak to you. When police arrived at Chris’ house, no one was there. He had already left for the day on what he considered routine business involving a rival clinic. Chris had no intention of going back to his house. Instead, he began frantically calling anyone who might be implicated, starting with Diana, who volunteered to return to the property to scope out the scene. Chris would call her several times throughout the morning with regular updates and panic attacks. Hello? Chris George Hey. They’re going to fucking have a search warrant for the house. They’re inside the house. What? A Concerned Citizen Yeah. Chris George For what? A Concerned Citizen I don’t know. They’re in the house. They have dogs. They’re in the empty. Yeah, I’m not a fucking joke. Chris George Call your lawyer right now, Chris. You need to go there and see what’s going on. Listen, there’s these two guns in the garage. You’re going to have to say those are yours or something. I’ll get rid of them. Baby, you might have to take the blame for some of that stuff. That’s fine, Dave. Call your lawyer. Babe, I think I’m in a lot of trouble. A Concerned Citizen In Chris’s garage, the task force found two guns that were illegal for a felon like Chris to own. They were propped up against a wall that displayed a Nazi flag, which made sense. Chris had similar tattoos on his chest and abdomen. You never know who is living next door. This is the home of Chris George. It’s Jeff George’s brother right behind me here. This is where he lived and operated out of. Curious neighbors said they never suspected anything. They said there was never any case for alarm. That wasn’t until the bomb squad showed up. Chris George The FBI, the DEA, the special forces, the bomb squad, you name it. I thought that Barack Obama himself was going to show up next. A Concerned Citizen Inside, agents discovered what they believed to be an explosive compound. The bomb squad later determined that it was residue from homemade fireworks. They also seized $75,000 in cash from the house, but investigators knew it was only a fraction of what was hidden. Fortunately, Chris’s still active wiretap led them straight to the rest. At the twins’ mother’s house, federal agents opened safes in the attic and found roughly $4.3 million in cash. Denise Haggerty insisted. She had no idea it was there. Combined with nine frozen bank accounts and the cash at the clinics, federal agents had seized over $7 million. (Time 1:02:21)
  • Convictions, Pleas, And Mixed Outcomes
    • Chris George pleaded guilty to racketeering and got 17.5 years; many associates pleaded and received reduced sentences for testifying.
    • Some doctors were acquitted on death charges but convicted of money laundering and still punished. Transcript: A Concerned Citizen He sat in jail for eight months before agreeing to talk. By then, every doctor and staff member at American Pain had already folded. Derek Nolan followed suit. The result was a 123-page indictment, unsealed on August 23, 2011. 32 defendants, including Chris and Jeff, their mother, Denise, Derek, Diana, Ethan Baumhoff, and 13 doctors were charged under RICO statutes, typically reserved for organized Crime. Prosecutors alleged a sweeping criminal enterprise that ranged from online steroid clinics and telemarketing fraud schemes to a network of pill mills that issued nearly 67,000 Illegitimate prescriptions for controlled substances that generated up to $40 million a year and contributed to an untold number of deaths. The indictment also made reference to kidnapping, extortion, unlawful restraint, and other crimes of violence. These defendants showed a callous disregard for the well-being of their patients and the value of human life, U.S. Attorney Wilfredo Ferrer said in a statement. This conduct, described in today’s charges, is horrific. It’s governed by absolute greed. Chris George The FBI says today marks the dismantling of one of the nation’s largest criminal organizations of illegal distributions of painkillers. And at the center of all this is Jeff George, who will face murder charges in the death of a patient who overdosed on pain pills. A Concerned Citizen At the same time the federal indictment was announced, a state grand jury charged Jeff George, Dr. Gerald Klein, and Theodore Obermeyer, the office manager at East Coast Pain, for their role in the death of Joey Bartolucci. George and Theo Obermeyer quickly pleaded guilty to state murder charges to avoid life sentences. Both men agreed to testify against Dr. Gerald Klein, who instead chose to go to trial. Klein was ultimately acquitted of the most serious charges, but he was convicted of illegally selling Xanax to Donald Trump’s former chef. He was sentenced to four years of probation. Jeff George would learn his fate at the end of the federal proceedings, which would come sooner than later. Two months after the indictment was unsealed, nearly every defendant had entered a plea. 25 of the twins’ associates were sentenced to prison. Diana Pavnik and the twins’ mother received two and a half years for wire fraud. Derek Nolan got 14 years for racketeering conspiracy. Most of the doctors pleaded guilty to conspiracy charges as well and received six-year sentences. Two of the older ones died before being handed their punishments. Two others refused plea deals and maintained their innocence. Dr. Cynthia Cadet, American Pains Doctor of the Year in 2009, and Dr. Joseph Castronuovo of Executive Paine. Prosecutors filed a superseding indictment, charging both doctors with more serious offenses, including distribution of controlled substances resulting in death. Their trial was scheduled for 2013. In the meantime, Chris George, the ringleader of the operation, pleaded guilty to racketeering and was sentenced to 17 and a half years in prison. Chris George 30-year pill mill operator Christopher George of Wellington has been sentenced to 17 and a half years in prison. He and his twin brother, Jeff George, authorities said, ran one of the largest illicit prescription drug networks in the nation, one that’s blamed for at least 50 overdose deaths. A Concerned Citizen It was the longest sentence handed down in the case so far, until Jeff George, a competitive twin till the end, surpassed him with a 20-year state sentence for the murder charge. At the hearing, Jeff begged the judge for leniency, claiming he had already been severely beaten in prison for being a snitch. Speaking of which, nearly every defendant in the case was offered the chance to cut their prison stays in half by testifying against Cadet and Castro Nuevo in their upcoming trial. Cadet would ultimately argue that she had been an unwitting participant in the conspiracy, despite earning more than $1.2 million during 16 months at American Pain and an additional $1,000 a week prescribing steroids at South Beach Rejuvenation. Surprisingly, the jury agreed. On July 31, 2013, both Cadet and Castro Nuovo were acquitted of the drug and death charges, but convicted of money laundering, Cadet received a harsher sentence, six and a half years In prison. (Time 1:08:32)
  • Supply Crackdowns Can Backfire
    • Shutting down pill mills shifted demand to heroin and later fentanyl, escalating overdose deaths.
    • Supply control without treating addiction simply changes the drugs that kill people. Transcript: A Concerned Citizen Every year, tens of thousands of people just like Joey Bartolucci die from synthetic and semi-synthetic opioids. Florida did eventually pass sweeping reforms that shut down its pill mills, like the ones the George brothers operated. As of 2023, every state in the country has implemented some form of prescription monitoring. But cutting off the supply of oxycodone didn’t end the crisis. It just ushered in the next wave. The crackdown drove up the street value of prescription pills until heroin resurfaced as the cheaper, more lethal alternative. And that was before fentanyl entered the scene. It’s become cliche at this point, but it bears repeating. Until the roots of addiction are addressed, the war on drugs will remain a never-ending exercise in futility. But maybe that’s always been the point. (Time 1:14:37)
  • Treat Roots, Not Just Supply
    • Address addiction’s root causes rather than only cracking down on supply to avoid cyclical drug crises.
    • Combine prevention, treatment, and accountability for a long-term solution. Transcript: A Concerned Citizen Until the roots of addiction are addressed, the war on drugs will remain a never-ending exercise in futility. But maybe that’s always been the point. To break them, medicate them, addict them, rehab them, jail them, bury them, blame them, and cash a check every step of the way. (Time 1:15:19)