In the two years since the Department of Health and Human Services declared opioid addiction a public health emergency on October 26, 2017, thousands of lawsuits have been filed seeking to hold pharmaceutical companies liable, many of which have ended in multi-million dollar settlement agreements. In 2017, Mallinckrodt Plc , a manufacturer of oxycodone, settled investigations that it violated the Controlled Substances Act for $35 million. In 2017, McKesson Corporation paid fines of $150 million to settle claims brought by the Department of Justice that the company violated the Controlled Substances Act, a fine that at the time was a record-breaking settlement for opioid-related litigation. In 2017, McKesson also settled claims with West Virginia for $37 million; Cardinal Health and AmerisourceBergen settled similar claims with West Virginia for $20 million and $16 million respectively.
Judge Orders Johnson & Johnson to pay $562 Million
On August 26, 2019 an Oklahoma judge ordered Johnson & Johnson to pay $572 million to the state for its role in contributing to the opioid epidemic. This was the first judgment to hold a pharmaceutical company liable for its contribution to the opioid epidemic, and it revealed the massive exposure to liability that pharmaceutical companies face in the impending wave of similar opioid crisis trials. Johnson & Johnson has since appealed this verdict to the Oklahoma Supreme Court, arguing that the ruling will set a dangerous precedent.
McKesson, Cardinal Health, AmerisourceBergen, and Teva Reach $260 Million Settlement
On October 21, 2019, four of the nation’s top pharmaceutical companies agreed to a last-minute $260 million settlement with two Ohio counties for their claims which were set to be a bellwether trial in a larger multidistrict opioid litigation (MDL). Trial for this bellwether case was set to begin the following Monday, September 23. Under the terms of the settlement, pharmaceutical distributors McKesson, Cardinal Health, and AmerisourceBergen will pay $215 million, and generic drugmaker Teva will pay $20 million, in addition to donating $25 million in anti-addiction medications. This agreement with two Ohio counties did not settle the entire MDL, which covers claims against pharmaceutical companies brought by cities and counties across the nation. Prior to reaching this settlement, Judge Polster, the federal judge overseeing the MDL, approved a novel negotiation class which would allow the defendant pharmaceutical companies to engage in negotiations with over 30,000 local and state governments to allow the parties to reach a global settlement. Defendants have proposed a $48 billion global settlement with state and local governments but that proposal has been denied by plaintiffs as insufficient. After this recent $260 million settlement avoided the bellwether case involving the two Ohio counties, parties are currently in the process of deciding among themselves how to organize such future cases; Judge Polster has ordered the parties to come to an agreement for how to structure the cases and present it to him by November 13. In a closed conference with the various parties’ attorneys on Wednesday, November 6, Judge Polster indicated that he would like to see “a focused trial against the big three distributors, a focused trial against the manufacturers and a focused trial against the pharmacies.”
Judge Issues Stay on Purdue Pharma LP Litigation Until April 2020
On November 6, 2019, a New York bankruptcy judge issued a preliminary injunction which put thousands of opioid lawsuits against Purdue Pharma LP on hold until April 8, 2020. After filing for Chapter 11 bankruptcy on September 15, Purdue requested an injunction that would create a 180-day stay for all of the lawsuits against it and the company’s owners, the Sackler family. Purdue has stated that it reached an agreement with the state of Arizona to exempt it from the injunction in order to allow the state to file a reply in order to get the U.S. Supreme Court to hear its case against the pharmaceutical company.
Litigation Summary and Potential Implications
Many of the plaintiffs in these cases are relying on a few key legal theories regarding the defendant drug manufacturers’ and distributors’ responsibility for the opioid epidemic:
- Negligence - they were careless about the selling, marketing and distributing opioids;
- Public nuisance - they endangered communities by oversupplying opioids; and
- Fraud or deceptive trade practices - they knew the risks and harms of opioids, but sold and delivered them anyway, and encouraged over-prescription.
Some point out the similarity between these opioid lawsuits and settlements and the big tobacco settlements in years past, including the scale and public health implications of the legal battles as well as the media attention surrounding them.
A potential positive that could come out of these settlements is that they may result in additional restrictions being put on manufacturers and distributors with regard to the marketing of opioids. Additionally, the economic costs associated with the opioid epidemic are undeniable, and many hope that any resulting settlement funds will be used to further overdose prevention and other public health programs aimed at addressing abuse and addiction to provide more assistance and support to those impacted directly by the opioid epidemic.