December 13, 2019, 8:22

The thousands of lawsuits against opioid companies, explained

The thousands of lawsuits against opioid companies, explained

It is impossible to talk about the causes of America’s opioid epidemic without pointing to the manufacturers and distributors that marketed and proliferated dangerous opioid painkillers. Yet for much of the crisis, these multibillion-dollar opioid companies have avoided much in the way of serious accountability.

Until, perhaps, now.

On Monday, a court ruled that Johnson & Johnson helped fuel Oklahoma’s opioid epidemic, and ordered the company to pay more than $570 million to help address the crisis. It’s the first time a trial court has held a drugmaker accountable for the nation’s opioid crisis, which has contributed to the more than 700,000 drug overdose deaths in the US since 1999.

Earlier this year, Purdue Pharma, the maker of OxyContin, agreed to pay $270 million in a settlement with Oklahoma. And Teva, another pharmaceutical company, agreed to an $85 million settlement with the state.

Outside Oklahoma, there are now about 2,000 lawsuits, largely from various levels of government, consolidated with a federal judge in Cleveland in an attempt to reach a single landmark legal resolution to the opioid epidemic — one that may force opioid makers like Purdue and Johnson & Johnson, but also distributors like CVS and Walgreens, to shell out even more to help pay for the drug addiction and overdose crisis.

There are two major legal arguments behind these cases, one against opioid manufacturers and another mainly against opioid distributors:

1) Starting in the mid-1990s, opioid manufacturers unleashed a misleading marketing push underplaying the risks of opioid painkillers and exaggerating the drugs’ benefits. This, the lawsuits argue, adds up to false advertising with deadly consequences — by encouraging doctors to overprescribe the pills and getting patients to think the pills were safe and effective.

2) Meanwhile, opioid distributors supplied a ton of these pills, even when they should have known they were going to people who were misusing the drugs. This is backed by data that shows that in some counties and states, there were more prescribed bottles of painkillers than there were people — a sign that something was going very wrong. Federal and some state laws require distributors to keep an eye on the supply chain to ensure their products aren’t falling into the wrong hands. Letting these drugs proliferate, the lawsuits say, violates those laws.

Opioid manufacturers and distributors, of course, deny these allegations. While some lawsuits have been settled, and some executives have even been criminally convicted for their involvement in the epidemic in the past, opioid companies vigorously reject the argument that they have carelessly fueled the current drug crisis. And so far, what the companies have paid by and large amounts to peanuts compared with the profits they’ve taken in from the drugs.

More than 70,000 people died of drug overdoses in 2017, and around two-thirds of those deaths were linked to opioids. While these deaths are increasingly linked to illicit opioids like heroin and fentanyl, the rise in opioid misuse, addiction, and overdose originally began with the proliferation of prescription painkillers — which were overprescribed by doctors, allowing the drugs to flow not just to patients but to friends and family of patients, teens rummaging through parents’ medicine cabinets, and the black market. (For more on the causes of the crisis, read Vox’s explainer.)

According to the lawsuits, opioid companies enabled this epidemic. With the talks in Cleveland, the hope is the legal challenges will eventually lead to a big settlement — one that would quash the practices that helped lead to the deadliest drug overdose crisis in US history and help address its consequences by funding more addiction treatment.

The case against opioid makers: false advertising

The big argument against opioid makers: These companies knew or should have known that their products weren’t safe or effective, yet they advertised their drugs as safe and effective anyway.

One lawsuit representative of this line of argument is Ohio’s, which goes after Purdue Pharma, Endo, Teva Pharmaceutical Industries (and subsidiary Cephalon), Johnson & Johnson (and subsidiary Janssen Pharmaceuticals), and Allergan.

The lawsuit cited several examples of misleading marketing: An Endo-sponsored website,, in 2009 claimed that “[p]eople who take opioids as prescribed usually do not become addicted.” Janssen approved and distributed a patient education guide in 2009 that attempted to counter the “myth” that opioids are addictive, claiming that “[m]any studies show that opioids are rarely addictive when used properly for the management of chronic pain.” Purdue sponsored a publication from the American Pain Foundation, which was heavily funded by opioid companies, claiming that the risk of addiction is less than 1 percent among children prescribed opioids — suggesting pain is undertreated and opioids are necessary.

This is only a small sampling. In total, former Ohio Attorney General Mike DeWine claimed opioid companies spent “millions of dollars on promotional activities and materials that falsely deny or trivialize the risks of opioids while overstating the benefits of using them for chronic pain.” In doing this, he argued that opioid makers were “borrowing a page from Big Tobacco’s playbook.”

