Yes, the manufacturer was sketchy as hell.
The prescribing doctor and clinic were quickly identified, by worried pharmacists and by the sketchy manufacturers.
This was during the time the "war on drugs" was pretty full on, and the risks of opiate prescribing were well known.
How did the various systems fail?
We see this across a range of different industries. People sort of report some concerns, but they often don't do it properly.
Sometimes that means mildly defective product is shipped. Other times it means many people are harmed.
There was a submission several years ago about an accountant who somehow got wrapped up in massive amounts of fraud. He said that many people along the way could have stopped him, and he didn't make much effort to perpetuate the fraud. He would just ask people to fill out that bit of paper, or to wait a few days before sending some other bit of paper, and they all just thought "he's okay, I'll do him this favour". Individually they were little favours. Collectively, it was pretty big.
(I'm trying to fidn the link now)