Oklahoma Judge Holds Johnson & Johnson Responsible for Oklahoma Opioid Crisis

OpioidsAn Oklahoma judge has ruled that Johnson & Johnson’s role in creating an opioid crisis in Oklahoma created a public nuisance. The judge ordered the company to pay $572 million as its contribution to abate the nuisance.

The trial has been watched closely as an early indicator of how other lawsuits against opioid manufacturers might unfold. States and cities have applied old legal theories in new ways as they attempt to hold drug companies responsible for the cost of responding to the opioid addiction epidemic.

State and local governments hope to force drug companies to contribute to the cost of addiction treatment, a cost that is partially borne by taxpayers. More than 2,000 lawsuits by governmental entities seeking abatement of those costs have been filed against drug companies.

News sources report that Purdue Pharma has offered to settle all the cases for ten to twelve billion dollars. Purdue is accused of starting the opioid addiction crisis by encouraging doctors to prescribe oxycodone while downplaying its addictive properties. The Sachler family has reportedly offered to give up ownership of Purdue as part of the settlement, but has not offered to give up the vast personal wealth family members acquired from Purdue’s opioid sales.

Industry analysts had feared that the court might order J&J to pay as much as $2 billion in abatement costs. The judge may have considered a larger award to be disproportionate to the settlements made with other drug manufacturers. In his written decision, the judge explained that he was awarding abatement costs for one year because Oklahoma offered no strong evidence of the time it would take to resolve the crisis.

Another Loss for J&J

Oklahoma also sued Purdue, which settled for $270 million, and Teva Pharmaceuticals, which settled for $85 million. Johnson & Johnson has a long history of refusing to settle cases, a strategy that may have damaged its carefully honed reputation as a family-friendly manufacturer of healthcare products.

Juries have found Johnson & Johnson responsible for causing ovarian cancer in women who use J&J talcum powder. While some of those verdicts have been reversed on appeal — primarily because the lawsuits were filed in the wrong state — a bombshell investigation by Reuters revealed that J&J concealed information about the cancer-causing potential of its products from regulators and the public.

Juries have also concluded that the company’s DePuy Orthopaedics division marketed defective hip implants. Those lawsuits also relied on evidence that J&J was aware of product defects but took no action to warn consumers of the risks associated with the devices. Jury verdicts involving Risperdal and Xarelto have also damaged J&J’s “family friendly” reputation.

Johnson & Johnson vowed to appeal the Oklahoma verdict, a strategy that has met with some success in federal cases, where appellate judges often side with businesses rather than consumers. The company might have an uphill battle in Oklahoma’s appellate courts, as state judges are more likely than federal judges to be deferential to a state’s attorney general. The judge’s detailed findings and his citation to supporting facts in the record will also make the judgment difficult to overturn on appeal.

J&J’s Role in Opioid Crisis

The parties did not dispute that Oklahoma has suffered from the opioid addiction crisis. More than 2,100 Oklahomans died from opioid overdoses between 2011 and 2015. The court determined that the crisis began with the over-prescription of opioid painkillers.

Johnson & Johnson attempted to deflect blame to the companies that settled. Both Purdue, the manufacturer of OxyContin, and Teva Pharmaceuticals, which sold generic versions of oxycodone, sold more opioids in Oklahoma than J&J. Johnson & Johnson argued that its painkillers, including Duragesic, Tylox, and Nucynta, accounted for a small fraction of opioids prescribed in Oklahoma.

The role played by Purdue Pharma in creating the nation’s opioid crisis has been well documented. Despite its smaller market share, however, Oklahoma successfully characterized J&J as a drug “kingpin,” a term that criminal law applies to illicit drug dealers at the top of a distribution chain.

Oklahoma presented evidence that J&J developed the poppy strain that produced the key ingredient used in opioid medications and then became a leading supplier of oxycodone, hydrocodone, fentanyl, and additional opioids to other drug companies, including Purdue. In fact, J&J boasted of being the number one supplier of narcotics in the United States.

The evidence persuaded the court that J&J, together with other companies, “embarked on a major campaign in which they used branded and unbranded marketing to disseminate the messages that pain was being undertreated and that there was a low risk of abuse and a low danger of prescribing opioids to treat chronic, non-malignant pain and overstating the efficacy of opioids as a class of drug.”

In Oklahoma, J&J conveyed that message through sales representatives who provided “education” for doctors, and through promotional literature, paid speakers, seminars, and other means. Changing the way doctors prescribed opioids was the goal of those promotional efforts.

Johnson & Johnson also disseminated studies that it funded after they were published in research journals. The FTC later determined that those studies made claims about efficacy and low abuse potential that were false or misleading.

The marketing message mispresented other facts, including the claim that undertreated pain inevitably turns into chronic pain and that patients who begged for more opioids were not suffering from addiction but from undertreatment of their pain. Johnson & Johnson also labored to influence government agencies to avoid regulation that might have prevented the opioid crisis.

The Future of Opioid Litigation

The law surrounding abatement of a public nuisance is different in every state. The verdict against J&J may be heartening to states and municipalities that have sued drug companies for increasing the public cost of treating addiction, but other cases will not necessarily be decided against drug companies.

Still, the verdict may give drug companies an incentive to settle. A trial court decision is not precedential, but it may be seen as establishing a value for abatement claims. States and municipalities can compare the number of people affected by opioid addition in their location to Oklahoma and use the Oklahoma verdict as a benchmark in negotiating settlements.

Government sources have advised reporters that Purdue Pharma, Johnson & Johnson, Endo International and Allergan are actively negotiating settlements with attorneys representing state and local governments. Companies likely see a negotiated settlement as preferable to the bankruptcies that might follow a series of trial losses. A massive case involving 2,000 lawsuits is scheduled to begin in October if settlements are not reached.

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