In a landmark case highlighting the severe consequences of the opioid crisis, two Alabama doctors, John Patrick Couch and Xiulu Ruan, have been handed down lengthy federal prison sentences for operating a massive pill mill. Acting United States Attorney Steve Butler of the Southern District of Alabama announced the sentencing, marking a significant victory in the fight against illegal opioid distribution. Dr. Couch received a 240-month sentence, while Dr. Ruan was sentenced to 252 months, effectively ending their criminal enterprise that prioritized profit over patient well-being.
Senior Judge Callie V.S. Granade presided over the sentencing hearing and delivered a damning assessment of the doctors’ actions. The court determined that the sheer volume of illegally prescribed opioids by these doctors was equivalent to over 90,000 kilograms of marijuana. Judge Granade further emphasized the gravity of their offenses by highlighting that both Dr. Couch and Dr. Ruan had committed perjury and misused their specialized medical skills to execute their criminal scheme. The emotional toll of their actions was palpable as family members of deceased patients of Doctors Couch addressed the court, sharing heart-wrenching stories of loss and devastation. Conversely, some patients spoke in defense of the doctors, painting a complex picture of the individuals behind the crimes. Ultimately, Judge Granade’s sentences reflected the severity of the crimes, with Dr. Ruan receiving a longer term as he was identified as the leader of the criminal operation. In addition to prison time, the doctors were ordered to pay substantial restitution to healthcare providers, including $6,282,023.00 to Medicare, $3,649,092.97 to Blue Cross/Blue Shield of Alabama, $2,285,170.70 to Tricare, and $1,695,929.00 to United Health Group.
The downfall of Doctors Couch and Ruan began with extensive investigations by the FBI and DEA, culminating in search warrants executed on May 20, 2015. Their joint ownership and operation of Physicians Pain Specialists of Alabama (“PPSA”) and C&R Pharmacy became the focal point of the investigation. Both doctors faced a barrage of federal felony charges, including RICO conspiracy, conspiracy to violate the Controlled Substances Act, drug distribution offenses, and multiple fraud conspiracies. These charges stemmed directly from their operation of PPSA and C&R Pharmacy, which the prosecution successfully argued was a criminal enterprise masked as legitimate medical practices.
During the grueling seven-week trial, the United States meticulously presented evidence demonstrating how Doctors Couch and Ruan exploited PPSA and C&R Pharmacy to violate the RICO Act and the Controlled Substances Act, while also committing mail and wire fraud. The jury was presented with compelling evidence that the doctors knowingly and deliberately prescribed Schedule II and III Controlled Substances, including highly potent fentanyl medications, outside the bounds of accepted medical practice and without legitimate medical justification. The prosecution effectively argued that the driving force behind this illegal prescribing was pure financial greed. Furthermore, the court heard how their billing practices were systematically designed to unlawfully enrich the doctors at the expense of patients and healthcare systems.
A critical aspect of the trial revolved around two brand-name instant-release fentanyl drugs: Subsys and Abstral. These powerful opioids are FDA-approved exclusively for breakthrough cancer pain in patients already tolerant to opioids. However, evidence revealed a shocking deviation from these guidelines, as Doctors Couch and Ruan overwhelmingly prescribed these drugs “off-label” for common pain conditions like neck, back, and joint pain. The jury was convinced by evidence showing that the doctors received illegal kickbacks from Insys Therapeutics, the manufacturer of Subsys, as an incentive to prescribe massive quantities of this highly addictive drug. Disturbingly, both doctors were among the nation’s top prescribers of Subsys, indicating the scale of their illicit activities. Adding another layer of deceit, evidence showed Dr. Ruan began donating his Insys kickback payments immediately after receiving news of criminal charges against another doctor, Gavin Awerbuch, who was also implicated in a Subsys kickback scheme. The prosecution argued this donation was a calculated attempt by Dr. Ruan to distance himself from the incriminating money trail and the company.
Dr. John Patrick Couch
The evidence regarding Abstral was equally damning. It was revealed that Doctors Couch and Ruan invested approximately $1.6 million in stock in Galena Biopharma, the manufacturer of Abstral. They then actively sought to manipulate the stock price by aggressively pushing Abstral sales through their clinics. Between the third quarter of 2013 and 2014, Dr. Ruan and Doctors Couch ascended to become the top two prescribers of Abstral in the entire United States. During this period, an astonishing statistic emerged: nearly one in every three Abstral prescriptions written across the U.S. originated from either Dr. Ruan or Doctors Couch, further demonstrating the immense scale of their fraudulent operation.
C&R Pharmacy, owned by Doctors Couch and Ruan, played a crucial role in their criminal enterprise. Strategically co-located with one of the PPSA clinic sites, C&R Pharmacy operated as a captive pharmacy, exclusively filling prescriptions written by the doctors at PPSA. The profits from prescription drug reimbursements were then funneled back to the doctors, with Dr. Ruan and Doctors Couch pocketing a staggering 75% share. Approximately 91% of the Subsys and Abstral prescriptions issued by the defendants – prescriptions that cost patients’ insurance plans between $1,000.00 and $24,000.00 per month – were filled at their own C&R Pharmacy, maximizing their illicit gains.
