Last Monday we saw a milestone judgment made against corporate giant Johnson & Johnson in Norman, Oklahoma. As Cleveland County District Judge Thad Balkman ruled the multinational drugmaker and its pharmaceutical division Janssen were liable for $572 million in damages. The worldwide conglomerate was found guilty of playing a significant role in the widespread devastation wreaked by Oklahoma’s opioid epidemic. Although the final amount awarded to plaintiff and Attorney General Mike Hunter was only a small fraction of the initial $17 billion suit, Judge Balkman’s findings may likely trigger a tidal wave of action. That should finally begin to address the sweeping destruction caused by prescription opioids abuse across our nation.
J&J, which marketed the opioid painkillers Duragesic and Nucynta, denied any wrongdoing. Lawyers for the company disputed the legal basis Oklahoma used to sue J&J, relying on a “public nuisance” claim. Side note: Duragesic is a time release pain relief patch consisting of the deadly synthetic opioid Fentanyl. The case originally had included Oxycontin maker Purdue Pharma and Israel’s Teva Pharmaceutical Industries as well. Those two entities eventually would agree to settle their claims out of court. As Purdue agreed to pay $270 million and Teva cut a separate deal for $85 million.
The staggering number of casualties counted from this crisis are positively stunning. Over half a million Americans dead in the past 20 years. Billions of dollars forever taken away from our cities, counties and states. Also an astronomical price paid in associated taxes by our citizens. Grievous families and ravaged communities, both left shattered. From an insidious plague that simply has been tearing the seams of our society apart.
More significantly, the ruling is namely a first in which big pharma was deemed to be legally responsible for it’s part in this national scourge. Most notably for using overly aggressive, highly deceptive sales and marketing practices. Pain pills were often dispensed freely with very little if any restriction. That essentially opened the floodgates which allowed such extremely dangerous drugs to spill out around the country.
Consequently, a literal mob of plaintiffs will soon be lined up and looking for justice in Ohio this October. Nearly 2,000 lawsuits were joined together in a multidistrict litigation, the majority of them from local and state governments, along with numerous Native American tribes. They included lawsuits alleging consumer fraud, racketeering and conspiracy. A grand total of 12 large scale drug enterprises are cited in the complaints. While Endo International and Allergan have agreed to pay $15 million to avoid going to trial. As opening arguments are scheduled for Monday, October 21st in Cleveland under Northern Ohio’s U.S. District Judge Dan Polster.
Among the defendants named are those three pharmaceutical companies previously mentioned here. As well as McKesson, Cardinal Health and AmerisourceBergen. Plus prescription titans Walmart, Walgreens and CVS. All mega merchants involved on the distribution end must answer to charges concerning their lawful responsibilities of diversion. Under federal and some state laws, opioid distributors have a legal obligation to stop controlled substances from going to illicit purposes and misuse. The diversion theory argues that these distributors clearly did not do that.
Then directly following that news, a major twist. One day later Purdue quickly extended offers to resolve each corresponding claim. The added sum reportedly in a cumulative range of $10 to $12 billion. A possible turning point in this tragic tale comes with Purdue and its ownership currently facing a torrent of legal trouble. At the Cleveland meeting, the company presented a plan for Purdue to declare Chapter 11 bankruptcy and then restructure into a for-profit “public benefit trust,” according to the summary term sheet. A special condition within that proposal has their much-maligned owners, the Sackler family actually surrendering the controlling stake in their business. But a shocking turn of events came Friday. Ohio Attorney General Dave Yost formally petitioned an appeals court for the trial date to be suspended. A main reason being the states’ and counties’ continuing conflict regarding lawful jurisdiction.
Almost every single state in the country has filed suit. In addition to Washington D.C. and Puerto Rico. Purdue’s legal team informed the assembled plaintiffs’ attorneys that if they did not take the potential settlement, the company would go ahead and declare bankruptcy. This move potentially gives them a bit of leverage. In theory the company’s value could be considerably less as a result of that process.
Beyond that several big pharma giants reportedly have just indicated the desire to reach their own settlements. So far specific terms of these proposals are not clear. The results are now pending. Still coming to a resolution within our slow moving judicial system might possibly take years. An additional concern evidently needs to be addressed. Finalizing any settlement will not be simple, partly because state and local officials are having difficulty determining who would control any monies generated by these lawsuits and how they would be spent.
Many questions remain about exactly how to proceed. If nothing else things are off to a shaky start. However a number of similar cases are expected to go forward in different locations throughout the U.S. beginning next year. Let’s hope we are ultimately on a collective road to recovery.