A 2015 analysis in the Annual Review of Public Health reached similar conclusions, finding opioid makers exaggerated the benefits and safety of their products, supported advocacy groups and “education” campaigns to encourage widespread use of opioids, and lobbied lawmakers to loosen access to the drugs.

The result: As opioid companies saw their profits increase, so too did drug overdose deaths and addiction treatment admissions.

It’s not just that opioids aren’t as safe as the drug companies claimed; the drugs may not even be as effective. There’s simply no good scientific evidence that opioid painkillers can effectively treat long-term chronic pain as patients grow tolerant of opioids’ effects — but there’s plenty of evidence that prolonged use can result in bad complications, including a higher risk of addiction, overdose, and death. In short, the risks outweigh the benefits for most chronic pain patients.

Some opioid makers had to pay earlier on in the crisis for what the government described as false advertising. In 2007, Purdue Pharma and three of its top executives paid more than $630 million in federal fines for misleading marketing, and three executives were criminally convicted, each sentenced to three years of probation and 400 hours of community service.

But local, state, and federal governments, as well as individuals and activist groups, argue that the faulty marketing continued even after that, leading more people to file legal action against opioid makers. Some states, such as Oklahoma and Kentucky, have already gotten a payout. The thousands of cases consolidated by a federal judge in Cleveland could lead to even more.

I reached out to the major companies named in the lawsuits. Only Purdue gave a comment on the record: “We share the attorney general’s concerns about the opioid crisis and we are committed to working collaboratively to find solutions. OxyContin accounts for less than 2% of the opioid analgesic prescription market nationally, but we are an industry leader in the development of abuse-deterrent technology, advocating for the use of prescription drug monitoring programs and supporting access to Naloxone — all important components for combating the opioid crisis.”

The case against opioid distributors: allowing diversion

Beyond the false advertising charges, there’s a separate legal argument, dubbed the “diversion theory” by some proponents, for companies that distribute, as opposed to manufacture, opioids.

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: As the opioid epidemic spiraled out of control, and as some counties and states had more prescriptions than people, it should have become perfectly clear that something was going wrong — yet, the claim goes, distributors continued to let the drugs proliferate.

Michael Canty, an attorney advising states and other jurisdictions on opioid-related legal challenges, drew a comparison between opioid distributors and credit card companies.

“[Credit card companies say], ‘Someone tried to make a very large purchase on your account in another state and we flagged it as suspicious and stopped it from going through.’ That’s what distributors should be doing,” Canty previously told me. “For example, there’s a small town with 500 residents, and the local pharmacies order a million pills from the distributors. That should set off an alarm bell from a compliance standpoint or a quality control standpoint, where the distributors say, ‘Wait a minute, what’s going on here? We need to investigate this order. And until it passes muster, we won’t ship.’”

The Cherokee Nation’s lawsuit is representative of this line of argument, leveled against big names like the McKesson Corporation, Cardinal Health, AmerisourceBergen, CVS, Walgreens, and Walmart. The lawsuit has some fairly alarming numbers behind its claim: 845 million milligrams of opioids were distributed in the 14 counties that make up the Cherokee Nation — which, if you assume an average pill size of 20 milligrams, amounts to 360 pills for each person using prescription opioids in the Cherokee Nation.

This is part of a national problem. The CDC, for example, put out 2012 data that found there were more painkiller prescriptions than people in several states.

West Virginia’s case is particularly striking. It is the state hardest hit by the epidemic, suffering the highest rate of overdose deaths in 2016. A previous investigation by the Charleston Gazette-Mail in West Virginia found that from 2007 to 2012, drug firms poured a total of 780 million painkillers into the state — which has a total population of about 1.8 million. Some of the numbers were even more absurd at the local level: The small town of Kermit has a population of 392, but a single pharmacy there received 9 million hydrocodone pills over two years from out-of-state drug companies.

“When you have 140 prescriptions being written for every 100 people, you know that people have failed to meet their obligations,” Serena Hallowell, another attorney involved in the legal challenges, previously told me. “And they’re not just ethical obligations, which I would say they have too. They’re obligations under state and federal law and their own industry guidelines as well.”