Beyond C&R Pharmacy, Doctors Couch and Ruan also operated a worker’s compensation dispensary, adding another layer to their illegal drug distribution network. Through this dispensary, they directly dispensed Controlled Substances. The jury heard evidence of guaranteed monthly kickbacks paid to the doctors by a dispensary management company, initially Industrial Pharmaceuticals Management (“IPM”) and later Comprehensive Rx (“CRX”). These kickbacks were incentives for the doctors to dispense specific drugs with high reimbursement rates. The monthly guaranteed payments reached exorbitant amounts, with Dr. Ruan receiving up to $80,000.00 per month and Doctors Couch receiving $20,000.00 per month. Millions of dollars in kickbacks associated with the worker’s compensation dispensary were funneled into private bank accounts established by the defendants, further concealing their illegal income.
While some patients genuinely received legitimate medical care at PPSA, the trial exposed a disturbing pattern of neglect and malpractice. Evidence revealed that many patients rarely saw either of the doctors personally. Adding to the alarming picture, nurse practitioners treating Doctors Couch’s patients were reportedly abusing drugs while at work and then proceeding to treat patients, raising serious concerns about patient safety and standard of care. Furthermore, the jury heard testimony that Dr. Couch knowingly allowed one of his nurse practitioners, Justin Palmer, to forge Dr. Couch’s signature on prescriptions for Controlled Substances. Palmer himself testified that he forged Dr. Couch’s name approximately 25,000 times during his employment at PPSA, highlighting a systemic breakdown of ethical and legal boundaries within the practice.
After an exhaustive seven-week trial, testimony from 81 witnesses, and three days of jury deliberation, a verdict was reached that held Doctors Couch and Ruan accountable for their extensive criminal actions. Both doctors were convicted on all counts, including RICO conspiracy, conspiracy to prescribe Schedule II and III Controlled Substances outside professional practice, conspiracy to prescribe over 40 grams of fentanyl illegally, conspiracy to commit healthcare fraud, mail and wire fraud conspiracies, conspiracy to receive illegal kickbacks from IPM/CRX, and conspiracy to receive illegal kickbacks from Insys Therapeutics for Subsys prescriptions. In addition, Dr. Ruan was also convicted on conspiracy and substantive money laundering charges. Each doctor was also found guilty of multiple substantive illegal drug distribution counts related to specific patient prescriptions. Dr. Ruan was acquitted on only one substantive charge.
Dr. Xiulu Ruan
Following their convictions, Doctors Couch and Ruan agreed to forfeit a substantial amount of assets to the United States government. This included multiple houses, luxury beach condos, numerous bank accounts, and a collection of 23 luxury vehicles, featuring brands like Bentley, Lamborghini, Mercedes, and Ferrari. In addition to the forfeited property, each doctor was ordered to pay a $5,000,000.00 money judgment. The United States is currently in the process of preparing to auction off the forfeited vehicles and properties, representing a significant recovery of ill-gotten gains.
Prior to the trial, several individuals involved in the scheme had already pleaded guilty and faced sentencing. Justin Palmer and Bridgette Parker, nurse practitioners working for Doctors Couch, admitted to conspiring to prescribe Controlled Substances illegally. They received federal prison sentences of 30 months and 20 months, respectively. Christopher Manfuso, associated with IPM and later owner of CRX, pleaded guilty to conspiring to pay illegal kickbacks and was sentenced to 6 months of home confinement and a $50,000.00 fine. Natalie Perhacs, an Insys Therapeutics drug representative, also pleaded guilty to conspiring to pay illegal kickbacks related to Subsys prescribing and awaits sentencing. All four individuals testified against Doctors Couch and Ruan during the trial, providing crucial insider perspectives on the illicit operations.
Acting United States Attorney Steve Butler emphasized the significance of the sentences, stating, “Any medical professional who chooses to place profit over patient care should heed the lengthy sentences received by Doctors Couch and Ruan.” He commended the victim’s families for their powerful testimonies and thanked law enforcement partners at the FBI and DEA for their dedication to justice in this case of national importance. Butler stressed the ongoing fight against opioid abuse and trafficking, stating his office’s commitment to vigorously prosecuting such cases.
Special Agent in Charge Stephen G. Azzam of the Drug Enforcement Administration’s New Orleans Field Office echoed these sentiments, highlighting the DEA’s commitment to combating prescription drug diversion and trafficking. He emphasized the devastating impact of opiate abuse in Alabama and across the nation, noting the role of prescription painkiller diversion as a gateway to heroin addiction. Azzam stated that the lengthy sentences for Doctors Couch and Ruan appropriately reflected the devastation they caused and would serve to protect the community and deter other medical practitioners from prioritizing profit over patient health and safety.
FBI-Mobile Special Agent in Charge Robert Lasky reaffirmed the FBI’s commitment to collaborative law enforcement efforts and vowed continued targeting of illegal activity within the medical profession, as exemplified by this case. The case was a joint investigation by the DEA-Mobile and FBI-Mobile and was prosecuted by Assistant U.S. Attorneys Christopher Bodnar and Deborah Griffin, showcasing the successful partnership in bringing Doctors Couch and Ruan to justice. The outcome of this case serves as a stark reminder of the severe legal repercussions for medical professionals who betray their oaths and engage in criminal activities that fuel the opioid crisis.
