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Opioid Epidemic Lawsuits: Orange County and Other Local Governments vs. Big Pharma

Opioid Epidemic Lawsuits: Orange County and Other Local Governments vs. Big Pharma

For more information, please contact The Ahearne Law Firm, PLLC at (845) 986-2777 for an initial consultation and case evaluation.

As reported in our blog post, Orange County Sues Drug Makers and Doctors Over Opioid Addiction CrisisOrange County announced in May that it started a lawsuit against Purdue Pharma L.P.; Purdue Pharma Inc.; The Purdue Frederick Company, Inc.; Teva Pharmaceuticals USA, Inc.; Cephalon, Inc.; Johnson & Johnson; Janssen Pharmaceuticals, Inc.; Ortho-McNeil-Janssen Pharmaceuticals Inc. n/k/a Janssen Pharmaceuticals Inc.; Janssen Pharmaceutica, Inc. n/k/a Janssen Pharmaceuticals; Endo Health Solutions Inc.; and Endo Pharmaceuticals, Inc., accusing the pharmaceutical manufacturers of engaging in aggressive and fraudulent marketing that downplayed the risks of prescription opioid painkillers, leading to a drug epidemic. The lawsuit also names physicians Russell Portenoy, Perry Fine, Scott Fishman and Lynn Webster, who allegedly were instrumental in promoting opioids for sale and distribution nationally and in Orange County.

Further, as reported in our recent blog post, Plaintiffs Petition Judicial Panel on Multidistrict Litigation for Consolidated Docket in National Opioid Litigation, Plaintiffs in a majority of opioid lawsuits filed nationwide have petitioned a federal judicial panel to have the cases consolidated before a single federal judge in either Ohio or Illinois. In a motion filed on September 25th with the Judicial Panel on Multidistrict Litigation (JPML), the plaintiffs request transfer and coordination of all pending federal lawsuits filed by governmental entities against the distributors and manufacturers of prescription opioid painkillers.

As a weekend bonus to our readers, the following is a courtesy reprint of sections of note from the North Carolina Bar Association’s blog on local government lawsuits against pharmaceutical manufacturers in connection with the ongoing opioid crisis:

The opioid epidemic is an American tragedy.  It is difficult to convey the breadth of the epidemic with a single statistic, but let this sink in:  For every person killed by gun violence, three people will die from an opioid overdose.

As the epidemic worsens, local governments are scrambling for solutions.  They are also scrambling to keep up with the costs—the public health, law enforcement, public employment, and other costs that the opioid crisis has left on their doorstep.  With insufficient financial assistance from Congress and state legislatures to cover these costs, local governments are turning to the courts.

Across the nation, cities and counties are suing opioid drugmakers and distributors.  These lawsuits seek to hold drug companies accountable—at least in part—for the opioid epidemic.

As the frontline of defense in the opioid crisis, cities and counties face an array of costs that are unique to local government.  Broadly categorized, these costs include:

  • public health costs, such as those associated with the exponential increase in emergency room admissions and emergency overdose treatment (e.g., local first responders, emergency response services, equipment, and vehicles, etc.), drug treatment centers and community health clinics, and the costs related to caring for infants born addicted to opioids
  • law enforcement costs, which stem from the dramatic increase in criminal possession charges for opioid drugs
  • public employment costs, such as the hiring of additional public health and law enforcement personnel, as well as increased costs of comprehensive health care protection (including prescription drug benefits) for local government employees and retirees, which are passed on to—and paid by—local governments
  • other costs, such as the costs of economic instability on the local tax base and the corresponding effect on local government budgets

These costs are unsustainable for local governments.  As a means of offsetting these costs, local governments have been seeking to hold drugmakers and distributors accountable.

Much like the tobacco litigation of the 1980s, the opioid crisis has government officials knocking down the courthouse doors.  In 2017 alone, the pharmaceutical industry faced an onslaught of more than 100 lawsuits.

The plaintiffs in these lawsuits cross the government spectrum.  They include:

  • States, including Alaska, Missouri, New Hampshire, New Jersey, Ohio, Oklahoma, South Carolina and West Virginia
  • Cities, including large cities like Chicago and Birmingham, mid-sized cities like the City of Everett (Washington), and small municipalities, such as a coalition of six small towns in West Virginia
  • Counties, including ten West Virginia counties that have filed suit, and a group of 50 Wisconsin counties that are expected to file soon
  • Native American tribes, most notably the Cherokee Nation

In a major development last month, a Judicial Panel on Multidistrict Litigation consolidated 66 federal lawsuits spanning 11 federal districts and 9 states into a must-watch MDL:  the ‘National Prescription Opiate Litigation.’