As with opioid makers, distributors have already paid some fines and settlements for the opioid crisis, sometimes multiple times over — including McKesson, CVS, Walgreens, and Cardinal Health. Now legal challenges are wrapped up in the consolidation of lawsuits in Cleveland, although some individual lawsuits are still going on across the country as well.

Similar challenges could, in theory, be tried against opioid manufacturers as well. The Drug Enforcement Administration (DEA), for one, previously pursued one of the nation’s largest opioid makers, Mallinckrodt Pharmaceuticals, for the proliferation of its pills in Florida since 1999. But as the Washington Post found, the investigations went nowhere. In the end, the company agreed to pay, without admitting wrongdoing, just $35 million to settle the case with the federal government — far from the billions in dollars the DEA reportedly hoped for, and a tiny fraction of the $3.4 billion in revenue the company reported in fiscal year 2016.

I contacted the major opioid distributors named in the lawsuits. AmerisourceBergen, Cardinal Health, and CVS said they are committed to stopping the misuse of their products, and that they will work closely with federal regulators to do so. Cardinal Health went further, arguing that it “is confident that the facts and the law are on our side, and we intend to vigorously defend ourselves against the plaintiff’s mischaracterization of those facts and misunderstanding of the law.”

A big goal of the lawsuits: a tobacco-style settlement agreement

Despite the fines and settlements, policymakers and advocates aren’t satisfied with what opioid companies have paid so far. Hundreds of millions of dollars is obviously a lot of money for most people. But for companies that make billions of dollars a year, it’s not much.

Take Purdue Pharma. Thanks to OxyContin, the company had reaped more than $31 billion in revenue from the mid-1990s to 2016. A $630 million fine, like the one the company paid in 2007, added up to just 2 percent of that — not much of a deterrent.

The crisis also demands far more than a few hundred million dollars. A 2016 study, for instance, estimated the total economic burden of prescription opioid overdose, misuse, and addiction at $78.5 billion in 2013, about a third of which is due to higher health care and addiction treatment costs. A 2017 study from the White House Council of Economic Advisers linked a year of the opioid crisis to $500 billion in economic losses.

Many states and cities just can’t afford to pay for these new expenses, and may need a big legal settlement or legal damages to do so, especially as the federal government lags in its response to the opioid crisis.

The big hope, particularly with the cases consolidated in Cleveland, is to see an outcome similar to the settlement reached with tobacco companies in the ’90s.

In 1998, big tobacco companies agreed to the Master Settlement Agreement with 46 states. This massive agreement forced tobacco companies to pay tens of billions in upfront and then annual payments, and it put major restrictions on the sale and marketing of tobacco products.

Similarly, a big settlement with drug companies could place restrictions on marketing for opioids. Money from the lawsuits could also help pay for addiction treatment. The latter would help fill a major gap in care: According to a 2016 report from the surgeon general, only 10 percent of people with a drug use disorder get specialty treatment — in large part due to a lack of access and options in their area.

There are parallels between tobacco and opioid companies: Both knew they were selling a dangerous product, yet they misled the public about it — leading people to get addicted and die. (And now that opioid companies are facing pressure at home, they are borrowing a page from big tobacco companies and taking their product internationally with the exact same kind of messaging they used before, with claims that opioids are good for chronic pain and not very addictive.)

But there are some major differences that could make it much harder to get a tobacco-style settlement for opioids. The big one is that, unlike cigarettes at the time of the Master Settlement Agreement, opioids are already regulated by the Food and Drug Administration (FDA). This could let opioid companies punt responsibility to the FDA, since the agency approved these drugs for medical use. Jodi Avergun, a former chief of staff at the DEA and now a defense lawyer, told Reuters that this is a “fundamental weakness” of the current lawsuits.

There are other issues, like the involvement of the rest of the health care system in the opioid crisis, from medical boards to doctors to patients themselves. That all of this involved so many different actors could insulate opioid companies from carrying too much of the legal consequences. That’s especially true since some of these other actors have copped to serious negligence; the West Virginia Board of Pharmacy, for one, admitted that it didn’t enforce a law for reporting suspicious orders of narcotics for years.

“With tobacco, it really is an interaction between an industry and the consumer,” Keith Humphreys, a drug policy expert at Stanford University, previously told me. “In this case, there was supposed to be this intervening body that also failed. That doesn’t mean the pharmaceutical companies should get off, but … plenty of other people enabled it.”

So far, the shared culpability hasn’t stopped different levels of government — and some courts — from pushing opioid makers and distributors to pay up. The question now is if these companies will be forced to pay out even more.


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