What Do the J&J and Purdue Pharma Outcomes Mean to the Pharma Industry?

Opioid abuse and addiction continue to ravage communities across the United States. Nora Freeman Engstrom of Stanford Law School reported in Suing the Opioid Companies, on August 30, 2018, that 2.4 million Americans had an opioid-use disorder with 300,000 lives lost, including 42,000 in 2016 alone. The financial burden on state governments in the form of increases in the cost for public health services, law enforcement, medical treatment, rehabilitation programs, housing, and related services has left state governments seeking the funds required to adequately deal with this crisis. Oklahoma was the first state to file suit against opioid manufacturers. The success of their legal strategy will have a significant impact on the opioid–and pharmaceutical–industry going forward.
What Oklahoma claimed
In the Judgement After Non-Jury Trial for the State of Oklahoma vs. Multiple Pharmaceutical Defendants in the District Court of Cleveland County during the spring/summer of 2019, the document shows that the state of Oklahoma claimed the defendants caused a public nuisance, for which the state was seeking relief in the form of “abatement of the nuisance.” None of the parties disputed the fact that Oklahoma was suffering a crisis related to the use of opioid drugs. They also agreed on several other indicators of the extent of this crisis, including the fact that in 2015, enough opioid pills were dispensed in Oklahoma “for every adult to have 110 pills.”
In his ruling, Judge Thad Balkman wrote that the challenged conduct was the “Defendants’ “misleading marketing and promotion of opioids. … Defendants engaged in a false, misleading, and deceptive marketing campaign designed to convince Oklahoma doctors, patients, and the public at large that opioids were safe and effective for the long-term treatment of chronic, non-malignant pain. The greater weight of the evidence shows that Defendants did, in fact, engage in such false and misleading marketing and the law is clear that such conduct qualifies as the kind of act or omission capable of sustaining liability under Oklahoma’s nuisance law.”
The action by the state of Oklahoma was successful where the suits of individuals and class action had not been because the individual and class action suits dealt with the specifics of an individual or group. Since the medications in question were FDA-approved and the individuals had chosen to take the medication, it was difficult to prevail. With class action suits, it was extremely difficult to assemble a group that had enough of the essential traits in common for the suit to succeed. By using the fact that the opioid addiction situation in Oklahoma was a crisis that had created a public nuisance, delving into the private lives of specific individuals was not required.
Ultimately, the court agreed that the defendants had caused a nuisance as defined to consist “in unlawfully doing an act, omitting to perform a duty, which act or omission annoys, injures or endangers the comfort, repose, health or safety of others; or, in any way renders other persons insecure in life, or in the use of property…” Judge Balkman ordered Johnson & Johnson to pay $572 million – an amount significantly less than sought, but one The New York Times reported would pay for a year’s worth of the services needed to combat the epidemic in Oklahoma. Purdue Pharma settled for $270 million in this same suit, one of the many in which it was named as a defendant.
Purdue Pharma, together with members of the Sackler family that own the company, is the name in a large opioid settlement relating to a lawsuit. Filed in December 2018 by Connecticut and a number of other states, it alleges that the company continued to push patients toward OxyContin^® even after the addiction rate became evident. Connecticut Attorney General William Tong told ABC News in April 2019, “Our investigation left no room for doubt—Purdue and the Sacklers ignored all human cost while pushing deadly opioids in blind pursuit of profit.”
In a September 9^th interview on NPR with North Carolina Attorney General Josh Stein, host Brian Mann – who covers opioid litigation for NPR – explained that “there’s a legal argument being made by some of these states [still seeking abatement] that the Sacklers effectively stripped billions of dollars out of Purdue Pharma over the years. In part, it’s alleged, because the family suspected their company would eventually face lawsuits like this. So, 17 states are already suing the Sacklers Directly to try to claw back some of these profits.” Stein agreed, stating “many states, like mine, will be filing lawsuits against the Sacklers in their individual capacity in creating this epidemic. I think almost more than any other family and company, they have to wear that burden.” On September 15, Purdue Pharma filed for bankruptcy in Chapter 11 as part of their $3 billion settlement of the 2018 suit. Whether or not future litigation directly against family members will succeed remains to be seen.
What it Means for Pharma
In the opinion of Stanford legal experts Michelle Mello and Nora Freeman Engstrom in an August paper, the outcome of the case was not a foregone conclusion. Nuisance claims are very hard to prove and by the time the suit went to court, “Oklahoma’s various causes of action got winnowed down to the singular claim that J&H had created a public nuisance by aggressively and deceptively marketing opioid products to Oklahoma’s doctors and patients.” As the first case of its kind, the Oklahoma case is a bellwether case – it leads the way to future litigation.
“The verdict,” say the authors, “suggests that this litigation has legs, and that judges and juries may be willing to pin blame not just on Purdue, the maker of OxyContin^®, but on others who played an arguably less central role in fueling this public health crisis.” This has to be a concern to pharma companies and others in the industry alike. The fact that FDA-approved opioid drugs, marketed and sold through widely accepted means, have been the target of successful litigation as a public nuisance is certainly a game changer. The potential culpability of companies in the pharma space has undergone a paradigm shift.
Mello and Engstrom summed it up well. “What is striking is how damming Judge Balkman’s factual conclusions about J&J’s conduct are, and how similar they are to the allegations made against other opioid manufacturers in other cases. All the things he objected to regarding J&J’s marketing practices are things that others, too, allegedly have done. Some of them are things that multiple companies banded together to do. Plaintiff’s attorneys should be feeling pretty confident about their chances of persuading other courts that those practices are problematic.”
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