So what, exactly, are these governmental plaintiffs accusing Big Pharma of doing?  To briefly summarize, the lawsuits allege that the drug manufacturers and distributors created and accelerated the opioid crisis through acts that were reckless.  The lawsuits allege the following acts:

  • Trivializing the addictive nature of opioids. The lawsuits allege that drug companies spent billions of dollars on marketing campaigns that downplayed the risks of opioids by, among other things, promulgating a theory of ‘pseudoaddiction.’ The lawsuits further allege that the drug companies instructed doctors and pharmacists to ignore ordinary signs of addiction, and instead, suggested that the cure for ‘pseudoaddiction’ was more opioids.
  • Falsely claiming the effectiveness of opioids. South Carolina, for example, alleges that a drug company touted the benefits of long-term treatment with opioids without sufficient support and without appropriately disclosing the risks of addiction.
  • Profiting off the growing opioid crisis. The lawsuits allege that drug companies took advantage of the growing public concerns by promoting ‘reformulated’ pills claimed to reduce the risk of abuse, despite knowing there was no impact on addictiveness.
  • Concealing data on the illegal trafficking of opioids. The City of Everett’s lawsuit alleges that a drug company collected, tracked, and monitored extensive data evidencing illegal trafficking, but failed to alert authorities or slow the flow of its drugs into the black market.
  • Failing to report suspicious orders for opioids. The City of Everett’s complaint cited emails in which a drug company employee raised concerns about the company’s continuous supply of opioids to a particular medical clinic that was alleged to have been overrun with ‘gang members’ and was essentially ‘an organized drug ring.’  Similarly, a single pharmacy in Kermit, West Virginia—a town with just 393 people—reportedly ordered nine million hydrocodone pills in just two years. That is 22,900 pills per person.

Armed with these allegations, local governments have asserted a number of legal theories against the drug companies.  The most common claims are:

  • negligence claims, which assert that drug companies had a duty to safely manufacture, sell, and distribute their hazardous product but failed to do so
  • public nuisance claims, which assert that drug companies unlawfully created a public health crisis that damaged local communities
  • unjust enrichment claims, which assert that drug companies were unfairly enriched by the opioid epidemic
  • claims for violations of consumer protection statutes, which assert that drug companies violated various statutory protections—for example, statutes that prohibit unfair and deceptive trade practices
  • claims for violations of consent orders, which assert that drug companies disregarded prior consent orders that were negotiated with government entities for the purpose of curtailing the opioid epidemic

In most instances, these lawsuits seek statutory treble damages, punitive damages, and attorneys’ fees.

The opioid litigation is still in its infancy, but the authors believe that the potential exposure for the drug companies—even the defense costs alone—could be significant.

There are two reasons the authors share this view:

First, at least some of these government lawsuits have the potential to proceed to discovery, which, of course, substantially increases the chances of settlement.  To date, the lawsuits described above have either survived motions to dismiss or (in state court, at least) are proceeding to discovery.

In the City of Chicago’s lawsuit, for example, the federal district court ‘reject[ed] defendants’ argument that their alleged misrepresentations cannot be the basis for any fraud-based claim,’ and it denied the defendants’ Rule 12 motions on key claims. The case is now in discovery, and the city has filed a motion to compel one of the drug company defendants to produce documents from its employees who were responsible for opioid marketing.

Similarly, in the City of Everett’s lawsuit, the federal district court largely denied the defendants’ Rule 12 motion, and it granted the City an opportunity to amend the claims that were subject to dismissal.  As these rulings illustrate, at least some of these lawsuits have the potential to proceed to discovery.

Second, drugmakers and distributors have already paid large settlements related to their alleged role in the opioid epidemic.  In the past year alone, these settlements have included the following:

  • In January 2017, the drug distributor McKesson Corporation agreed to pay a $150 million civil penalty for failing to report allegedly suspicious orders.
  • In January 2017, distributor Cardinal Health announced it would pay $20 million to West Virginia to settle allegations that it failed to report suspicious orders. Just one month prior, Cardinal Health agreed to pay $44 million to resolve a federal investigation into its distribution of opioids in Maryland, Florida, and New York.
  • In January 2017, Costco Wholesale agreed to pay a $11.75 million to settle allegations that its pharmacies had been improperly filling opioid prescriptions in Washington and Southern California.
  • In April 2017, oxycodone manufacturer Mallinckrodt agreed to pay $35 million to resolve an investigation into its monitoring and reporting of suspicious orders.

These large settlements may be further motivation for local government plaintiffs to join the opioid litigation in the coming months.”

#OrangeCountyNY #opioid #pharma #addiction #lawsuit #litigation

If you or a family member have suffered injury from use of a prescription or over-the-counter drug or pharmaceutical, you and/or your family member may be entitled to money damages.

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